The Auron MacIntyre Show - Make the Colleges Pay! ｜ Guest： Inez Stepman ｜ 10⧸6⧸23

00:00:00.000 We hope you're enjoying your Air Canada flight.

00:00:02.320 Rocky's Vacation, here we come.

00:00:05.060 Whoa, is this economy?

00:00:07.180 Free beer, wine, and snacks.

00:00:09.620 Sweet! 0.95

00:00:10.720 Fast-free Wi-Fi means I can make dinner reservations before we land.

00:00:14.760 And with live TV, I'm not missing the game.

00:00:17.800 It's kind of like, I'm already on vacation.

00:00:20.980 Nice! 0.94

00:00:22.240 On behalf of Air Canada, nice travels.

00:00:25.260 Wi-Fi available to Airplane members on Equipped Flight.

00:00:27.200 Sponsored by Bell. Conditions apply.

00:00:28.720 CRCanada.com.

00:00:30.480 Hey everybody, how's it going?

00:00:32.160 Thanks for joining me this afternoon.

00:00:33.580 I've got a great stream with a great guest that I think you're really going to enjoy.

00:00:37.640 So the student loan crisis.

00:00:39.600 It's something that Republicans reflexively move against.

00:00:43.300 They say, you know, you took out these loans, you're stuck with them, bad choices, take that.

00:00:48.000 But I think there's a better strategy.

00:00:50.040 I think there's a more winning narrative for the ride on how to address this problem.

00:00:54.000 And my guest today is somebody who I think has put together a very good answer to this question.

00:00:59.200 And Ned Stepman, she is the host of the High Noon podcast.

00:01:04.120 And her columns appear all over the place, including The Blaze.

00:01:07.080 Thanks for coming on.

00:01:08.980 Thanks for having me.

00:01:09.960 And thanks for focusing on this issue.

00:01:11.560 I know it's something the right, as you say, just usually sort of dismisses with a wave of the hand.

00:01:17.100 But it has come back again and again, I think, politically to bite us in the rear, let's say, rear.

00:01:23.440 The fact that we don't pay attention to this issue the way that we should.

00:01:28.100 Yeah.

00:01:28.260 And, you know, you and I have talked a lot about the importance of patronage.

00:01:32.060 Understanding political maneuvers is not just a policy, you know, progress or some kind of white paper somewhere, but something that's actually going to attack your opponent's base while also, you know, helping you in the long run.

00:01:48.580 And so I think that's also a critical part of this discussion.

00:01:51.100 Guys, we're going to get into all that in just a minute.

00:01:53.540 But before we do, let's hear from today's sponsor.

00:01:56.060 Universities today aren't just neglecting real education.

00:01:59.040 They're actively undermining it.

00:02:00.420 And we can't let them get away with it.

00:02:02.060 America was made for an educated and engaged citizenry.

00:02:05.620 The Intercollegiate Studies Institute is here to help.

00:02:08.440 ISI offers programs and opportunities for conservative students across the country.

00:02:13.060 ISI understands that conservatives and right-of-center students feel isolated on college campuses and that you're often fighting for your own reputation, dignity, and future.

00:02:23.580 Through ISI, you can learn about what Russell Kirk called the permanent things, the philosophical and political teachings that shaped and made Western civilization great.

00:02:32.700 ISI offers many opportunities to jumpstart your career.

00:02:35.460 They have fellowships at some of the nation's top conservative publications like National Review, The American Conservative, and The College Thinker.

00:02:42.600 If you're a graduate student, ISI offers funding opportunities to sponsor the next great generation of college professors.

00:02:48.920 Through ISI, you can work with conservative thinkers who are making a difference.

00:02:52.820 Thinkers like Chris Ruffo, who currently has an ISI researcher helping him with his book.

00:02:57.820 But perhaps most importantly, ISI offers college students a community of people that can help them grow.

00:03:02.860 If you're a college student, ISI can help you start a student organization or student newspaper or meet other like-minded students at their various conferences and events.

00:03:12.600 ISI is here to educate the next generation of great Americans.

00:03:16.280 To learn more, go to ISI.org.

00:03:19.200 That's ISI.org.

00:03:20.960 All right.

00:03:23.180 So like I said, so many Republicans, their knee-jerk reaction to bringing up this issue, the college loan crisis, is just saying, well, you know, you signed up for it.

00:03:33.000 It's $100,000 when you were 18.

00:03:35.860 Clearly, you knew what you were doing.

00:03:37.620 Now you should just be stuck with this forever.

00:03:39.220 I think it should be pretty obvious to people why that's a losing argument just in general, but specifically with a bunch of people who are about to become pretty much your leadership class across the nation.

00:03:52.160 But can you go into a little bit as to why this isn't the best move, the best approach for the right to have?

00:03:57.760 Yeah, I mean, I think what it's missing, laying aside the political convenience for a moment, but in truth, what it's missing is that the current system and the requirement of taking out loans is in very, very many ways a leftist setup, right?

00:04:12.640 It's a leftist patronage network, and we have made specific policy decisions over the last 60 or even 70 years that have given students, you know, a very sort of Hobson's choice coming out of high school, right?

00:04:26.740 The one route is for you to take out loans that are massively disproportionate now to the value of a degree.

00:04:34.160 I think a lot of if you did go to college in the 90s or the 80s or even in the early 2000s, the numbers have changed drastically in terms of the requirement of how much money you have to take out also vis-a-vis the value of the degree, right?

00:04:47.220 So that calculus has changed, and now you're entering the market, oftentimes getting the same job that your father or your grandfather would have been able to get without a college degree with the same salary, except you're coming out with, you know, 80, 90, $120,000 in debt.

00:05:04.380 That salary will not sustain that debt, right?

00:05:06.860 But the other option is not to get a college degree, and while we are trying, and I think the right has tried from some time to beef up essentially routes to success or the middle class that don't include this credentialing treadmill, the fact is those routes are much more degraded than they were even in 1970 or 1980, right?

00:05:30.860 So again, because we've put all of this taxpayer money and incentives, these are policy choices, right?

00:05:37.800 In order to make this credentialing treadmill work, what we've done is created a glut, and everyone kind of knows this instinctively, a glut of people who went to college who have degrees, which has allowed employers to then use it as a threshold requirement.

00:05:54.020 A lot of employers now are essentially using a college degree to make sure that you can pass a drug test, show up on time, and you'll learn some basics on the job.

00:06:02.200 It's not connected to anything that you learn in college.

00:06:04.720 And there's another piece we can get into this as we get into the more complicated and technical part of this as well, is that it would be a lot, you know, cheaper and fairer in many ways to establish basic competency without people having to take out $80,000 to prove that they're like have some basic competencies for entry-level jobs.

00:06:21.880 Well, a lot of the other ways that employers would be testing for that kind of basic competency will be ruled having a disparate impact by the EEOC, right?

00:06:31.680 So there's a civil rights law component to this that for some reason, I mean, Gail Harriot, who's a fantastic scholar on the impact of the civil rights law and generally specifically has written about the EEOC.

00:06:46.300 She says that basically it's totally arbitrary what the EEOC chooses to bar presumptively as racially discriminatory, right?

00:06:56.320 Because almost every, you know, screening mechanism produces a disparate impact, right?

00:07:02.000 Every single one you can think of, presumptively everything is illegal under the Civil Rights Act, but it's what the EEOC chooses and what it doesn't to actually look at.

00:07:10.740 And so what they have looked at are, for example, screening tests, right, or anything close to aptitude tests.

00:07:18.160 What they haven't decided to look at the disparate impact of is college credentialing, even though that also produces a disparate impact, right?

00:07:25.320 So that is one of the few ways employers have left under our current regime to try to test for basic competence.

00:07:31.640 But all of this put together is a system where the taxpayer has paid, I mean, trillions of dollars to universities over the years to essentially nudge people into getting this product, which now also comes with a strong side of an ideological indoctrination, right?

00:07:48.400 So the taxpayer right now under this system is paying the university sector to be more powerful, to be a powerful ideological gatekeeper, to credential our ruling class, right?

00:07:59.320 There's no reason why the government should be so strongly pushing that route, but that's the background.

00:08:04.940 So I think that's like the sort of background before you even get to forgiveness, student loans, right?

00:08:09.660 Before that kid ever signs on that $100,000 dotted line, that's the house he's stepping into.

00:08:15.120 Yeah, I'm going to be honest.

00:08:17.980 I'm kind of jealous of the way the left is able to just weave this kind of stuff together, right?

00:08:22.180 Like, look at this amazing system that we basically legally mandated, because you're not allowed to use any of the standard ways that we would actually look and understand and vet people for large-scale employment.

00:08:34.900 You know, we don't know who you are.

00:08:35.980 We don't know where you're coming from.

00:08:36.940 This isn't a hometown business.

00:08:38.100 So how do we look at your competence?

00:08:40.540 How do we figure this out?

00:08:41.520 Well, we've made everything except the system we control illegal.

00:08:44.220 And so now you have to go into this.

00:08:46.620 And by the way, we've made like acquiring loans through this.

00:08:50.240 You can't discharge them.

00:08:51.780 They're required.

00:08:52.920 There is a constant inflation of the value of these things.

00:08:56.420 So we're going to force you to pay us egregious amounts of money to get indoctrinated into the things we believe.

00:09:04.220 And this is the only way employers can know if you're halfway competent, because we've made all the other parts of this illegal.

00:09:10.060 Oh, and by the way, conservatives won't want to talk about any of that stuff, because like talking about the distribution of how those tests fall out is also taboo.

00:09:17.980 And so just it's just this beautiful, like ironclad system, almost of like how to make sure that everything has to go through kind of kind of our patronage network, reinforce our ideology and all of those things.

00:09:30.760 But yeah, I think you're right that a lot of conservatives don't think about the choice that's been put before, you know, kids at this point.

00:09:39.100 And yes, finally, the Republican Party has suddenly decided that it's a working class party.

00:09:44.400 And that's a good development, I suppose.

00:09:46.200 Overall, I'm glad that they've made that choice.

00:09:48.880 But you're right to say that these pathways have been completely broken down.

00:09:52.600 Basically, kind of the random piece of advice that everyone gives is like go into the trades and eventually start your own business.

00:09:58.260 And that is a decent piece of advice for a certain amount of people like that.

00:10:02.480 That is kind of the best way to avoid college while also becoming a small business owner for many people.

00:10:08.300 But not everyone's going to be a plumber.

00:10:09.960 Not everyone's going to go into the trades.

00:10:12.120 And so you have to have a realistic understanding of where the majority of the population is going to be entering into the workforce.

00:10:20.280 And when your only plan is like, well, I hope you become a plumber instead of working, you know, an office job or having anything inside the information economy.

00:10:29.900 That's just ceding a massive amount of ground to your enemy.

00:10:34.460 Yeah, well, I think I would maybe rephrase one of the things you said, right?

00:10:37.780 It's not just that, you know, not everyone is going to go into the trades or, as you said, not everyone's going to become a plumber.

00:10:43.420 That's true.

00:10:44.100 But that's sort of the background.

00:10:45.900 We have invested trillions and trillions of dollars and, you know, I don't know how many, you know, lines of regulation and law in making sure that the college route is the heavily subsidized and preferred route.

00:11:01.840 And we've been doing that since the Great Society, right?

00:11:04.140 So when you say like, oh, you know, not everyone's going to be a plumber, that's true.

00:11:07.900 But it's also true that our entire, you know, policy choices and the entire government apparatus, and that's before we even touch culture, right, and cultural norms, is designed to create more college graduates.

00:11:20.900 I mean, Obama used to say on the stump that he wanted every American to have a college degree by 2020, okay?

00:11:26.520 So there is this 60 or 70-year project really since LBJ to make college indispensable, make it just an extension of K-12, right?

00:11:37.560 And then one other point I want to make because only because I think this is something that a lot of people just don't know because it's so absurd that I think their common sense is kicking in.

00:11:47.800 And they're like, oh, no, that can't be the case.

00:11:49.460 They think these loans are held by banks.

00:11:52.580 You are the bank, right?

00:11:54.760 The federal government owns 93% of these loans.

00:11:57.960 And when they default, as about half of them were projected to by 2023 before the pandemic, right?

00:12:04.240 We just started repayment.

00:12:05.840 We don't know what's going to happen.

00:12:07.120 But in 2019, the projection was that nearly half of these student loans would be in default by 2023.

00:12:13.560 So if we do nothing, there will be a functional bailout, right?

00:12:17.280 And it will come from the taxpayer because the Department of Ed holds these loans.

00:12:21.140 You hold them.

00:12:21.760 And the same thing applies, for example, to discharging loans through bankruptcy, right?

00:12:25.900 If we make bankruptcy easier for student loans, guess who's the creditor sitting at the other side of the table who's going to get screwed in bankruptcy?

00:12:32.460 It's you.

00:12:33.400 So we're going to have a taxpayer bailout by a different name if we essentially do nothing.

00:12:38.980 So that's the baseline right now.

00:12:42.040 And so I have found that even people who are really smart and involved in politics don't understand this.

00:12:50.260 It's a fairly recent phenomenon.

00:12:51.840 There used to be a kind of Fannie and Freddie style half-private situation where there were private banks making these loans, but the federal government was securitizing them or acting as guarantor, which is an implied bailout, right?

00:13:03.400 But under the Obama administration, these loans were effectively nationalized.

00:13:07.420 So when you're dealing with a company like Navient or whatever, that is just a contractor for the federal government that's dealing with the administrative process of the loans.

00:13:16.780 The burden is already on the taxpayers.

00:13:19.640 We as taxpayers have extended all of these loans.

00:13:22.420 And it's easy to see why, right?

00:13:24.640 It's connected to the college cost problem because Wells Fargo, right, is not going to be making these loans of, let's say, endlessly, let's say $120,000 to every 18-year-old who graduates from high school without doing an evaluation.

00:13:39.520 Is the school degree worth this kind of money?

00:13:42.600 What's the average, you know, salary of a graduate in that particular program, right?

00:13:46.700 These are things that a bank would do before looking at, you know, even thinking about giving an 18-year-old that kind of money and that kind of loan.

00:13:55.880 Well, the federal government's not going to do that, right?

00:13:58.140 The federal government has made this decision that this is, quote, unquote, good debt.

00:14:01.300 It's responsible debt.

00:14:03.020 And it's just going to put that blank check in front of every high school graduate in America because it's good to go to college, right?

00:14:09.880 And so there's no financial evaluation.

00:14:12.220 And so, like, you can see how I think in any other context we would call this very obviously identified as predatory lending, right, where the universities get to send, like, glossy emails with those, you know, perfectly diverse photos where, like, there's a kid in a wheelchair and a Hispanic kid, an Asian kid, a black, you know, you know what I'm talking about, right?

00:14:32.560 Burger King Kids Club, yeah.

00:14:33.740 Right, right.

00:14:34.900 They send those glossy emails.

00:14:36.460 They advertise trips abroad.

00:14:38.180 They advertise their rock climbing walls and lazy rivers.

00:14:40.840 They advertise how much fun it is to be on campus for four years.

00:14:44.740 And in the meantime, the federal government is coming in and giving every 18-year-old this essentially blank check.

00:14:50.880 And universities can keep raising their prices over and over and over again because the feds keep granting a bigger and bigger check to every kid who graduates high school.

00:14:59.000 So you can see it's like a sort of predatory scheme.

00:15:01.100 The universities have, they have the incentive to admit as many people as possible, even if they're totally academically unqualified, which is why there's only a 60% graduation rate from four-year universities, but the six-year graduation rate is only 60%, right?

00:15:17.120 So not just people who finish in four years, but people who finish in six years, it's just over half, right?

00:15:22.080 Because they have that incentive to keep pulling in anyone who comes with that federal check.

00:15:28.020 And all of this has benefited for decades, has benefited universities.

00:15:32.980 But it screwed everyone else.

00:15:34.620 It screws the taxpayer who's now on the hook for these loans that are vastly disproportionate and can't be paid back based on the value of the degree, right?

00:15:41.980 It screws the students who are now under this amount of debt for life.

00:15:46.880 And there is a lot of evidence that people are delaying, for example, purchasing houses.

00:15:50.980 You know, I find the marriage thing a little bit of a stretch.

00:15:55.240 But certainly taking on other kinds of debt, like cars and houses.

00:16:00.880 So, you know, students are struggling under this level of debt.

00:16:05.020 Taxpayers are financing that level of debt.

00:16:08.220 Universities get their paycheck free and clear.

00:16:11.200 That's the system, the way the system's set up.

00:16:13.120 It's a grant to universities.

00:16:15.000 Yeah, we need to re-stigmatize usury, which is exactly what this is.

00:16:21.140 And it should be recognized as a program that is incredibly predatory.

00:16:26.940 And I hear what you're saying about, you know, but I do, from my own personal experience, from looking at, you know, people in my life, this really does keep them from family formation.

00:16:37.420 It really does keep them from moving into this, which, I mean, honestly, is a boon for the left, of course, because that's a great predictor of support for them, you know, is, you know, halting kind of adulthood is a great way to ensure that this creates a kind of a lifelong voter out of these people who are going to college and going deeply into debt and never, you know, forming families, getting houses, those kind of things.

00:17:03.680 So it's kind of wins for them all around.

00:17:06.420 But if we understand, obviously, that this is a problem, I think the answer for most conservatives and the right to be worried about this is, well, any kind of bailout is just going to be, you know, a paycheck for leftist supporters, right?

00:17:22.120 It's just, you're just going to be cutting all of these people, you know, free checks, basically.

00:17:27.000 You're just going to be paying them off.

00:17:28.620 It's going to be a bunch of people who are far more likely to vote left.

00:17:31.520 So why would I ever bail these people out?

00:17:33.200 Why would I ever, you know, address this problem?

00:17:36.420 Because these people are inevitably just going to be far more left wing.

00:17:40.200 And this is just a wealth transfer to a bunch of progressive ideologues.

00:17:45.120 You've already addressed in some ways that this is going to be a bailout no matter what.

00:17:48.940 So it has to be addressed.

00:17:49.840 But what would you say to people who are like, no matter what we do, this is always just going to be a freebie to leftists?

00:17:55.000 Yeah, so I think it's basically what you anticipated, which is the fact that this is going to happen if we do nothing, right?

00:18:04.640 You're exactly right that this is, you know, and I've written myself that this is a handout to Democratic constituencies.

00:18:10.780 Despite some accounts, Biden's forgiveness plan, half the people who worked in his White House qualified for his forgiveness plan, right?

00:18:19.880 So that's how close the nexus is between like bailing out essentially the professional managerial class who's really taking on an enormous amount of debt, but then having higher salaries.

00:18:30.920 There are people who are in like a much more legitimately struggling situation with this.

00:18:36.760 So I mentioned the 60% graduation rate, the worst possible situation that you can be in, right, is that you have, let's say, the debt of two or three years of university and then you drop out and you don't have that college degree.

00:18:49.840 That's the worst possible situation.

00:18:51.480 That's where a lot of these defaults are coming from.

00:18:54.400 But generally, right, yes, I agree.

00:18:56.380 This is sort of a grant to leftist constituencies.

00:18:58.560 Why would we do this?

00:19:00.860 And to me, it all comes down to who pays.

00:19:03.540 So if we do nothing, we will pay.

00:19:05.900 We, the taxpayer, and the majority of people who did not get a college degree and all the people who ate ramen for 20 years to pay off their student loans, they're all going to pay if we do nothing.

00:19:18.480 And I explained why, just because we already hold these loans and these loans are going to go into default, but also politically, because it continues to be a really salient issue for Democrats.

00:19:27.400 There is a lot of evidence that the Democrat bump from young people in the midterms came from the announcement of that Biden forgiveness plan.

00:19:36.820 It gets young people to the polls because it is an issue that impacts their pocketbook, right?

00:19:42.020 So this is a huge political boon for Democrats.

00:19:46.780 I think then the issue is who's going to pay for it and who's going to get the political benefit for solving this problem.

00:19:53.620 I think the universities should pay for it.

00:19:57.160 And that's the proposal that I've written is essentially, yes, if this is going to be a bailout to Democratic constituencies, let's take it from the other Democratic constituencies, the universities that have benefited from this system that we've been talking about for the last, you know, 15 minutes, right?

00:20:11.120 When does fast grocery delivery through Instacart matter most?

00:20:15.760 When your famous grainy mustard potato salad isn't so famous without the grainy mustard.

00:20:20.620 When the barbecue's lit, but there's nothing to grill.

00:20:23.280 When the in-laws decide that, actually, they will stay for dinner.

00:20:27.020 Instacart has all your groceries covered this summer.

00:20:29.620 So download the app and get delivery in as fast as 60 minutes.

00:20:33.220 Plus, enjoy $0 delivery fees on your first three orders.

00:20:36.900 Service fees exclusions and terms apply.

00:20:38.760 Buy Instacart, groceries that over-deliver.

00:20:42.680 The system that has pumped trillions of dollars and forced people into this pipeline that is ideologically controlled by the left, and by the way, has produced enormous benefits for universities.

00:20:54.760 So there's been something like 21 million square feet of new construction in universities.

00:20:59.700 The vast majority of it in the last couple of decades is not classroom use, meaning it's rock climbing walls.

00:21:04.880 Like I said, it's gyms.

00:21:06.160 It's ways to advertise to those 18-year-olds.

00:21:08.580 They're in, like, sort of an amenities race.

00:21:10.940 It's fancy dorms, et cetera, et cetera, right?

00:21:13.680 So, you know, and universities have also used a lot of that money to expand their administrative roles.

00:21:20.860 Speaking of patronage, right, the entire DEI departments, the fact that they can hire, you know, 40 people for a small university, right, to run their DEI department all at six-figure salaries.

00:21:31.960 A lot of that comes from essentially wealth transfer from the federal government.

00:21:35.760 That's the system that we live in under now.

00:21:39.080 So I think it's just, even living aside politics, right, that the beneficiaries of this system for decades will pay the bill when it comes due.

00:21:49.640 But there's an additional point here that I think is really important.

00:21:53.080 If we go with the Biden plan, you know, that was struck down by the Supreme Court for separation of powers reasons, let's say that Democrats passed that plan through Congress.

00:22:03.100 If we go with that plan in four years, the level of debt will be exactly the same as if we had never done it, right?

00:22:10.280 This is a continuing rollover problem because the universities are able to raise tuition so far above inflation because all that free federal money is available.

00:22:21.380 So think of it this way, right?

00:22:23.240 The federal government says that they're going to loan students, you know, $1,000 to go to college, right?

00:22:28.700 The universities know that most people have a little something saved up for college.

00:22:32.080 So now tuition used to be $1,000, which is why the federal government made it that.

00:22:36.280 But then now it's $1,100, right, because everybody's got $100 extra to throw in.

00:22:41.640 And you can see how at escalating scale, you end up with this runaway cost problem that we've all seen, right, that's pressing on the middle class where the cost of university is just completely wild compared to even 20 years ago.

00:22:55.220 I think it's public universities have doubled over the last 25 years and private universities have tripled their costs in real dollars, right?

00:23:03.620 So you're talking about in the span of a couple of decades.

00:23:07.100 So that's what's enabled all of that.

00:23:09.300 All of that cash fuel has gone into universities, right?

00:23:12.600 And now they want to dump the bailout on the taxpayer when they've already been the recipient of all of these trillions of dollars.

00:23:21.320 And by the way, Harvard and Yale have endowments that make them, you know, somewhere in the middle of the pack of the top 10 hedge funds in the United States, right?

00:23:28.860 So they're sitting on all this money that they've gotten very much not through the operation of the free market, but through essentially wealth transfers from the federal government.

00:23:40.140 And bailing this bailout will only make that cycle worse, right?

00:23:44.760 Because then the expectation will be there'll be another bailout and another bailout and another bailout.

00:23:48.840 And so what I've proposed is tying, essentially making the universities responsible going forward.

00:23:55.200 So using this to raise a tax on endowments and university property, which they're huge landowners, right?

00:24:02.440 On property tax and endowments to raise a pool that will pay for student loan forgiveness for the most struggling borrowers.

00:24:11.600 And we can define that however we'd like.

00:24:13.900 I mean, I think the Biden plan actually is not a terrible one in terms of the payout output, right?

00:24:19.720 You fund a pool based on taxing universities and taking some of that wealth from them.

00:24:25.200 And going forward, they know that if the student loan crisis becomes bad again, they're the ones funding the pool, not the taxpayers.

00:24:33.700 It's connected.

00:24:34.420 And so it creates an incentive going forward for them to actually admit people who are academically prepared, to actually hold down their costs insofar as they're able to do that, and not just to continually raise prices.

00:24:46.300 Because they know if the student loan debt crisis becomes a crisis again, that they're the ones who are going to be on the hook for the bailout.

00:24:53.800 Because right now, the assumption is that we're going to pay.

00:24:58.700 So I think that's a really good incentive structure.

00:25:02.200 You've got to have something that, like you said, is long term going to put a halt to this.

00:25:07.740 And it's going to get these people to think about the way that they're implementing their scaling costs.

00:25:14.860 But I guess the question is, is there any appetite for this among the actual Republican Party, right?

00:25:21.280 Like Will Chamberlain has been saying seize the endowments for a long time now.

00:25:25.640 But is there anyone in Congress, is there anyone who is listening to this?

00:25:32.740 Yeah, Republicans here are raised taxes, and I'm sure somewhere their spirit leaves their body.

00:25:39.320 But is there anyone who's actually thinking about how to implement this, about passing this kind of legislation?

00:25:44.540 So two things.

00:25:46.860 One, yes, all the usual suspects might be interested, right?

00:25:50.680 The sort of populist Republicans who are, let's say, are not going to immediately run for the hills when they hear a tax hike.

00:25:59.180 But this is actually, there is precedent to doing this.

00:26:01.940 There is a tiny, in the Trump tax cuts, right?

00:26:04.600 There actually was a tax hike on university endowments.

00:26:07.600 Now it's like 1.7%, right?

00:26:09.940 So it's minuscule, but it exists.

00:26:12.260 It's on the books.

00:26:13.260 And one of the things I propose is essentially to raise that tax the same level as any other hedge fund.

00:26:20.040 So, and there's a lot of like, and I'm sure there's a lot of work also for, I'm not a tax expert, but I've proposed a few in this white paper that's available over at IWF.org.

00:26:32.380 It's under the heading Taxing Universities.

00:26:35.060 I've proposed a few other things.

00:26:36.620 There's money for states in property taxes, right?

00:26:38.840 The University of California is the largest landowner in the state.

00:26:42.760 And that's true in a lot of states where the largest landowner is the university pool.

00:26:47.200 So I think there's a variety of ways to do this.

00:26:52.320 I think there's some interest in doing it.

00:26:54.020 A small version of it has already passed over the squeals of lobbyists from universities.

00:26:59.680 And furthermore, I think there is some interest in doing this simply because there are even, I've been surprised and I can't, you know, obviously I'm not going to reveal names or whatever.

00:27:08.360 But I've had some interest from some like quite moderate, quite moderate Republicans because I think they recognize this is politically going to happen one way or the other.

00:27:18.460 And they'd like to have some control over it and they'd like to not burn a giant hole in the federal budget.

00:27:23.000 So one of the sort of travesties of all of this is that in the scoring in the federal budget, these loans are actually ranked as assets for the government.

00:27:34.200 It's very much like the subprime mortgage crisis, right?

00:27:37.220 These loans are bundled and they're in the quote unquote black because people assume that there are going to be payments made on them that are just not going to be made.

00:27:45.140 By any like any sober headed analysis, these payments are not going to be made.

00:27:50.320 And so part of the problem is on the federal budget, that quote unquote money, right, is paying for Obamacare.

00:27:56.180 So I think there are some more moderate or more like Reaganite, you know, sort of 80s style Republicans who realize that this is a financial gimmick, that this is going to be a problem for the budgeting.

00:28:11.820 It's going to be a problem for the deficit and the debt and everything else.

00:28:15.140 And so some of those deficit hawks actually might be interested in this kind of proposal if they can wrap their mind around the idea of actually taxing, you know, institutions that have been essentially have treated them and people who think like them as enemies for the last 70 years.

00:28:32.220 Right. People on the right have been complaining about universities being left leaning since William F. Buckley wrote Gone in Man of Yale 70, 70 years ago.

00:28:39.600 And it's obviously only gotten worse since then.

00:28:41.820 And what's happened since then is we've allowed essentially the Democrats and the left to build an enormous, enormous subsidization like network to make universities incredibly powerful, both financially and also just as a matter of ideology.

00:29:00.600 You know, this is a policy choice.

00:29:03.700 There used to be more of a varied elite in this country.

00:29:06.340 It didn't used to be that the elite went through the same 10 schools.

00:29:09.720 It used to be that there was a more of a regional elite.

00:29:12.780 You'd get, you know, like you'd get get scions of various different kinds of industries from different states, different cities.

00:29:19.880 Right. It wasn't so uniformly there wasn't they might have had sort of class interests in terms of of taxes or something direct on their business.

00:29:27.400 But you don't see this kind of cultural lockstep that we see now.

00:29:31.240 And a lot of that has to do with the fact that, you know, in order to get into the American elite, you have to go to the same handful of universities that are teaching the same handful of things that are super, super far left.

00:29:42.100 That's not a natural situation.

00:29:44.280 That's a situation we've created through law and and through policy choices.

00:29:48.820 And those policy choices can be undone.

00:29:52.360 And that's what I'm proposing is essentially take a step back.

00:29:55.760 Look at this.

00:29:56.240 This is not a free market.

00:29:57.700 It'll be like talk directly to the free market side.

00:29:59.640 I consider myself a free marketer.

00:30:01.160 This is not the free market.

00:30:02.700 It hasn't been for 70 years.

00:30:04.960 You're talking about something that's that is closer to a utility already in terms of of the relationship between the government and the product.

00:30:14.900 And what I'm suggesting is, you know, you want to you want to live by the sword.

00:30:19.340 You're going to die by the sword.

00:30:20.260 You want to be heavily subsidized and heavily regulated by the government and make your product practically mandatory for every 18 year old graduate in America.

00:30:28.720 Well, then you're going to have to pay for the consequences of your essentially malfeasance of raising raising tuition well beyond what the average middle class family can pay and dumping debt onto people that has no relationship to the value of the degree that you're offering.

00:30:44.320 You don't get it both ways.

00:30:45.660 You don't get to cry free market when I'm interested in in, you know, levying a tax for the problem that you've created and then at the same time turn around and take massive subsidies in the form of federally backed student loans and then just straight up grants from the feds.

00:30:59.620 You don't get to play both sides of that fence.

00:31:02.240 Yeah, but that game has worked so well for the left on on multiple fronts, right?

00:31:05.960 Like this is basically true of corporations and most of the kind of monolithic organizations that that our managerial class kind of occupy.

00:31:15.340 This is this is the game that's played so often that that kind of keeps conservatives at bay.

00:31:20.180 And let's be honest, you know, conservatives have willingly bought into this.

00:31:23.980 Like you said, they've been complaining about the university for over 70 years.

00:31:27.400 But, you know, they really liked watching the sports team.

00:31:31.140 And so they'll still send their money and their kids this stuff, you know, kind of over and over.

00:31:34.900 It always amazes me the number of conservatives who are still making writing big checks to their alma maters.

00:31:42.060 That's still very much a thing.

00:31:44.080 Right.

00:31:44.600 There are people writing checks to Harvard and Yale, even though they're very rich people.

00:31:50.400 Right.

00:31:51.280 They're donating, let's say, you know, one hundred thousand dollars to some Republican candidate.

00:31:57.080 And then they'll turn around and donate a million dollars to their university to put their name on the wall.

00:32:01.860 And I'm like, how do you not understand that these two entities are at war with each other?

00:32:05.980 Right.

00:32:07.340 And because they're not really at war with each other.

00:32:09.540 That's kind of the problem.

00:32:10.320 But sorry.

00:32:10.820 Well, I mean, let's say forget about the particular candidate.

00:32:12.860 I'm just saying these are people with conservative values who probably agree with a ton of what we've said on this program.

00:32:19.000 But they they still have that connection to the university that they went through.

00:32:24.760 And I understand, you know, it's it is like in some way it is part of civic society.

00:32:28.700 These kinds of, you know, sort of civic functions that the Friday night football game is a real American function that brings towns together, that brings people together.

00:32:37.480 And universities did did serve that purpose.

00:32:40.320 But right now they are and have been for a long time, incredibly aggressive political actors that are opposed to everything that you hold dear.

00:32:48.560 And I don't that that that deep understanding really has to I guess the friend enemy distinction really has to sink in, I think, not just for Republicans who are elected, who they have their own incentives, as you point out.

00:33:01.420 But but but also for conservatives who simply are living in a time where universities, they might have been left wing and they might have had a few crazy professors.

00:33:10.620 Right. But they weren't this like essentially ideologically credentialing.

00:33:14.100 They're credentialing political officers.

00:33:16.700 They're graduating an army of H.R. officers to get you fired. 0.98

00:33:20.240 There is no reason that you should you or a taxpayer's money should be supporting these ideological entities that are your enemies in the political battle.

00:33:30.000 It is politically suicidal for Republicans to continue to, you know, green light trillions of dollars in loans to these universities.

00:33:38.900 And if they are going to green light those loans, then for sure we have the right to claw back some of to use the left's favorite, you know, phrasing, right, to claw back some some of that are fair share of that public money so that when their graduates need to be bailed out, it doesn't come from a mechanic in Ohio.

00:33:57.280 It comes from Harvard and Yale.

00:33:59.380 Do you think that there's any chance of shaming the left into adopting some of this?

00:34:04.380 You know, obviously, they're going to recognize that this is an attack on, you know, on their patronage system, I think, be decent amount.

00:34:12.080 But you feel like the argument is compelling enough.

00:34:14.760 You're like, OK, you guys want to do student loans forgiveness.

00:34:18.100 We here's the way it gets done.

00:34:19.900 I mean, do you think you can actually get them to fall for this?

00:34:22.000 Because you're going to need to for this to actually pass through.

00:34:25.580 So I don't think it's completely impossible.

00:34:28.460 Also, this kind of tax is probably part of a larger budget negotiation.

00:34:32.800 Right.

00:34:33.320 Right. So it's not going to be negotiated in isolation.

00:34:37.440 I think there are to the extent that there is like sort of populism on the left.

00:34:44.000 Bernie would never go for this, but some of his supporters might.

00:34:48.640 I think actually on the local level, there's quite a bit of tension in the Democratic coalition about universities.

00:34:55.860 If you look at nearly every university town, there is kind of a war between the university and the municipality exactly because they displace the tax base.

00:35:04.600 Right. So if you want money for social programs or even legitimate functions of municipal government.

00:35:10.420 Right. The universities displace the tax base.

00:35:13.320 And some of them pay a sort of pittance voluntarily into the city fisk.

00:35:17.240 But it's nowhere near what the city would have gotten if that university space was instead, for example, businesses or homes or whatever else.

00:35:24.040 Right. And so universities have had this major carve out from virtually all important taxes because they're, quote unquote, nonprofit.

00:35:32.420 It's really hard to make the argument that you're a nonprofit when you have fifty one trillion dollars.

00:35:39.100 Sorry, fifty one billion. That'd be a lot. Fifty one billion dollars in your in your endowment.

00:35:45.000 Right. It's really hard to make the argument.

00:35:47.500 I think that you are a. Let me let me rephrase that argument rests on the idea that universities are contributing to the public good in some way.

00:35:59.640 Right. If we boil this down to the simplest argument for all of these subsidies and all of this special treatment that universities have gotten from the tax code or in a thousand other ways from the federal government in terms of subsidies and everything else.

00:36:12.660 There's really two two basic promises that make that make sense. Right.

00:36:19.400 One is you're going to make us richer. Right. That that your graduates are going to be making more money and they're they're going to be starting businesses and they're going to be you know, they're going to be raising the GDP. Right.

00:36:30.140 Right. That's still true, but it's much less true than it was in 1970.

00:36:35.480 In other words, the marginal value of getting a degree comparatively over the lifetime of earnings to the cost has basically flatlined for a bachelor's degree and hasn't really improved since the 1970s, as well as everything else has gone up.

00:36:48.640 Right. So that that proposition, the financial one, is much more tenuous than it once was.

00:36:54.340 But the second proposition is more intrinsic. Right. And it goes that the heart of that public good, that it is good for people to be educated.

00:37:01.860 It is good for especially a country like America. You know, Thomas Jefferson famously, you know, made this argument about universal K-12 education.

00:37:10.820 Right. That it was necessary for some kind of universal public education in in a republic there.

00:37:17.160 There's the liberal arts tradition. There's the Western canon. These are intrinsically good things.

00:37:22.340 Well, I mean, you know, you're over there like, you know, laughing. Right.

00:37:26.480 The idea that universities are producing, you know, wiser citizens who understand the burdens of being citizens in the American republic and understand the Constitution is completely laughable.

00:37:36.860 They're doing the opposite. So I think on either either one of these bases, universities have essentially violated whatever promise they ever had to be working in favor of the public good.

00:37:47.620 And this may sound like, you know, something that you or I, Oren, would talk about. Right.

00:37:52.700 The sort of the real right wing or right flank of the American political discussion.

00:37:58.220 But it really isn't because the majority of Americans say that that universities are net negative on the country.

00:38:05.460 The majority, the majority, and that includes a lot of independents so that people realize that the deal these universities are offering is not a good one.

00:38:15.180 It's part of the reason that a lot of parents of Gen Zers are reconsidering the college track.

00:38:19.800 Right. Seeing what had happened to our generation, to the millennials and getting, you know, squashed under this level of debt.

00:38:25.220 Look, I think they've essentially broken to the extent that they ever followed those promises.

00:38:31.580 They've completely broken them now. And there's no justification political or like straight policy wise or morally for us to continue to shovel trillions of dollars to these institutions.

00:38:42.940 It makes no sense. And it's particularly suicidal if you're a conservative.

00:38:46.640 Yeah, I think that case is well made. And like I said, I think this is really important because, again, this should be a winning issue, I think, for conservatives.

00:38:56.720 This should be something you can steal the thunder out from from under these people. 0.72

00:39:00.700 You can kind of take the wind out of their sails rather than just having the, you know, very reactionary.

00:39:06.500 Well, you know, I oppose this because the left, you know, supports this understanding to, you know, use a little judo here, take the momentum and push it a different direction.

00:39:15.760 And I think the, you know, the way that you're laying out about kind of how this would get done should alleviate most of the concerns people have and the necessity of it because the bailout is going to come way or another.

00:39:27.320 I think all of that makes sense for a lot of people. So, you know, hopefully there's there's some movement there.

00:39:32.900 But while I have you, I want to pick your brain on something here.

00:39:36.660 I think one of the biggest problems, obviously, with with this is not just like a lot of people understand that college degrees at this point.

00:39:45.760 Don't really give you a particularly good education or particularly valuable skill set.

00:39:51.680 I mean, if you want to be a doctor or an engineer, great.

00:39:53.780 But I think a lot of people understand that you probably don't need to get a degree to become a grocery store manager or something, even though that's now become the necessity.

00:40:03.040 But the real issue is status, right?

00:40:05.100 That's really what we're talking about.

00:40:06.780 Most people want to go to college.

00:40:09.060 Most parents want their kids to go to college because that confers a level of legitimacy.

00:40:15.420 It says you belong to a certain socioeconomic class.

00:40:18.720 It says that, you know, you have something that makes you valuable.

00:40:23.920 Now, we've kind of talked about how it's unnatural for everyone to go to the same 10 schools and for the leadership class to come from this.

00:40:32.060 But I don't know, because, you know, in some ways, I think this is part of a civilizational cycle.

00:40:38.120 You know, we get to the point where civilizational complexity draws.

00:40:43.960 You know, basically you have this IQ shredder phenomenon where like all of these institutions hoover up everybody of a certain intelligence or promise out of the hinterlands and pull them into these urban centers.

00:40:57.040 And that becomes, you know, the status signifier, you hollow out the leadership class from from localities and regionalities and you draw it all into a few places inside the empire.

00:41:07.640 I think that's a repeatable phenomenon.

00:41:10.660 And I just wonder, I think, you know, at some point, maybe it's a failure of conservatives or the right to imagine a different type of status to to to to confer a way to confer elite status onto their own people or to give cultural weight to their own people.

00:41:25.960 But on the other hand, I think there is a real mechanical problem at like scale of civilization that you're dealing with.

00:41:34.120 And I wonder if that's something that we can actually address in a meaningful way without really, you know, having to see something like basically if if this car has to run into a hard wall before, you know, anyone goes a different direction with like how we allocate that status and that understanding of power inside in the country.

00:41:55.060 So I think Spencer Clavin has a great article at The American Mind about this where he talks about, I think, status is somewhat misleading.

00:42:04.260 It's honors, right?

00:42:05.700 That the traditional like the sort of ancient way we would talk about this is honors.

00:42:10.720 What honors are bestowed on whom for what reason in a civilization is obviously important, always has been equally important, even as something like, for example, money.

00:42:20.040 Right. That now in a modern capitalist economy, they tend to go together, but not always.

00:42:25.720 Right. Think about, you know, the honors of being like there are all kinds of high, highly honored positions that are not particularly well paid and teaching is one of them.

00:42:35.560 Right. So I think that's that's the more precise word.

00:42:39.740 Look, the real benefit of going to Yale is that it's a bunch of already for the most part, statistically, already wealthy people's kids who are smart in a room together who are going to go on to do great things.

00:42:54.920 And it's really essentially a networking retreat for four years.

00:42:57.600 Right. Right.

00:42:59.320 There is no earthly reason for the taxpayer to subsidize that.

00:43:05.900 Is what I would say. Right.

00:43:08.100 If that's exactly what I agree with you, I think that's largely what elite colleges are.

00:43:12.420 These like essentially elite networking grooming for success and being around even being around these these other folks who have these same intelligence markers and same financial background.

00:43:24.940 Which, by the way, you know, the sensible reason for turning on the spigot during the great society to universities and to fund student loans was that, you know, bright kids from poor families should, of course, have the opportunity to go to the elite universities alongside the kids of the wealthy who if they qualify and they're smart enough and hardworking enough to do so.

00:43:48.760 So that was the basis on which LBJ sold this massive government sort of subsidy to through loans to universities.

00:43:58.200 Right. Today versus when the great society programs first started passing, there's a smaller percentage of kids on campus who come from the lower half of the income spectrum than there was in 1970.

00:44:11.580 So it's it's done the exact opposite.

00:44:14.360 What it's done is escalated the cost to such a degree that the bright kids from poor families, particularly if they're white, as you well know, they don't get the boost of the diversity boost right in affirmative action.

00:44:28.200 And it's locked them out of university entirely because the cost is just now so astronomical and the debt you have to take on is so astronomical that you essentially have to be in the middle class or really the upper middle class to be able to even, you know, conceivably pay off that kind of debt.

00:44:45.540 And so what it's done is it's locked bright poor kids out of university.

00:44:49.500 So the exact opposite of what they intended.

00:44:51.820 But again, I will return to the idea if we all acknowledge that these are, you know, elite networking events like I feel about paying for that the exact same way as I feel about, you know, the paying for Google buses.

00:45:07.080 Right. There's distinction or what is it vibe camp?

00:45:10.600 Yeah, I mean, again, again, I'm totally with you, like, obviously, like that you're preaching to the choir on the necessity of stripping this stuff out.

00:45:18.360 I guess what I'm what I'm asking is, can't do you think that the right has a way to envision an alternative, you know, beyond like, obviously, we don't want to fund our enemies like there's a way because what you talked about was like the loss of regionality, right?

00:45:34.940 Like the the unnatural situation there. And I guess I'm just wondering, like, is it possible for there to be a devolution of this, you know, way in which we we layer honors on on our citizens?

00:45:50.140 Like, is there a way to return this to a place where, you know, not just the money flowing in, but but because let's be honest, the money is going to continue to flow in as long as every red state parent knows that their kids only going to look like a aristocrat if they can get them into a blue universe. 0.54

00:46:13.020 Right. Like that, like, like, like, you're not going to be able to make the case, I think, for a lot of people at the end of the day, we strip this money out, if they still think that that's the institution they've got to get their kid into, for them to look like they are someone of, you know, status or renown or honor.

00:46:30.700 So a few answers there. And this is this is really, in many ways, the heart of the problem, right?

00:46:38.780 One, I do think, and this is sort of the black pilled answer, I do think that we have to make the shift from political opposition to political dissident and understand that actually conservative, your your kids will be locked out of certain things unless they're willing to mouth the, you know, the shibboleths of the regime, unless they're willing to participate in that ideological

00:47:00.400 regime, they will be locked out of certain halls of power. It's a reality. Now, I hope that's not the reality forever. And I realize that it's like, that's a hard thing to accept. But I do think that, so that's my background, you know, sort of assumption in going in to talk about this.

00:47:15.560 Now, what you're really talking about, and here I'm completely speculating when it comes to like sort of university policy, I have precise goals, and I've done, you know, whatever, 10 years, I'm now flaunting my the expert credentials, right?

00:47:27.160 I've done more than a decade of sort of policy work and reading this legislation. So I feel very confident in saying, you know, what we should do with regard to student loans, for example, or, but this is a different question. This is really a civilization level question, or at least a regime one.

00:47:43.720 I think the answer has to do somewhat with recognizing what our economy actually produces, and recognizing how much of our actual GDP is, you know, BS, right? And this is connected to the whole like, Elon Musk, we talked about last time I was on, you know, Elon Musk cutting 70% of the jobs at Twitter and still being able to run the company.

00:48:10.760 Well, what is what is what is all of that fluff that he was cutting? What's all that fat? It's highly credentialed people who essentially have email jobs, at best, they they do nothing, and they don't add anything to the bottom line of the company. And at worst, they're sort of the ideological enforcement arm of within the private sector.

00:48:29.520 And so I think part of the shift, if the conservative idea or the right wing sort of vision for returning America to more secure footing in terms of a nation itself, I think there's an understanding that we have to return to making things.

00:48:47.180 And I think an economy that produces things with a hard goal, where it is harder to fudge, it's not so heavily dependent on the PMC class, it's not so heavily dependent, obviously, there's going to be administrators and, and office workers and so on. But but underlying this is a shift in the economy from making and producing real things of value.

00:49:11.760 And I'm not saying that it has to be even manufacturing, right, there has to be a product at the end of the day, to this sort of decadent economy, where the the wheels of bureaucracy themselves eat up so much of essentially the GDP, and they're not really producing anything other than ideological compliance.

00:49:35.760 Right. So I think the question you're asking is quite deep. In other words, how do we get from a society where, because we are so wealthy, we can afford to essentially lay honors on people, for no other reason, other than they're probably smarter than average. And they say the right things that the regime likes, that, you know, America is a rich country, and we can do that for a long time.

00:50:03.000 But at the end of the day, we're going to find out that we're not producing real wealth underlying all of this fluff that's on top of it. And I think there is going to be somewhat of a reckoning, whether that comes in the form of, you know, a war where we can't produce, you know, we're no longer the arsenal of democracy that we were in World War Two, right?

00:50:22.940 Detroit is a crater in the ground. But in 1943, it outproduced the country of Italy, just one city, right? We're going to have to fuel at some point, we are going to slam into the reality of that.

00:50:37.740 And I think this has to do a lot with that, that problem is the fact that we can't afford to keep shoveling, you know, trillions of dollars to universities to graduate people whose only skill is, you know, being marginally intelligent and being able to name all 56 genders.

00:50:56.980 Yeah, I think that's right. All right. So we're going to pivot over here. I got a question or two from the audience. But before we do, where should everybody look for your great work? Do you have anything coming up that people should keep an eye out for?

00:51:10.640 Yeah, I'm really focused on this proposal, just because people are paying their loans now for the first time in three years. So it's going to be back on the table in a real way. So you can find that proposal at taxing universities, which the name is that IWF.org. It's one of our policy focuses, I always want to say foci, but I think it's focuses.

00:51:31.340 But it's a backgrounder. It's only about three pages long and like kind of wide space type, right? It's easy to read. I really want, you know, I want this proposal to circulate, not because my name is on it, but because I think it really could be a way out.

00:51:49.160 Something that is popular that allows Republicans to be granting the jubilee. I mean, debt jubilees are the oldest trick in the populist book, I think. But but really allows Republicans to seize the higher ground here and allows us to drop this this bill where it ought to belong and coincidentally on the doorstep of people who hate us. So what is to dislike about it?

00:52:10.480 Absolutely. Absolutely. All right, guys, make sure that you go ahead and check that out. Let's go over here real quick. So we've got skeptical panda here for $5. I like it as because she knows what part of the movie we're in. Stay based. Absolutely emoji.

00:52:28.360 All right. The emoji of concern is that I can. Yeah, I can't. It's a very ambiguous face. All right. Thanks, man. We appreciate it. All right. Let's see. I think that's everybody there. All right, guys.

00:52:40.240 Well, thank you so much for coming by. And as always, a great time talking to you. Make sure that you're checking out her stuff, guys. And of course, if this is your first time on the channel, please make sure that you go ahead and subscribe. And of course, if you want to get these broadcasts as podcasts, make sure that you subscribe to our Macintoshire show on your favorite podcast platform. I'll see you guys later.

The Auron MacIntyre Show - October 06, 2023

Make the Colleges Pay! ｜ Guest： Inez Stepman ｜ 10⧸6⧸23

Episode Stats

Summary

Transcript