BSW, AfD, Kellogg, Appeasement, and NATO

November, 2024

Berlin — What is the BSW (Bündnis Sahra Wagenknecht) and why is it important?  It is a splinter but growing group on the German left that could be a major force in the upcoming German elections.  The U.S. Senate should be asking questions about it as the Senate begins confirmation hearings on American foreign policy nominations.  

Despite the blessing given to it by influential German sociologist Wolfgang Streeck, BSW is a dangerous advocate of appeasing Russia.  Along with the far-right AfD (Alternativ für Deutschand) party, it could turn German public opinion against supporting Ukraine in Ukraine's war of survival against Russia.  

Additionally ominous is the selection in the U.S. of General Keith Kellogg as envoy to Ukraine and Russia, to try to end the war.  His approach would appease Russia by giving it land in Ukraine's east and keep Ukraine out of NATO.  German acquiescence to the Kellogg plan would seal Ukraine's fate and embolden Russia to invade other countries.  

The war needs to end on terms other than inviting a proof of Halford John Mackinder's heartland geopolitical theory, that whoever controls Russia and eastern Europe controls the world island, and whoever controls the world island controls the world.  Alfred Thayer Mahan's theory of sea power suggests a more acceptable way to end the war, to make Ukraine's suffering and sacrifice less in vain.  If in a peace settlement Russia acquires hegemony over certain lands in the Donbas, Ukraine should be rewarded with the strategic Crimean port of Sevastopol for its remarkable naval successes in the Black Sea.  As to NATO, Ukraine's control of Sevastopol would be guaranteed by NATO members bordering the Black Sea, which would be backed up as necessary by other NATO members, whose interests include freedom of those seas.  

To bring Russia to the peace table, sea power projected to defend Ukrainian sovereignty over Crimean territories would be better leverage than Kellogg's dubious plan to threaten long range attacks into sovereign Russia, an escalation of the war.  

BSW should signal opposition to the Kellogg plan immediately, and announce a search for alternatives that do not appease Russia, which already has its eyes on restoring the Soviet empire, including Moldova, Rumania, Slovakia, Poland, and the Baltic states  The matter should be a top Senate concern in confirmation hearings for Marco Rubio as Secretary of State.   

 

 

Defending the Constitution While Helping Student Loan Borrowers

November, 2024

Washington — Yet another court has struck a blow on behalf of student loan borrower victims of shoddy loan servicing.  In the case Jeffrey Good v. MOHELA (2024), the U.S. Tenth Circuit Court of Appeals determined that MOHELA did not have sovereign immunity under the Constitution's Eleventh Amendment and would have to comply with the federal Fair Credit Reporting Act. 

I was doubly pleased that in so doing, the court cited Oberg v. PHEAA et al. (2015) seventeen times as precedent.  It is a testament to the great work of my attorneys Bert Rein, Michael Sturm, Christopher Mills, Stephen Obermeier, and others.  

The Tenth Circuit ruling came the same month as previously sealed documents in Oberg v. Nelnet et al. (2024) were unsealed per a decision of the U.S. Fourth Circuit that the public had a right to see them under the Constitution's First Amendment.  Much credit goes to attorney Nandan Joshi at Public Citizen, who argued the case on behalf of New York based filmmaker Michael Camoin.  Although the case is listed under my name, I had nothing to do with the effort and never met counsel Joshi until this past week, when I congratulated him both on this victory and on the MOHELA case, which he also argued. 

When I filed complaints against several student loan lenders under the False Claims Act in 2007, drafting them together with counsel Jason Zuckerman, I never realized that our case would lead to two significant constitutional law developments.  In fact, I thought we might face insurmountable obstacles within weeks.  But despite a few setbacks here and there along the way, the case is still thriving after almost two decades. 

A past outcome in the case could even be the basis for a third successful shot at yet another constitutional issue: my First Amendment rights to make charitable contributions without having to assess the hypothetical uses of the funds that might adversely affect certain undefined interests.  How would a donor know those interests, or know how the charity might use the funds?  It is a suppression of free speech to put such conditions on donors.  I'd rather not be back in court over the matter, as my interests are hardly adverse to what I might guess are other parties' interests — relatively good servicing should be acknowledged and all servicing improved — but the constitutional issue is out there, so the case may be back in court once again.  

May Good v. MOHELA lead to better student loan servicing, and may the Constitution continue to be defended.  

 

 

Worthless Ideological Positioning

November, 2024

Washington — Ich bin Politikwissenshaftler.  For decades, I've been following political theory: right, left, progressive, conservative, socialist, libertarian, authoritarian, and everything in between.  I've also been following voting behavior studies for decades, and participated in more than my share of campaigns.  

Conclusion:  although pundits, reporters, and consultants are preoccupied with ideologies, the great majority of voters are not, and if not oblivious to political theory, many are so confused by it that they often vote contrary to what they think is their placement on an ideological spectrum.  

The problem here is not so much with the voters, but with the rickety frameworks of the ideologies themselves, which can collapse in a heap when confronted by realities facing voters.  If a voter is concerned, for example, about the very real problem of too much of the federal budget going to interest on the debt, that could appear anywhere on the ideological spectrum.  Is it a transfer of wealth to the lender class, and thus a concern of the left, or a plea for a balanced budget, often a talking point of the right? 

So when political consultants and the pundit class advise "move left" or "move right" to win elections, what does that mean?  It means they make money off their superficial erudition, but not much else. 

What does this portend if Democrats want to compete for votes in rural America, which they desperately need to win elections up and down the ticket?  It means they should ask rural voters what problems they want candidates to address, and act accordingly, ideological perceptions be damned. 

Voters in rural areas suffer disproportionately from lack of good medical care and alarming numbers of deaths of despair.  A solution?  Rejuvenating the Cooperative Extension Service to use its agent system to provide nutrition help and disease prevention would likely be a much-welcomed Democratic initiative, if only it were offered.  

Why hasn't it been?  It does not fit neatly into ideological fairy-castles.  Only the voters care.

The Democratic Party is doing much soul-searching after this month's election losses.  May it find its soul in solutions to real problems, not in worthless exercises in ideological positioning.  

"Analysis" in the NYT

November, 2024

Washington —  The following analysis of why Kamala Harris lost battleground states Pennsylvania and Wisconsin appeared today in the New York Times.  Typical of such second-guessing, it fails to attribute the losses to the obvious:  Democrats' over-reliance of turning out votes in urban Democratic strongholds rather than competing for votes in non-metro areas.  See previous blog "A Call to Revamp the Democratic Party."

A better analysis would be to explore why Democrats don't have the acumen or fortitude to compete in culturally rural areas where cutting their losses would result in overall election victories.  You won't find it here, which should give us all pause:  

Swamped in the Battlegrounds

In Pennsylvania, the biggest electoral prize on the battleground map, Mr. Trump’s victory received an outsize boost from an unlikely place — the five counties with the highest percentage of registered Democrats: Allegheny, Delaware, Lackawanna, Montgomery and Philadelphia.

Ms. Harris won these counties, but not by the margins needed to overcome Republican-heavy areas of the state. Total turnout was down from 2020 in all five Democratic strongholds, which could partly explain how Ms. Harris received 78,000 fewer votes than Mr. Biden. Mr. Trump added 24,000 votes to his total in these same counties.

This gap left Ms. Harris with little chance of winning Pennsylvania. Mr. Trump’s victory margin in the state, as of Sunday, was about 145,000 votes.

In Wisconsin, the voter participation rate overall was among the highest of any state. But voters in Democratic-heavy counties simply could not keep pace with gains from their Republican counterparts.

Why could Democrats not "keep pace"?  They did not have a rural strategy to give them a chance. 

A Call to Revamp the Democratic Party

November, 2024

Washington — The first caller I talked to on November 6th, the morning after the election, asked an unexpected question:  "Do you feel vindicated now?"  

No, I replied, my feelings were simply deep apprehension about the future.  The caller persisted:  Democrats obviously lost because they performed so badly in rural areas, as I had been predicting and warning about for several years.  I was among the few who predicted Hillary Clinton would lose in 2016 because of Democrats' neglect of rural America, and I felt largely the same about Kamala Harris's campaign, although she made a few commendable attempts to make inroads.   

It's not that Democrats don't potentially have policies and messages that would resonate in non-metro areas that are dominated by the culturally rural.  But how often do we see Democrats going purposefully into these areas to seek out voters' concerns, with empathy and answers for rural America's very real woes?  The Democratic National Committee would be aghast at such a strategy.  Instead, it pushes axe-grinding identity politics, a sure and proven loser.  

Are there, however, plausible answers for rural America's failing health care systems, inadequate infrastructures, loss of family farms to corporate monopolies, market and supply-chain failures, top-soil loss, poor nutrition, youth out-migration, and disproportionate deaths of despair?  Yes, there are answers! Many of these issues are addressed in Congress's periodic Farm Bill, which is up for reauthorization this very year.  But when was the last time you heard Democrats making it a priority, let alone even mentioning it as a strategy to win rural votes?*  

Instead, too many Democrats view rural denizens —especially those of the working class — as cardboard cutouts, clinging to their guns and religion, to the exclusion of seeing their actual problems and their humanity.  To these Democrats, it has never occurred to them that guns and religion are symbols of rural resistance to their dehumanization, and that the most destructive aspects of these symbols would lose their power were Democrats to address rural issues with real solutions.  

I don't care about vindication, but please add my voice to the many who are calling for a complete revamping of the Democratic Party, to address the number one cause (by far) of its election defeats: a failure to compete effectively in rural America.  No, Democrats are not necessarily going to win in non-metro areas with a sensible rural strategy, but cutting the current huge losses is the obvious answer to winning more elections overall.   

   

________________________

*Also, when was the last time you heard Democrats rightfully point our that many of rural America's problems were created by Republican policies under Nixon (get-big-or-get-out), Reagan (huge numbers of farm bankruptcies), and Trump (market-killing tariffs)?  And when was the last time you heard Democrats say that an aggressive rural strategy is particularly important because it is linked to overcoming the party's electoral college disadvantage?  Ever?  

 

Climate Urgency

November, 2024

Lincoln — On the eve of our national elections, one issue outweighs all others. Margaret Renkl describes it well in her guest essay today in the New York Times.  Her analysis is nothing short of alarming.  

Despite the urgency needed to deal with the climate crisis, our nation's efforts are lagging badly, as described in two other reports, excerpted here below, describing the lack of progress in administering the climate provisions of both the Infrastructure Act and the Inflation Reduction Act:

President Joe Biden approved the largest-ever investment to protect the nation against hurricanes, droughts, wildfires and other disasters being intensified by climate change.

Nearly three years later, the majority of that $33.6 billion remains unspent, POLITICO found in an analysis of federal data — a lag that imperils Biden’s hopes of building the nation’s resilience to the maladies of a warming world.

The money, provided by the president’s bipartisan 2021 infrastructure law, is meant for projects to harden the electrical grid, prevent wildfires, flood-proof communities and stabilize dwindling water supplies, among other efforts. The needs for this kind of spending are likely to be bottomless given the galloping pace of climate change, as seen by the devastation that Hurricanes Helene and Milton inflicted in just the past month.

But the progress of launching this work has been slow: Through the end of September, 80 federal programs that received $24.4 billion of the climate resilience money had awarded just $10.3 billion of it, according to POLITICO’s review of spending data provided by agencies.  

Tens of Billions Yet to be Awarded

From the Inflation Reduction Act, $61 billion in climate funding has been awarded for more than 6,100 projects (excluding loans, direct government spending, and tax credits) through September 5, 2024. We estimate that the IRA has just over $33 billion (or 35 percent) in remaining funding.... 

With our property in Nebraska, we have been trying our best as private individuals to participate in these efforts, with the expert assistance and cooperation of the Lower Platte South Natural Resources District.  See photo below.  We estimate that the carbon sequestration from this 71 acre conservation easement amounts to at least 100 metric tons of CO2e annually.  Unfortunately, this seems to be a rare project.  We are trying to encourage others, including state and local governments eligible to be partners with these funds, to do more carbon sequestration through conservation.  

Election 2024 Choices

October, 2024

Lincoln —  Back in 2020, my preferred presidential candidates were Steve Bullock, Jay Inslee, Michael Bennet, Amy Klobuchar, Kamala Harris, and Mitch Landrieu, more or less in that order.  All were relatively young, with much practical political experience and a minimum of ideological baggage.  

So now comes the opportunity in 2024 to pick one of them, Kamala Harris.  She, with Tim Walz, who also fits that profile (and has rural Nebraska roots), make a good ticket.

My thoughts on the other choice, the Trump and Vance ticket, are well expressed by Sam Meade Cordes, formerly an agricultural economist at the University of Nebraska.   He asks, "Where is the rural America that raised me?"  It is a profoundly disturbing question.  I ask it as well:  

https://dailyyonder.com/commentary-where-is-the-rural-america-that-raised-me/2024/10/09/

There's a lot of work to be done whatever the outcome and I welcome the opportunity to pitch in on a wide variety of problems, foreign and domestic.  Now more than ever.     

Point-Source Emissions Threaten to Undo Climate Action Plans

October, 2024

Lincoln — The City of Lincoln has launched a second round of homeowner incentives to replace fossil-fueled furnaces and air conditioners with electric heat pumps.  Low and moderate income families can receive up to $3000 for the conversion, on top of Lincoln Electric System and federal tax credit incentives. The "initiative is an important part of the city’s plan to reduce greenhouse gas emissions by 80% by 2050," according to the Lincoln JournalStar. 

This is a good program.  Each household that converts reduces carbon dioxide equivalent (CO2e) emissions by 1-2 metric tons annually.  Last year's pilot program reduced emissions by 250 tons of CO2e.

Another good local government effort is the acquisition and restoration of grasslands and wetlands at 27th and Arbor Road.  Each acre protected or restored can reduce 3-7 metric tons of CO2e emissions annually.  If 155 acres is protected at 7 tons per acre (both generous estimates) the annual reduction would reach 1000 tons.  

Both the heat pump conversions and protection of natural resource buffers are part of the Lincoln-Lancaster Climate Action Plan, adopted in 2021. 

But context is needed.  These and other worthy efforts will likely not be enough to meet Lincoln's goals for CO2e reductions.  Not when point-source emissions overwhelm them.

Smithfield Packaged Meats Corp. in west Lincoln was given a local government permit this year for 38,554 annual metric tons of CO2e.  In 2022, soybean processor Archer Daniels Midland in northeast Lincoln reported CO2e emissions of 158,580 metric tons.  Just to offset the coal-fired (now gas-fired) ADM plant's CO2e output would require the equivalent of converting nearly 80,000 Lincoln households to heat pumps, or at least 35 square miles of additional carbon-sequestration on woodlands, grasslands, and wetlands.  Doing the math is depressing.   

Theoretically, local governments can, by law, require stricter controls on point-source CO2e emissions than are required by the federal Environmental Protection Agency or by the Nebraska Department of Environment and Energy.  A cursory review, however, suggests such measures are not under consideration.  Point-source emissions are not given attention in the local Climate Action Plan.  One reason may be that a 2019 local ordinance ceded the authority to the state.  

The state's Priority Climate Action Plan steers away from point-source emission controls in favor of distributing federal grants to voluntary projects in the agriculture production sector.  Announcing a $307 million federal grant this year, the governor said it would be used to "turbocharge the state ag industry." 

Looking at some of the state's largest CO2e emitters, one is located next door in Gage County.  Koch Fertilizer Beatrice LLC emitted 631,946 metric tons of CO2e in 2022.  That year, ADM's ethanol plant in Columbus emitted 1,163,383 metric tons.  

ADM has facilities throughout the midwest, some of which are in the company's plan to reduce CO2e emissions.  The Lincoln soybean oilseed plant is among the last to phase out coal as a part of this plan.  This presents an opportunity to look at how ADM's choices on reducing emissions are related to the regulatory environment in different states and localities, including those with stricter point-source controls.  ADM makes large political contributions to affect those environments, in Nebraska and elsewhere.  The same can be said for the Koch businesses.  Hypotheses are waiting to be tested.  

In the meantime, be prepared for less than good news in reaching our goals unless more can be done to address point-source emissions.  Per capita CO2e emissions in Nebraska already rank sixth highest in the nation. And don't be surprised as more frequent and more devastating storms strike in unexpected places, including our own state, city, and county.         

  

 

Missouri Does Not Have Standing to Oppose Student Debt Relief

October, 2024

Washington — Student loan debt relief for good cause has once again been stymied by dubious court injunctions.  The latest injunction raises eyebrows not only because it is the result of judge-shopping, but because the plaintiff, the State of Missouri, does not have the standing it claims to oppose the relief.

Although the U.S. Supreme Court in Biden v. Nebraska (2023) found, controversially, that Missouri's relationship to the loan servicer MOHELA was sufficient to give Missouri standing to oppose the first Biden debt relief proposal, that rationale does not attach to the much different debt relief effort now being promulgated by the Department of Education.  For example, most of those now eligible for the relief are linked more closely to loan servicers' errors and consumer protection failures, and the legal basis for the relief is grounded in the Secretary of Education's longstanding powers and obligations under the Higher Education Act, not on the previous HEROES Act justification disallowed in Biden v. Nebraska. 

The appropriate test for Missouri's standing in the current, much different case is whether Missouri is injured or if it actually benefits from the relief borrowers would be given.  That is not going to be a close call, as the supposed injury to Missouri even in Biden was conjured out of nothing.  And, clearly, the servicer MOHELA is not an arm of the State of Missouri, although both Missouri and MOHELA still make futile arguments in that direction.

That question was resolved earlier this year by the federal district court of Eastern Virginia in Pellegrino v. Equifax (2024):  MOHELA is not an arm of the State of Missouri.  If Missouri insists that it is, to have standing, then Missouri should pay borrower relief for MOHELA malfeasance.  Missouri cannot have it both ways.  

Judge-shopping is bad enough.  Giving plaintiffs standing when they have none is worse.  Many learned legal commentators, representing a broad ideological spectrum, have already doubted that Missouri had standing in Biden v. Nebraska.  That was a contrivance to carve out the narrowest of paths for the Supreme Court to make pronouncements on its "major questions" doctrine.  But this new attempt at debt relief is hardly a major question, if properly scored, as it deals primarily with fulfilling the promises the federal government made to borrowers over decades in its student loan programs.  Granted, it is hard to find a plaintiff who will be harmed by the government finally fulfilling its own obligations, but Missouri is certainly not it. 

  

American Voices Abroad: Get out the Vote

September, 2024

Berlin — Our friend and chair of Berlin-based American Voices Abroad, Ann Wertheimer, gave an inspiring speech recently in Hamburg.  Here is part of it. 

Defending Democracy rally, Hamburg, September 22, 2024

My name is Ann Wertheimer. I was born in New Jersey and lived there until I moved to Washington, D.C. to work as a public school teacher. I have been living in Berlin since 1971 where I taught English at the Freie Universität.

I am the chair of American Voices Abroad Berlin—or AVA, for short. AVA is a politically progressive group independent of all political parties both in the United States and in Germany. We offer a community for engaged U.S. citizens and provide a forum for a wide spectrum of views. We began in 2003 as Americans in Berlin Against the Iraq War. After a while, we began to focus on other issues and then changed our name.

And, by the way, we are not only citizens of the United States; we are also members of the community where we live. We seek to engage all members of this community in dialogue on issues of mutual concern.

Und übrigens sind wir nicht nur Bürger der Vereinigten Staaten, sondern auch ein Teil der Gemeinschaft in der wir leben. Wir wollen alle in dieser Gemeinschaft in einen Dialog über Fragen von gemeinsamem Interesse einbinden.

Joining American Voices Abroad is a way of engaging in American civic life even from here.

Democracy, we think, is something you do. You do it as an individual and you do it as part of a community.

Doing democracy starts with voting. Free and fair elections are the basis of democracy. Voting is how you do democracy as an individual, but significantly as one individual among many. Voting is a political act that we carry out with all of our fellow citizens.

A strong democracy needs high voter participation, but the United States State Department estimates that, of the over 80,000 U.S. citizens of voting age living in Germany, less than 10% voted in the 2022 general election—even though registering and voting from here is fairly simple. (If you haven’t yet registered, go to votefromabroad.org and do it.)

So why do so many overseas Americans not vote, not even in an election as crucial as this one? Do they not know that they can? Do they not know how? Or is it cynicism? Or resignation? Or fear of being tracked by the government? Does low voter turnout possibly reflect a lack of civic engagement among Americans abroad, a lack of community? In our efforts to participate in the life of our country of residence, in Germany, have we forgotten the rights and responsibilities of citizenship? Are we perhaps confused about what it means to act as individuals and, at the same time, to be part of the body politic?

With all good will, people may say, “My conscience just won’t let me vote for this or that person because I disagree with her so strongly on … name your issue.” So they sit out the election with a sense of political righteousness. In the end, the candidate who wins the election is often much further from the non-voter’s ideals than the candidate who offended their conscience.

Democracy may be exhausting, messy, confusing, and fragile, but it is truly our best hope. And we might take heart from legal scholar Jedediah Purdy, who writes: “Although no formula can make a polity democratic, there is one that goes a long way toward doing so: the principle that everybody votes.” (from Two Cheers for Politics: Why Democracy Is Flawed, Frightening — and Our Best Hope) ...

In the up-coming election, what’s at stake has never been more clear. It is the understanding that our government must work for all of us, that we are equal under the law, and that the rule of law, rather than the whims of one person or small group, must prevail....

We have learned that when wannabe dictators tell us what they intend to do, we should believe them. Wenn Möchtegern-Diktatoren uns sagen, was sie tun wollen, sollten wir ihnen glauben.

---

End Misrepresentation in College Pricing

July, 2024

Washington —  Of all the current problems in U.S. higher education (and there are many), one is said to be especially unsolvable:  pricing.

Credit is due Ben Unglesbee of Higher Ed Dive for describing why, and what pricing involves: discounting and other financial aid, legions of consultants, and even antitrust considerations.  An excerpt from his reporting:

The practice of marking down tuition sticker prices is decades old and comes with few benefits at this point, many experts say. It can mislead students and muddy the conversation around the value of a college education, while for institutions tuition discounting can wear on revenue and finances in a competitive environment.

“It’s not good for anybody. It’s not good for the students. And it’s not good for the institutions,” said Phillip Levine, an economics professor at Wellesley College, in Massachusetts, and author of the book “A Problem of Fit: How the Complexity of College Pricing Hurts Students — and Universities.”

“If you interviewed university leaders and institutions that are doing this, they will tell you it doesn’t make sense,” Levine added. “But there’s no way to get out of it.”

...Trying to tailor aid — and hence price — takes complicated statistical crunching. Often colleges turn to outside firms that can build what’s called a leveraging matrix for admissions offices....

Convoluted as the pricing system might be, there is no easy off ramp.  As Levine noted, one fairly straightforward — but illegal — fix would be for institutions to work together on pricing.

Elite colleges have indeed tried such a tactic in the past, and they’ve been sued under antitrust laws. The U.S. Department of Justice reached a consent decree in the 1990s with Ivy League schools in such a case, and more recently top-ranked universities settled a price-fixing lawsuit brought by private plaintiffs.

Notwithstanding the above, there is a way to get out of this self-destructive dilemma, which I outlined briefly on p. 86 of Stephen Burd's (ed.) new book Lifting the Veil on Enrollment Management....  Let me describe it here in more detail.

Misleading students and parents is often inherent in pricing, particularly when price is set by what is known in the enrollment management industry as financial aid leveraging.  Thousands of schools, public and private, contract with consulting firms to maximize enrollment at the least possible cost to their budgets, even to the considerable disadvantage of populations they purport to serve.*  How they do it — their algorithms and aid packaging practices — is not disclosed to consumers, for fear disclosure would defeat the purpose of the processes.  The current system depends on a certain degree of secrecy and deception.  

Too many in higher education, generally speaking, do not know that under current law, full disclosure of both the amounts of all financial aid awards, which determine actual price, and the criteria used to arrive at those amounts, is required of all schools participating in federal student aid programs ("Title IV").**  Moreover, misrepresentation of price can result in removal of a school from federal program participation.***  

The Secretary of Education could and should issue a "Dear Colleague" letter to all Title IV schools reminding them of current law requirements and advising them that he will be sending program review teams to representative schools to assess compliance.  The review teams would be looking at both in-house and consultant-contracted pricing practices.  Particular attention would be paid to how the practices either support or undermine the statutory purposes of Title IV programs, which are to improve higher education access for the financially needy.  

The Secretary would use the review teams to identify any regulatory ambiguities that need clarification and any practices that countervail Title IV programs, which would be considered pricing misrepresentations as well as violations of legally-bound fiduciary duty under Title IV program participation agreements.  

When current law, as above, is followed by schools and reinforced by the Secretary, antitrust concerns will be minimized by removing the need for alleged anticompetitive collusion among schools in pricing.  The Justice Department will recognize that the Secretary's enforcement of current law consumer-protection disclosure requirements is pro- rather than anticompetitive and that the Secretary's identification and elimination of pricing practices that undermine the purpose of Title IV programs are not violations of either the "per se rule" or "rule of reason" standard of anticompetitive behavior (DOJ's concerns), because the Dear Colleague is issued by the Secretary based on law and is not the result of any agreements among institutions. ****  

Dear Colleague letters are sub-regulatory and a time-honored way to solve even the most difficult problems.  In this case, such a letter could soon end a pricing system that so many university leaders agree "doesn't make sense."  

________________________________

* See especially Peter Schmidt, "Words Without Actions: The Troubled Relationship Between Enrollment Management and Diversity," in Lifting the Veil on Enrollment Management....(2024).

** 34 CFR § 668.42 Financial assistance information   

*** 34 CFR § 668.71 Scope and special definitions

**** https://www.justice.gov/atr/case-document/file/1518171/dl?inline

        

Replace Judge Cannon

July, 2024

Washington —  Whether federal district Judge Aileen Cannon should be replaced in the Trump classified documents case, for alleged incompetence and prejudice, is a matter that may soon be taken up by the 11th Circuit Court of Appeals.  She has already been reversed twice in the case by the higher court and her latest decision looks to meet the same fate.  

This recalls my own experience* with a federal judge several years ago, in a case in which I was the plaintiff against nine student loan lender defendants, calling out their false claims against federal taxpayers.  

In our case, after the judge in question had been assigned and began to make decisions, five of the defendants objected to him continuing, as they had no confidence that he was up to the job.  In advance of their request for his removal, the defendants asked us as the plaintiff if we would join them in seeking a different judge for their five cases.  I recall my lawyers saying to me that ordinarily, if the other side doesn't like a judge, we should welcome his assignment, but in this case the defendants seemed all too correct in their assessment.  They felt that the judge was so erratic that the outcome could be disastrous for either side based on neither facts nor law.  

So we joined with the defendants and a magistrate judge was appointed by the district court as a replacement, to handle the five cases.  Within a few months, settlements were reached.

But that left four other defendants that the first judge had previously tried to dismiss from the case.  We successfully appealed that decision to the 4th Circuit, which reversed and remanded the case back to him, not to the magistrate.  I asked my counsel if we should ask once again for him to be replaced with a different judge for the remand, given that the judge would likely hold it against us that we had previously asked for his removal on the other cases, and succeeded.  They concluded that it was very difficult to remove a judge based on only one side's request, and that we would have to take our chances with him, dangerous as that might be.

We paid the price.  His decision on remand went against us, which we then had to appeal once again to the 4th Circuit, which again reversed him.  These successful appeals are known by their shorthand descriptions: Oberg I, Oberg II, and Oberg III.  The latter decision was taken by the defendant Pennsylvania Higher Education Assistance Agency to the U.S. Supreme Court, which denied certiorari. This reversal continues to stand as an important precedent in matters of sovereign immunity of quasi-governmental entities.

But the remand sent the merits issues back to the same judge for a jury trial.  Again, my counsel and I discussed whether to request a different judge, on the basis that he had ruled against us three times, had been reversed three times (with the last reversal being validated by the Supreme Court), and would be looking for vindication in a jury trial over which he presided.  Again, we decided to press ahead with the same judge, sensing no chance that he would be replaced.  

The trial was marked by two important rulings the judge made against us.  He did not permit us to enter evidence from the Pennsylvania Auditor General and he did not allow us to present numerous instances of PHEAA perjury.  He did not give the jury instructions that followed the statutory definition of false claims, omitting "reckless disregard" as a basis for conviction.  He did not allow jurors to take notes during the trial and refused a jury request early in their deliberations to put his jury instructions in writing for them.  

I knew what we were getting into when we went to trial, so I was not surprised at either the process or our loss in this judge's courtroom.  The loss had to be weighed against several successes involving other defendants.  We won settlements in seven of the nine original cases and set an important standard for determining sovereign immunity.  Other plaintiffs would eventually succeed in litigation against PHEAA due to its loss in Oberg III.  

But that took time.  Rather than face mounting legal challenges, PHEAA finally gave up being a federal loan servicer four years after the trial, but only after doing enormous damage in the billions of dollars to the Public Service Loan Forgiveness program in the meantime.  PSLF has never been straightened out satisfactorily. 

It should be easier to replace judges when there is good reason to question their competence and prejudices.  Based on my experience, I think Judge Cannon should be relieved of any further work in the classified documents case, before even more damage is done to national security.  It should have been done much earlier.  The handling of classified documents is too important to be left to such a judge.  As a naval officer, I was once a ship's cryptographer with a top secret crypto clearance.  It was drilled into us that the mishandling of classified documents would have dire consequences.  It must stay that way.     

_______________________________

* See Dan E. Moldea, Money, Politics, and Corruption in U.S. Higher Education (2020). 

   

 

Justice Department Should Act to Reassure

July, 2024

Washington — In the wake of the tumultuous U.S. Supreme Court decision in Trump v. United States, a case that has alarmed Americans in that it puts a president above the law for actions most of us consider despicable, the Department of Justice should issue an emergency "Statement of Policy" to assure the country that it will continue to prosecute criminal and civil wrongdoing in the time-honored, two-century tradition of the U.S. Constitution.

Specifically, the Department of Justice should announce it will, notwithstanding Trump v. United States:

•  define "official" actions narrowly to prevent their being employed to cover illegal "unofficial" actions;

•  consider all presidential powers in the context of America's framework of limited government, with its separation of powers and checks and balances, including "core" presidential powers, which if used corruptly, cannot be "absolute";

•  rebut any "presumptive immunity" that tilts history's judicial scales unfairly, including those of Hammurabi, Moses, and Solon, and rely additionally on our own authors of The Federalist papers, who wrote that presidents must be "liable to prosecution and punishment in the ordinary course of law."  Immunity would not extend to withholding evidence from a jury when tantamount to bearing false witness. 

This emergency "Statement of Policy" will reassure citizens that the government's top agency for prosecution of wrongdoing, part of a co-equal branch in our system, is still on the job. 

The public should be given 45-day notice in the Federal Register to comment. Reaction will be overwhelmingly supportive, if the public is given the chance to weigh in.      

Lifting an Exasperating Veil

May, 2024

Washington —  This week Harvard Education Press is publishing Lifting the Veil on Enrollment Management, by Stephen J. Burd, editor.  The provocative subtitle is How a Powerful Industry is Limiting Social Mobility in American Higher Education.   It is a remarkable book, putting a spotlight on little-known college admission and financial aid practices that are devastating to the cause of equal opportunity and to the finances of needy families nationwide. 

My contribution to the effort is a chapter on the role of federal student aid in abetting the worst of the industry's practices, along with identifying expeditious remedies available under current law.  Other authors offer longer-term remedies that I support, but which, unfortunately, are unlikely to be enacted and implemented soon, if ever.  Time is of the essence: many current practices threaten financial ruin for students and families, especially this year with the uncertainty around FAFSA delays.  Moreover, the colleges engaging in these practices may themselves be unable to sustain them, and fail.  

My chapter makes the case for the Secretary of Education to send program review teams to selected institutions, fundamentally to determine if their largely covert enrollment management practices complement the purposes of Title IV of the Higher Education Act, or if they countervail them.  If the latter, the Secretary would use his powers under existing law to limit, suspend, or terminate the schools' participation in Title IV federal student aid. 

Among other issues, program reviewers would look specifically for (1) practices of aid packaging and leveraging that undermine federal aid, (2) deception or coercion of parents to apply for loans, and (3) disproportionately bad outcomes for students and families as viewed by race by income.  Institutions would have an opportunity to modify their practices before Title IV participation is cut off.  

Other remedies are available through consumer litigation.  Some of the practices could (and should) be challenged by class action or false claims lawsuits, especially those that violate the terms of multiyear promissory notes, transparency requirements, and misrepresentation prohibitions.  Violations are rife. 

Three federal agencies need to coordinate their efforts on litigation.  The Department of Education, the Consumer Financial Protection Bureau, and the Department of Justice have often been working at cross purposes.  DOJ has been especially obstructionist in how to address bad practices, seeing the issues only from an antitrust standpoint, rather than in terms of de facto civil rights violations.  Peter Schmidt's and Catherine Bond Hill's chapters should be eye-openers for DOJ.

I hasten to add that recent litigation may offer hope.   A 2022 private class action lawsuit, alleging that enrollment management practices at seventeen institutions violated the Sherman Antitrust Act, was quickly supported by a statement to the court from DOJ, because the practices at these institutions, DOJ agreed, amounted to collusion to increase the net price of college for the lower income.  But that also describes the net effect of the entire enrollment management industry very well.  The lawsuit, now in settlement, even notes the work of Don Hossler in making its case.  Hossler appears with a chapter in Lifting the Veil and his work, among others',  may offer a bridge to close the distance between agency interpretations. 

The need for federal agencies to get on the same page is urgent.  Chapters by Stephen Burd and Beth Zasloff illuminate the issues at the school and family levels.  Their chapters are infuriating to those of us who have been watching the self-inflicted descent of American higher education for too many years, with its attendant hypocrisy regarding race and class.  If anyone is still in doubt about what has been going on, who has been doing it and why, the chapters from Neil Swidey, Jon Marcus, Ozan Jaquette (with Karina Salazar and Patricia Martin), Kevin Carey, and Jerome Lucido spell it all out.  

May this book turn things around, and quickly.

Student Financial Aid Application Woes

May, 2024

Washington — Here is a critical analysis that will seem familiar to those struggling with a FAFSA student financial aid application form:   

Complicated application process

Most are aware that the ... applications are pretty confusing and complicated. The forms try to cover every conceivable case, making them extremely long and complex.

Depending on what the prospective student indicated on the initial forms, supplementary sheets might have to be filled out to provide further information. Because of this, most applicants need an average of 5 hours to complete the ... application and 99% of them arrive incomplete....

[The application] is heavily criticized because the forms can be difficult to understand and ... there are slow processing times due to a large volume of applications. [Emphasis added]

The above quotation is not a critique of FAFSA, however, but of the application for Germany's grant and loan program known as Bafög.  Clearly, the U.S. Department of Education's application form troubles are not unique. 

But our U.S. application system has been further complicated by an attempt to simplify it, without fully appreciating how fraught that might be from both substantive and procedural standpoints.  Simplification introduces inequities.  Procedurally the changes are proving to be a nightmare.  

Some of us have been advocating for years that the whole federal student aid system needs fundamental overhaul, to rethink the role of states and institutions, to build redundancy into higher education access, and to question the very purpose and existence of the FAFSA monster that is now devouring its creators. 

Re-Visiting the Rural Rage Controversy

April, 2024

Lincoln and Washington —  Last month, when I wrote a mixed review of White Rural Rage, an important but flawed book about rural America, I had no idea that so many other readers would likewise find serious shortcomings in it.  

First, there were complaints from scholars who claimed their own works had been distorted by the authors.  Then high-profile publications weighed in with their own critiques, exemplified by The Atlantic's "An Utterly Misleading Book About Rural America." 

Some of the critiques are guilty of piling-on.  The book may be flawed in multiple ways but its subject and message must not be overlooked.  Its subtitle, "The Threat to American Democracy," is only too true.  Critics themselves are often missing the main flaw of the book: the authors are short on solutions.  

Pointing this out, and offering more insights per paragraph than the authors and critics combined, is Farah Stockman, from an unlikely source on rural realities, the New York Times.  She provides new survey data that confirm what many of us know to be true, that there are many rural voters who would be receptive to Democratic candidates, and a return to two-party competition, if only Democrats would show up and engage on rural issues.  

What issues?  She names several.  Those of us with a long presence deep in the heartland know many others, festering unattended from decades of rural abandonment by both political parties.  Going after rural voters would seem to be an obvious Democratic political strategy, given these new survey data.  

Let blinkered disputes about the book subside and more exhilarating work begin, toward real engagement with rural America.

White Rural Rage, Reviewed

March, 2024

Lincoln and Washington —  White Rural Rage: The Threat to American Democracy, a new book by political scientist Thomas Schaller and journalist Paul Waldman, is such worthy documentation of the current state of rural collapse in America that a dozen copies of it should be placed in every rural library across the country. 

That is, if any such libraries are left.  The same goes for other places where people might read it: schools, nursing homes, doctor's offices.  Rural America has been hollowed out.  Some rural denizens, who will see the book as a slur on their character, will instead offer the book as kindling for an American Bebelplatz.  

The book deserves our most solemn attention.  The authors' impressive collection of statistical evidence and anecdotal information is frightening, even if sometimes presented as over-generalization.  Societal dysfunction is leading to authoritarianism and violence across a culture.  Most helpful is a technical note to understand the statistics, "What We Mean When We Talk About 'Rural'."

Also helpful is an up-front acknowledgement that many will dismiss the book as the biased product of two "coastal cosmopolitans."  Indeed, more should have been done to allay such concerns.  The book, for all its strengths, is regrettably weak in citing authoritative and readily available rural sources like the policy-oriented Center for Rural Affairs and the rural journalist nonpareil Art Cullen.

A book like this should likewise not have omitted mention of key moments in the demise of rural America.  Richard Nixon's Secretary of Agriculture Earl Butz told farmers "get big or get out," accelerating depopulation. His blunt directive was representative of decades of federal Farm Bills that wiped out generations of family farms in favor of corporate agriculture.  Later, other countries' reactions to Donald Trump's misguided imposition of tariffs hit rural America hardest.  Trump's plundering of Commodity Credit Corporation funds to send welfare checks to producers to make up for it has turned farm country into a federal vassalage.  Columnist Alan Guebert tells these sad tales from the deep heartland as few others can, and references to his work would have dispelled the book's coastal cosmopolitan bias. 

Another omission is an explanation of how the rural communication networks established by land grant universities have become conduits for the spread of rural rage.  The Cooperative Extension Service, established by the Smith Lever Act to convey university research, never completely cut its former ties to the Farm Bureau, a powerful interest group aligned with corporate agriculture and monopolies.  To many, they are still synonymous, or at least compatible in outlook.  Trump relies heavily on the Farm Bureau to do his business in the heartland.  

The most striking omission in the book becomes apparent as readers surely scream at virtually every page, "So what is anybody doing about this!"  There are few if any anecdotes about Democrats' efforts to counter the authoritarian Republican takeover.  Instead, in chapter after chapter, the disproportionate influence of rural areas in our constitutional system, especially in the Electoral College and the Senate, is highlighted and blamed.  The question of why Democrats don't compete in rural areas, if this is where the most consequential votes exist, is not seriously addressed.  

A reason for this may be that one of the authors once advocated that Democrats could safely give up on winning votes in the South, which in many places heavily overlaps with rural.  It is a strategy that national Democrats have pursued nationwide — essentially giving up on rural voters and trying to rely on identitarianism to win.  Many rural Democrats have fought this abandonment intensely, and lost.  Their anecdotes are sorely missing from this book.  It's long past time to name the names responsible. 

In the final chapter, remedies for white rural rage are offered but they are not convincing.  Nobel laureate Paul Krugman reviewed the book and concluded that the demise of rural America was inevitable and the situation is fundamentally hopeless.  Neither is true, but that is not an erroneous reading of the book, sadly. 

The authors end with hope that a movement with a better vision of the future will be created.  But just who would lead this movement is a big blank.  The authors do not develop a case along the way that a change in Democrats' strategy, or courageous leadership from the nation's land grant universities, or less counterproductive Farm and Food Bills could show the way.  Actually, those three in combination could make a huge difference.  

Maybe a quick second edition could overcome these shortcomings?  That's a scream and a plea.     

Reject the Proposed Price-Fixing Settlement

January, 2024

Washington — Because it is one of the largest, most-consequential higher education lawsuits in recent memory, federal Judge Matthew F. Kennelly should not approve an unbalanced, unfair, and secretive settlement proposed by the plaintiffs and several defendants in Henry et al. v. Brown.  The much-disputed class-action case deals with price-fixing to raise the net price of attendance for the financially-needy at seventeen prominent institutions.*  

The settlement as proposed shortchanges student victims, represents a victory for the "enrollment management" industry at the expense of transparency in higher education finance, and thoughtlessly ignores the interests of taxpayers.   

Consider, for starters, this proposed provision: 

By [DATE], Settlement Class Counsel will move for an award of attorneys’ fees not to exceed 1/3 of the Settlement Fund, plus any accrued interest, reimbursement of litigation costs and expenses not to exceed $12,000,000 and service awards of up to $20,000 for each of the eight Settlement Class Representatives to be paid out of the Settlement Fund. If the Court grants Settlement Class Counsel’s requests, these amounts would be deducted from the Settlement Fund.

Because the proposed settlement fund is now $118 million and growing, attorneys fees will amount to over $39 million, in addition to up to $12 million in costs and expenses, or $51 million.  The victims of price-fixing in the affected class are expected to be awarded only $750 each.  And the eight named settlement class representatives will each get up to $20,000, or about .0004 (less than one-half of one percent) of the amount awarded to counsel.  Although counsel's work is commendable in routing out collusive institutional behavior, the case was notably assisted by a statement of the U.S. Department of Justice and an investigation by the New York Attorney General.   

Those who have followed this case will notice that the named representatives have changed somewhat since its original filing.  This may be the result of standing issues or because the representatives and their families were targeted for investigations themselves by the defendants.  If the latter, the awards do not adequately compensate the representatives.  One can only imagine what plaintiffs' families may have been subjected to, although Judge Kennelly seems to have mitigated the worst of it.   

Consider next the matter of transparency, which is being intentionally abandoned in this proposed settlement.  The defendants will not have to disclose any of their price-fixing methods (behind which there is a large consulting industry) and will be able to claim that they have committed no wrongdoing.  But was there wrongdoing?  What exactly defines price-fixing?  Is the public (let alone the regulators) supposed to guess?  Judge Kennelly, in denying an early motion for summary judgement against the plaintiffs, wrote this about the "enrollment management" methods at the heart of the case: 

The plaintiffs allege that ... the defendants ... purposefully "maintain a shroud of secrecy over" their enrollment management practices to avoid legal scrutiny.  Id. ¶¶ 157–58.  The evidence the plaintiffs cite is more than sufficient....   [Emphasis added]

Discovery in this case was extensive, the result of two years of "hard-fought litigation," according to the settlement proposal.   So what was discovered that is worth $118 million to cover up?  The schools must find something hugely threatening to be willing to pay such amounts to prevent the public from seeing what they (and their consultants) have been doing to drive up net price for those who can least afford it.  The amounts speak for themselves.  "Varsity Blues" pales in comparison.   

But also consider that several of the defendants have not yet agreed to settle and may be willing to go to trial to exonerate themselves.** This is also plausible.  I have spoken with many financial aid administrators at other colleges who have told me of internal struggles over the methods at issue.  (These methods are not limited to seventeen elite institutions but are in play at hundreds if not thousands of other schools.)  Not always have the price-fixers won out.  Among other reasons, the use of these methods often has a disproportionately adverse effect on minority populations, which when employed would give lie to institutional pronouncements supporting racial diversity and equity.  All of which may explain why some schools will go to extremes not to let the public see what is behind their decision-making.  

Consider next the interests of taxpayers in this case and its proposed settlement.  All of the schools involved are non-profit 501(c)3 institutions that encourage and receive tax-deductible contributions.  Such amounts are often referred to as "tax expenditures" in public finance.  If and when these funds are used in a settlement to deprive the public from understanding what goes on in financial aid offices behind closed doors, it is a misuse of the funds.  As a donor, I do not want my contributions paying for cover-ups.  

Additional concern:  does the proposed settlement also involve a supplemental agreement beyond the "merits" settlement, by which the class representatives are prohibited from disclosing any of the discovered materials?  Such non-disclosure agreements should be fully disclosed and the representatives made fully aware of the burdens being put on them.

I hope Judge Kennelly raises all of the above issues and considers what good might come of the case if the public interest is placed front and center.  Among those who need to know what is legal and what is not are financially-needy families and well-meaning counselors and advisors who try to inform them.  Imagine future "college nights" at high schools where families are told honestly what to watch out for in college financial aid packages, and how not to become victims of enrollment management price-fixing at any school they choose to attend, public or private.  

This case will have a good outcome only if it ultimately results in less reliance by the financially-needy on student and parent loans.  It will have a bad outcome if it merely shuffles hundreds of millions of dollars among the educational and professional gilt-edged.  Judge Kennelly can make a good outcome happen by requiring a better settlement.  

______________________________

* Plaintiffs alleged that seventeen universities "violated the antitrust laws by agreeing on a common formula and common principles regarding financial aid, and by exchanging competitively sensitive information concerning financial aid principles, formulas, and pricing."

** Settling defendants: Univ. of Chicago, Vanderbilt, Yale, Columbia, Emory, Duke, Brown, Rice.  Other defendants: Cal Tech, Cornell, M.I.T., Penn, Dartmouth, Georgetown, Notre Dame, Johns Hopkins, Northwestern.