Author Archive

Federal Involvement: Are Good Intentions Good Enough?

A few short lines about the federal government’s involvement in financial situations that perhaps are best left to the private sector. Recent events, such as the Bernie Madoff ponzie scheme, do support the notion that regulation has its role, especially to put limits on those who might choose to commit fraud.

What regulation and limits are placed on decisions made by our elected representatives who also commit fraud? It seems some of this fraud results in the passing of money into the politician’s pocket, and to a large part into influence and what we call the “buying of votes”.

The scheme Richard Bernstein describes in Duped America that formed the basis for the mortgage crisis reads very much like graft, corruption and influence peddling.

The scheme Sterling Edmunds describes in The Federal Octopus, though from the early 1900’s rather than the late 1900’s, reads much the same.

Good intentions are not good enough. The rule of unintended consequences so frequently seems to be overlooked. The ability to deliver meaningful results goes way beyond the desire to do good. And, so often, the desire to do good is usurped by those who seek influence, power and control.

Bernstein suggests intentional deceit – as in the “duping” of America. Edmunds suggests intentional violation of Constitutional limits.

Below are two short stories about the federal government getting involved with your money.

Education and Gainful Employment

Does the federal government have the Constitutional right to discriminate in its support of educational programs?

Whose money is used to support educational programs?

Where does the federal role begin and end as compared to local community and State roles?

Don’t misunderstand, those who express concern about federal involvement in education are not against education; to the contrary, those who express this concern are dedicated to an excellent education for all. Federal interference over the decades has not resulted in educational excellence. And, with what power or special insight does the federal government decide which educational programs are deserving or taxpayer support? Some education is desirable yet may not lead to direct employment.

From the Department of Education web site:
“The Obama Administration released today its proposed regulations requiring for-profit career colleges to better prepare students for “gainful employment” or risk losing access to federal student aid. The proposed rules seek to protect students from taking on unsustainable debt they cannot repay and to protect taxpayers from high loan default rates.”

Interesting to note are two things in this introductory statement: 1) linking student aid with a federal oversight definition of gainful employment, and 2) use of the word “protect” – as in “to protect students” and “to protect taxpayers” – when I hear of federal governmental protections that are ‘extra constitutional” (go beyond that which is provided by the Constitution), I hear that a federal official or agency will decide for me what is in my best interest. Sounds like socialism to me. (Read more from the Dept of Ed web site.)