The Red Line

What does the incoming Trump administration propose to do about the fast-growing, loss-ridden $1.3 trillion federal student loan system?

Unfortunately, senators barely touched on this issue at Tuesday’s confirmation hearing for Betsy DeVos, Donald Trump’s choice to be education secretary. In particular, they should have zeroed in on one target, the Public Service Loan Forgiveness program, a ticking time bomb set to go off this October.

Americans pay far more for branded prescription drugs than people in any other developed nation, exactly the kind of bad deal that President-elect Donald Trump decried repeatedly in his campaign. The U.S. was reminded of this outrage in September when it learned that drugmaker Mylan NV has been charging Americans more than $600 for its EpiPen two-pack while selling it for only $69 in the U.K.

Why does this kind of inequality persist? The main reason is that, by law, Medicare and Medicaid cannot use their volume purchasing power to negotiate lower prices, as do health agencies in virtually all other developed nations.

When the U.S. Education Department shut down ITT Technical Institute at the beginning of the fall semester, some people saw it as just desserts for the for-profit college. Given ITT’s relatively low graduation rates, alleged use of deceptive job placement figures in its recruiting efforts, and high numbers of loan defaults and delinquencies, the government may have seemed justified in refusing to fund more loans to ITT students.

Yet, now, 35,000 students are suddenly without a school and 8,000 faculty and staff are unemployed, and the entire episode shows that the government remains fixated on problems in the for-profit sector while virtually ignoring that all of U.S. higher education has long been guilty of what, in another business, might be called price gouging.

Since releasing his policy brief on immigration in mid-2015, Donald Trump has said repeatedly “build the wall” and “they all gotta go,” simplistic renditions of his border security and deportation policies. Recently, he has been shifting all over the map on illegal immigration, and this week he’s attempting to set everything straight in a Phoenix speech.

What Trump really needs to talk about is the third principle set forth in his policy brief, the one addressing legal immigration: “Any immigration plan must improve jobs, wages and security for all Americans.”

It
was widely observed that Brexit was driven by anti-immigrant sentiment. A new Ipsos poll
confirms that about half of Brits have a negative view of immigration, while
only 35 percent view it positively. Much concern has focused upon European
Union citizens currently residing in the U.K (they’ll certainly be
grandfathered, as will U.K. citizens living in the EU), but the real question
is what kind of long-term immigration policy the U.K. should adopt.

The biggest U.S. banks are the strongest in the world, which is why we should break them up right now. They just passed the Federal Reserve’s annual “stress tests,” and they navigated smoothly the moderate stresses of post-Brexit financial markets turmoil, which has shaken many big European banks.

The alternative to break-up is Dodd Frank, the 2010 bank law that, instead, employs intensive regulation to ensure the safety of our “too-big-to-fail” banks. Recently, both the Federal Reserve and the House GOP announced proposals with the idea of ensuring bank safety without such smothering government oversight.

Both the Fed and House GOP proposed increased equity capital standards. However, they head in exactly opposite directions.

Brexit has brought forth a legion of Chicken Littles. They have predicted doom for the United Kingdom, stripped of its free access to the European Union’s common market, diminished in its own realm by Scottish independence and, then, the departure of Northern Ireland.

The sky is not going to fall.

Yet another study has found that preschool yields no significant educational benefits. After spending £2 billion annually for almost a decade to fund an expansion of preschool to cover all three-year-olds, the United Kingdom had no lasting improvements in educational achievement to show for it, researchers have found.

Donald Trump’s assault on free trade has elicited almost universal pushback in defense of the global trading system. The president summed up his critique of trade in his inaugural address, describing its impact as “American carnage” in the form of “rusted out factories scattered like tombstones across the landscape,” after “one by one, the factories shuttered and left our shores, with not even a thought about the millions and millions of American workers that were left behind.”

Last year, Trump’s critique was validated in a study by MIT Professor David Autor and colleagues entitled “The China Shock,” which focused upon the extensive damage wrought by that one nation upon the American manufacturing sector.

The free-trade establishment conceded only that “some lose out,” referring to unemployed U.S. factory workers.