Eyes on the Storm Lake Forum

March, 2019

Lincoln -- This Saturday's Heartland Forum in Storm Lake, Iowa, is a chance for Democratic presidential candidates to show their Rural Policy bona fides.

Most are dodging the forum, showing they have none. Elizabeth Warren will show up and, if anyone is paying attention, lay out an impressive platform. Iowa Democrats might just take notice and move her to the top of the polls. National Democrats who understand that winning in rural states is the key to regaining the Senate and the Presidency might also take notice.

Warren so far is the only candidate in either party who demonstrates a sufficient appreciation of the real problems facing farmers and rural economies. And rather than wringing her hands about it, as do Bill Galston (at Brookings) and Paul Krugman (in the NYT), she knows what she would do about it.

Here are the closing passages in Warren's otherwise wonderfully policy-wonkish platform that especially got my attention:

More than a century ago, during the Gilded Age, prairie populists joined together to fight for farmers during a time of massive economic transformation. They understood that working on the farm was honorable work that deserved to be recognized just as much as other occupations.

In his famous “Cross of Gold” speech, William Jennings Bryan said: “The farmer who goes forth in the morning and toils all day, begins in the spring and toils all summer, and by the application of brain and muscles to the natural resources of this country creates wealth, is as much a businessman as the man who goes upon the Board of Trade and bets upon the price of grain.”

Like Bryan, I will fight for farmers — “for this broader class of businessman.” I want Washington to work for family farmers again, not just for the agribusiness executives pocketing multi-million dollar bonuses or the Wall Street traders sitting at their desks speculating on the price of commodities. I want family farmers to be fairly rewarded for their hard work. That is how we build an economy that works for everyone.

Nebraskans: Are you paying attention? Are there any prairie populists left in the home state of William Jennings Bryan? From what I hear, not many. Some – surely not all – Nebraska and Iowa farmers are saying that they are not concerned about low ag prices; that this is a sacrifice necessary to stop unfair Chinese trade practices in high-tech computing.* Or something. Never mind that most farmers had never heard of the esoteric technology issue before. Anything, even losing the farm, is apparently not too much to rationalize years and years of voting with the "Wall Sreet traders" and the monopolists. William Jennings Who?

* An Iowa farmer told the Washington Post: “As the farmer sees it, we’ve had times a lot worse for grain prices as we’ve got right now. We know China’s been screwing us for years, not only on farm products but on technology. We know we can duck our heads and pull our boots on and get through this, and, in the long run, the whole country is going to be better off."

Re-framing Issues and Approaches to the HEA

March, 2019

Washington -- The newly introduced Hassan-Durbin PROTECT Act deserves passage as soon as possible. It contains many long overdue reforms in programs under the Higher Education Act.

It has an impressive list of supporters who are trying to watch out for the interests of students, families, and taxpayers. Those who need financial aid – especially the veterans among them – are being exploited unconscionably by predatory colleges and predatory loan servicers. Federal money in higher education is often doing more harm than good, setting up new victims to join countless others whose lives have already been damaged by huge debts and worthless degrees.

Unfortunately, the bill has virtually no chance of passage this year. It will never make it out of committee.

It's possible some parts of the bill could be incorporated into a Higher Education Act reauthorization, but that looks unlikely because of the way issues are being framed. Politically, the rhetoric falls into the same partisan dichotomy that ties up the Senate on almost all legislation.

There are two ways around the impasse. One is for the Democratic sponsors to wait until the 2020 elections and hope for a Senate majority. Another is to approach the issues with different means to the same ends, approaches Republicans should welcome unless they are hopelessly craven instruments of the exploiters.

Those means are federalism and market forces.

The original HEA of 1965 was based on "cooperative federalism." Federal dollars were to be matched by states and institutions three to one (75-25). Up front, others besides federal taxpayers had "skin in the game." Restoring matching fund requirements would create the "skin" that Republicans (and many Democrats) profess to want.

Republicans also want uniform treatment of all higher education institutions, with no special legislation to control the excessive dependence of the for-profits on federal funding. Returning to cooperative federalism at 75-25 for every HEA Title IV participant would accomplish uniformity.

Republicans want fewer federal regulations and more reliance on market forces. Returning to cooperative federalism would require all institutions to respond to markets. This is not a problem for public and non-profit institutions, where there is tuition income. In the case of tuition-poor for-profit institutions, the practical effect of this would mean that once again they would have to work with industries and employers that would find value in the training and education the schools offer, and not rely almost solely on federal largess (and exploitation of veterans' GI Bill benefits).

Republicans presumably want more state and local control over higher education rather than concentration of authority at the U.S. Department of Education. That could be achieved by preventing the Secretary from "preemption" of traditional state consumer protection laws, and by accepting many provisions of the PROTECT Act that strengthen states.

If Republicans would be willing to approach HEA issues on these terms, expressed as tenets of conservative ideology, then Democrats should work with them. Otherwise, PROTECT must wait for the 2020 elections.

“It shouldn’t be this easy..."

March, 2019

Washington -- “It shouldn’t be this easy to defraud the Department of Education.”

That was the last line of a New York Times article about how some $13 million of federal taxpayer money is missing in the collapse of Argosy University. The money was intended for students but used for other purposes by the for-profit college.

Oh, but it is easy to defraud. I've worked at the Department and can attest to how easy it is. I've also sued those who defrauded the Department and won settlements getting some of the money back. My files are full of information, most* of it public, as to how fraud happens and who has been doing it, by name.

• One way is to get someone from your organization or industry appointed to a high position in the department, then count on her or him to deliver on key decisions. There are laws against conflicts of interest, under which such appointees are to recuse themselves from decisions that help their former employers or industries, but they are often unenforced.

• Another way is to get inside information from friends in the Department who will give you advice on upcoming audit schedules and how to adjust your books to thwart the auditors.

• If there is a legal question, don't ask the Department if you are afraid of the answer. Hire your Washington lobbyist to give you a legal opinion and act on that. Before doing so, ask a friend in the Department "off the record" as to what the answer would be, so you can act accordingly.

• If necessary, just lie and count on the fact that perjury will not get you into trouble.

• Develop and execute a plan to take advantage of Department employees who might be fooled into approving something big by making it appear small, or by thanking them for a decision never made to see if the Department catches it.

All of the above examples are taken from actual incidents, for which there are written records. The sum of these frauds is in the hundreds of millions of dollars.

Recently, House committees and subcommittees have been looking into problems in programs under the Higher Education Act. In the hearings, the focus is on policy changes to avert future problems, not catching the miscreants who have committed the fraud. Often it is observed at such hearings that at the Department "the foxes are guarding the henhouse" but no effort is made by Congress to insist on catching the foxes.

It shouldn't be this easy to defraud the Department of Education, but it is.

*Some is confidential and cannot be disclosed.

Two Hearings, Two Suggestions

March, 2019

Washington -- The House and Senate both held hearings this week on troubled programs of the Higher Education Act.

The Senate Health, Education, Labor, and Pensions Committee heard testimony on simplifying the onerous student financial aid application, the FAFSA. Some interests don't want it simplified too much.

Before the Committee gives up or makes too many concessions to those who favor retaining many of the questions as they currently exist, it should review how the answers to those questions are used to undermine the purpose of federal grant programs. When states and institutions say they need FAFSA information to distribute their own financial aid, it may be to countervail rather than to complement the federal aid. (That is, to put greater rather than lesser loan amounts in students' aid packages.) The FAFSA is the sine qua non of the enrollment management industry, which thrives on showing institutions how to manipulate financial aid packaging.

Stephen Burd of New America has illuminated how this works and who does it in his series "Undermining Pell." Research by Leslie Turner and others has shown that several billion dollars of Pell Grants are annually subjected to "displacement" through packaging practices that burden low income students with loans.

Suggestion: simplify the FAFSA but also require the Department of Education to have its program review teams look at how institutions package state and institutional aid, and require the Secretary to limit, suspend, or terminate (LS&T) institutions that undermine federal programs. Require the Secretary to make such evaluations a part of accreditation as well.

The House Subcommittee on Labor, Health and Human Services, Education, and Related Agencies heard testimony on predatory for-profit colleges. These colleges exploit low income students and set their tuition rates at the sum of federal grant and loan aid. They often provide an inferior education; excessive numbers of their student borrowers default on their loans. The cost to federal taxpayers is enormous, not to mention the ruined credit and financial burdens on the borrowers themselves.

One member of the subcommittee, incredibly, tried to change the subject by suggesting that the real scandal in higher education involves highly paid coaches at public and non-profit institutions. Two members said they would be amenable to more oversight of for-profit colleges if the same standards were also applied to all higher education sectors.

Much attention was given to the 90-10 rule, under which for-profit colleges must generate at least 10% of their revenue from other than Department of Education sources in order to qualify for participation in the Department's programs. Panelist Robert Shireman provided a good history lesson about 90-10. There was a time when for-profit colleges like the University of Phoenix generated much revenue from employers who paid the institution for training workers. Educational quality was upheld by the marketplace. When it became easier to tap federal programs, however, through federal relaxation of standards in 2002 and 2006, UoP changed its financial strategy to go after the easy federal money, as did most of the rest of the for-profit sector as well.

Suggestion: Go back to the original HEA of 1965 and make federal programs matching at $3 dollars federal for ever $1 non-federal (in cash or in-kind), as they were then. Apply the requirement to all sectors equally. For-profit institutions would then have to prove their worth in the marketplace to come up with match from employers, full-paying students, and profits plowed back into endowments, rather than making well-placed political contributions to ensure inadequate (even corrupt) federal oversight.

You want uniform standards, based on the marketplace, and fewer complicated federal regulations? There you go. Not to mention "skin in the game" and a precursor to the inevitably necessary matching programs at the heart of even more significant efforts to deal with the cost of college.

Tearing Down Walls

March, 2019

Berlin -- Today, going out for breakfast Brötchen at the nearest Bäckerei, I crossed the Berlin Wall, or what is left of it. Its former location is marked by a line of street-level paving stones. Coming back from the corner of Aadelbert and Melchior, in old East Berlin, I walked along the former death-strip at Bethaniendamm, which is now a park, joining an old man walking his dog and a new mother with her baby carriage.

All walls should come to such ends.

Tearing down walls in Washington got a review in today's Washington Post. Curator Molly Ruppert offered a wall to smash at the Otis Street Arts Project. Of all the walls in the show, I most like the one where barbed wire rolls are drawn on flimsy curtains.

Across Bethaniendamm at Aadelbert is a wonderfully mussy old petting zoo with two ponies, several goats, a sheep, and chickens. There is even a Misthaufen, a good symbol for where wall-mentality should wind up.

The Study of Languages

March, 2019

Berlin -- The primary language spoken here in the Kreuzberg borough is German but Turkish is a close second, as the area is the home to around 200,000 Turks. When Americans buy from German shops, they can often use English to get by if necessary, but when shopping at Turkish-owned businesses, they should be prepared to speak German, the second language of the Turks.

Many are the conversations in people's second languages, in Berlin and around the world. Some people – as many as possible – need to speak two or more languages or economies don't function, let alone governments.

Today I was at the West Aliierte Museum in Berlin, hidden in the woods by the Olympic Stadium, where many documents recounting the history of the western allies are in German, English, and French. France was one of the governing powers in Berlin and controlled the northwest sector of the city for nearly five decades. The French Army defended free Berlin from the Soviets just as did the Americans and the British during the Cold War.

France is actually our oldest ally, having played a strategic naval role in the American Revolution. Benjamin Franklin, a speaker of passable French, must be given a large measure of credit.

So it was with amazement when I watched, via live streaming last week, a U.S. House of Representatives hearing on how student loan servicers shamelessly exploit borrowers, during which Congressman Tom Cole of Oklahoma explained that the root of the problem is that too many students are studying French literature. Apparently the point he was trying to make is that students sometimes choose majors that don't pay well, like foreign languages, which can get them into loan repayment trouble and lead to servicer exploitation. But why pick on French (and not the servicers)? Those who major in French literature often go into teaching this essential language in our schools and colleges.

Teachers are not paid well. Nor are first responders and those in military and other public service. That is why we have the Public Service Loan Forgiveness (PSLF) program, to help student loan borrowers in low paying but essential professions. That is why we have hearings, when programs like PSLF are abysmal failures. Yes, we understand that members of Congress receive political campaign contributions from industries that would like to shift blame to anyone but themselves, even to making ridiculous and, frankly, unpatriotic arguments. France and Germany are two of our best allies. We need to know their languages.

To those who think we need fewer students of foreign languages and literatures, as John F. Kennedy would say, "Let them come to Berlin." Congressman Cole, face up to facts and fix the student loan servicer problem. The problem is not French, or any other literature.

American Voices Abroad – Berlin

March, 2019

Berlin -- American Voices Abroad (AVA) met last evening in a Schöneberg cafe to hear speaker Isabella Greif talk about her new book The Unresolved NSU Complex. She attended the trial of five German neo-Nazis that ended in July 2018. What is unresolved is the failure of German law enforcement and domestic intelligence to understand home-grown terrorism.

On the subject of intelligence gathering, I briefly discussed a new book by Danielle Jaussaud, The Dilsberg Engagement: Love, Dissent and Reprisals, and recommended it enthusiastically to all AVA members. It is not only a good read, but there is a historical connection between AVA and the author's account of illegal U.S. Army spying on both Germans and Americans in Germany in 1973.

The Dilsberg Engagement recounts the story of the author and her boyfriend Mike McDougal, an Army military intelligence specialist stationed in Kaiserslautern. He discovers illegal surveillance activities including wiretaps and consults an American attorney in Heidelberg about what to do. They decide their best option is to make the discovery public in the biggest possible way. They capture headlines in all the major U.S. and German newspapers that summer.

At the same time, an Army officer in Berlin is troubled by his assignment to spy on American civilians in Berlin who are engaged in perfectly legal activities, like registering U.S. voters and signing petitions. He contacts his U.S. Senator, Lowell Weicker, who takes the issue to the Senate Watergate Committee, which is investigating the president, Richard Nixon. The Americans in Berlin under surveillance, members of the AVA's predecessor organization, then sue the U.S. Department of Defense and eventually win a monetary judgment and set a precedent against the U.S. government's spying on Americans abroad.

The identity of the Berlin whistleblower has never been revealed and is unknown to this day. The Kaiserslautern soldier, Mike McDougal, died in 2010. His story, and that of Danielle Jaussaud, who was very much a part of it, should not be forgotten. They were heroic in how they exposed illegal activities and turned the tables on the Army so that they became the better defenders of American values and the rule of law. The Army wanted to court-martial McDougal, but in the end knew better than to try. McDougal left the Army with an honorable discharge.

The story is inspiring. I was deeply affected last evening taking the book to the AVA meeting. Mike McDougal is gone, but his name and his story and his spirit were present once again in Germany. Thank you, Danielle Jaussaud, for writing an engaging, funny and sad, remarkable book.

The Fear Your Food Movement

March, 2019

Berlin -- Yesterday, doing my grocery shopping at The Bio Company in Kreuzberg, I ran across an ad campaign for organic food:

Ackergifte? Nein Danke! (Agricultural Pesticides? No thanks!) It's a clever take on the old and successful campaign Atomkraft? Nein Danke!

I'll try to get an Ackergifte lapel button. It features a healthy honey bee.

Meanwhile, U.S. Secretary of Agriculture Sonny Perdue is calling on Americans (and the world) to reject the "fear your food movement." He does not name anyone in particular behind the movement but ascribes it to Internet-fueled hysteria.

I am one who fears my food with a rational, scientific basis for the fear. There is a worldwide diabetes and obesity epidemic, well investigated and reported, which we ignore at our peril. Its cause is ever-increasing processed foods and added sugars in our diets.

Our pollinators are also disappearing. In fact, the whole insect world is threatened. A primary cause is agricultural chemicals.

In Sonny Perdue's world, we should cast aside concerns about unhealthy food and agricultural practices that are destroying the very basis of our agriculture. He promotes GMO technology that makes crops immune from the herbicides that kill other plants on which pollinators and the larger insect world depend.

Here is a proposition for Secretary Perdue: put GMO and nutrition science in service to the cause of helping farmers produce healthy food with which to feed the world, not unhealthy food that is the cause of the diabetes and obesity epidemics. Help create demand for locally produced, pesticide-free food that will create urban and rural jobs and provide livelihoods for farmers who practice diversified agriculture and are not contracted slaves to monopolies. Help repair our broken food system, not break it further.

And don't try to tell the EU that it must import unhealthy food. Ackergifte? Nein Danke.

A Ray of Hope on the HEA

March, 2019

Washington -- Finally someone is talking sense on what needs to be done in the reauthorization of the Higher Education Act. From Inside Higher Ed (emphasis added):

"Senator Patty Murray said Thursday that an overhaul of the Higher Education Act should tackle college affordability directly by addressing state investment in public colleges and boosting federal spending on need-based aid programs like Pell Grants.

"Murray, the ranking Democrat on the U.S. Senate's education committee, argued that even when college students receive federal grant aid, it covers a diminishing proportion of the total cost of college -- meaning more low-income and minority students in particular are forced to take out student loans."

At long last someone in Congress is acknowledging that throwing more money at Pell Grants will not, in and of itself, necessarily make college more affordable for those with financial need. When states and institutions decrease their efforts in response, the financially needy go more deeply into debt.

One of the biggest mistakes in the history of the Higher Education Act has been Congressional funding of programs that do not take into account state and institutional funding. That is the legacy of the Education Amendments of 1972, which created programs like Pell Grants that dropped state and institutional matching requirements. The original HEA of 1965 wisely leveraged state and institutional funds, but that approach has atrophied.

I know whereof I speak, having been both a state budget official and an institutional official who witnessed the eager disinvestment of many of my colleagues. My research has also concluded, based on empirical evidence, that low-income borrowing goes up regardless of whether Pell levels are up or down. I also invite attention to this article, in the journal Publius, which demonstrates the greater efficacy of matching programs.

Acknowledging the problem is the first step in correcting it.