Mindless Bureaucratic Wealth Redistribution

There's an article in yesterday morning's online Tennessean which reports that the TN Technology Center in Nashville will no longer offer student loans. The default rate was at 16% and was in danger of jumping to 23%.

After reading the following, I'm not sure why the Nashville Tech Center offered student loans as long as they did:

Under federal guidelines, schools that offer student loans cannot refuse a loan to any student who applies for one, nor can they run background checks to see if someone is going to be a bad credit risk. Yet the institution is held responsible for students who don’t make their payments.

The educational institution can't refuse a loan...can't run background checks on applicants...but is responsible for students who don't make their payments. I'm sure all of these "guidelines" were written  with good intentions to help students, but shouldn't we at least be sensible about it and allow background checks and loan refusals. Without those safeguards we might as well just publicly say: "Come to college, get free money." Geez, I'm an English Teacher, not an economist, but I think I can see where those common  sense safeguards would be a good idea. With them you're still helping students--just not those that will more than likely default.

Who writes these federal regulations and "guidelines" (I just love that word), and how did congress come up with such nonsense anyway? Can you imagine, if financial institutions had to operate that way, what a disaster it would be? Oh. Wait. They did operate that way through the mid '90s right on up to the current recession. And didn't they get in trouble with soaring default rates on mortgages, etc.? I'm thinking here of Fannie Mae and Freddie Mac and some of the large banks that got in trouble. I'm not sure about McDonalds' Big Mac. Did they get a bailout too?

It's just this kind of BS that's contributed to the fat, bloated, gargantuan government bureaucracy we have today. Congressional staffs spend weeks planning this stuff, more weeks writing it, then our representatives debate it (many times without reading all of it) and modify it and add more BS and a hefty amount of pork to it before they finally pass it on to the president who gets his picture made while signing something he probably hasn't read either.

In a business situation, one asks the basic question: can I pay for this? Is that too hard for our representatives to understand? They look down their morally superior noses and say: "You're a greedy, heartless, corporate shill who is blocking progress. It's not about the money, it's about building a better society and helping the less fortunate."

I say BS. High moral intentions don't pay the bills. Moralizing rhetoric doesn't pay the bills. We pay the bills. Therefore, we have to bring government back down to a much more manageable size. Instead of using a scalpel and removing a few wasted and unnecessary billion, let's use the Paul Ryan chain saw with those trillion dollar cutting teeth and rip this thing up.

Maybe I'm becoming a libertarian in my dotage, but I'm thinking that there are only a few things the federal government needs to be doing: provide a strong defense, operate the FBI, pave the interstates, administer a trimmed down social security program, and perhaps do some minimal regulation of water, food, and medicine. But as I said earlier, I'm suspicious of any kind of regulation. I like the planet I live on as much as any freaking activist in the Earth Liberation Front or even Saint Gore, but look what the EPA has done, for example, and continues to do to prevent us from utilizing our own fossil fuel resources.

It truly makes my blood pressure rise when I think about the kind of country my grandkids are going to inherit. If those Federal agencies keep meddling and if those bland officious bureaucrats keep writing Federal Regs and Guidelines (!), the US will soon turn into California.

Of course we could always appoint a federal commission to study the problem and made recommendations.