Symbols

I’m old enough to remember the Broad Street Bullies, the brash and brawling Philadelphia Flyers, led by Bobby Clarke, Dave “the Hammer” Schultz, and Bernie Parent, who unceremoniously shoved my beloved Blackhawks aside and become the first expansion team to win the Stanley Cup.  On their way to NHL glory, the Flyers. Whenever the Flyers needed a big win, they would roll out Kate as their good luck charm to sing "God Bless America."

But now, the social justice warriors, hell  bent on erasing history and anyone that has any taint of racist language usage, no matter how inconsequential, decided that Kate Smith has to go.  Smith's family is understandably quite upset.  

The NY Yankees have also jumped on board and have banned playing Smith’s rendition of God Bless America at Yankee Stadium.  Never mind that the Yankees did not field a black player until 7 years after Jackie Robinson’s debut with the Brooklyn Dodgers.  Elton Howard did not take the field until 1955.  It crossed my mind that if the Yankees were serious about blotting out past discrimination, perhaps they should withdraw the franchise from major league baseball.  Alternatively, if the Yankees wanted to do something positive, they should underwrite the efforts of Jeremy Krock whose Negro Leagues Grave Marker Project (www.nlbgmp.com) identifies and buys headstones for players in the Negro Leagues, to make sure these men are not forgotten.

The complained about song was recorded by Paul Robeson and was recorded by Kate Smith early in her career.  But that doesn’t matter.  We now judge peoples’ actions of 70 years ago by social norms of today.  So just as Laura Ingalls Wilder was removed from the award of childrens’ literature last year, Kate Smith’s voice won’t be heard in Philly or NY anymore and the Flyers have had her statue removed.

It was no little irony that a day or two later, I stopped for a beer at the bar in the train station.  In line in front of me was a fellow with a red t-shirt emblazoned with CCCP on the back in yellow letters and a hammer and sickle emblem in the corner.  I see these symbols with some frequency.  Last year, I saw fur hat with a red star and hammer and sickle button. 

Kate Smith killed no one.  She sang songs.  Laura Ingalls Wilder oppressed no one.  She wrote childrens’ books.  Communist Russia killed millions and was responsible for the suffering of millions more.  It deported hundreds of thousands out of the Baltics and nearly ignited WWIII.  Yet no one flinches at the sight of the hammer and sickle or the image of Che Guevara.  But Kate Smith and Laura Ingalls Wilder must be erased from history.

Collusion Illusion

The final report of the Mueller investigation was released this week with a press conference by Attorney General William  Barr.  It was enormously damaging---but not really to Trump.  It was damaging to our Republic and to the credibility of the Mainstream Media and our security agencies.  The strength of our Republic depends on those three things:  the willingness of election losers to accept the results, a free an independent press that acts as a watchdog, not an advocate, and security and law enforcement agencies that play it straight.   The Mueller probe has revealed the taint in all three.

The investigation was initiated with a fraudulent FISA application and was borne out of one of the worst things to befall a democratic republic—the refusal to accept the results of an election.   And with no small irony, the New Left, led by Ocasio-Cortez, Rashida Tlaib, Elizabeth Warren, Al Green and their allies in the media are likewise refusing to accept the results of a $30 million, two-year probe that employed primarily Hillary Clinton supporters and donors as investigators.  They are moving on to impeachment.

If you can’t find collusion with this team, it simply isn’t there.   

The Democratic refusal to accept results of a elections has reached peak intensity with the Mueller probe.  Andrew Gillum at first refused to accept the results of his loss in Florida and Stacey Abrams, one of the new darlings of the New Left, is still refusing to accept her loss in Georgia.  The Mueller investigation was an outgrowth of Clinton’s refusal to accept her 2016 election loss.

In addition to the refusal to accept the results of an election, the Mueller probe utilized a now standard tactic of the New Left— level a false accusation, stay with it, and force the accused to fight it off.  The New Left has been employing this tactic and refining it since the Clarence Thomas hearings.  Because it works.  It almost derailed the Kavanaugh nomination.  Perpetrating the “Russian collusion” hoax was a no-lose tactic here, too.  If they found something, great.  If they did not, at least they put sand in Trump’s gears for a couple of years and diverted him from getting more accomplished.    

Leveling false accusations without consequence an inversion of our criminal justice system.  In our system, the accused is innocent until proven guilty.  The New Left employs the Stalinist version.  They accuse you and force you to try to prove a negative.  Fortunately, in Trump won both times—in the Kavanaugh nomination and his own.  A person less sturdy than Trump would have folded.  And in both of these cases, the MSM was fully on board, blaring out each leak and each cherry-picked shred of “evidence” that they were sure would lead to Trump’s downfall.

You can expect to see more of this.  The New Left will likely pay no price for what the Mueller investigation did to Trump.  Christine Blasey Ford paid no price for her false accusation against Kavanaugh.  Jussie Smollett was let off the hook by Obama ally, Kim Foxx.  The only incident in which the perpetrators and allies of falsehoods may be held to account is with respect to the Covington incident, and that is because they have an aggressive and talented lawyer that is willing to go after the media perpetrators in the court system.

Finally, and I think an overlooked aspect of the Mueller probe is that the MSM is so allied with the New Left and so obsessed with aborting the 2016 election results is that they deny our Republic the ability to fairly and accurately criticize Trump, to look at his policy choices critically and evenly and put sensible alternatives on the table.  By taking a side, and perpetuating falsehoods and writing in hyperbolic terms, they force the rest of us to choose sides.   You find yourself defending Trump against these silly charges like  “racism,” “xenophobia,” “Islamophobia,” “fascist” and the rest of the hyperbolic but unfounded accusations.  I have been often accused by my friends on the left of being a “Trumper.”  That is not true.  I am and have been from the beginning, a “semi-Trumper.”  I do question his policy choices.  His apparent willingness to sell F-35s to Turkey, for one, nominating Stephen Moore and Herman Cain (now withdrawn) to the Federal Reserve are bad ideas.  His tone and negotiating tactics (to Kim Jung-Un, “we fell in love”) lead me to grind my teeth.   I especially do not like that he hasn’t even talked about our fiscal imbalance (but the New Left promises only to expand it).  But Trump is addressing issues that have long needed to be confronted—Chinese trade policy, Iran, NATO and our porous border.  By being completely one-sided, and hyperbolically so, rather than being fair minded the New Left, and their MSM advocates push us into a defense of Trump, and they impair our ability to make fair assessments and judgments of his administration.

Setting the Filter

The words “bigoted,” “racist,” “Islamophobic,” “xenophobic” are being flung around in lieu of real analysis of real problems to be solved.

In each case, the liberal narrative deals with a multitude of issues as if they were all ones of racism and white nationalism, so much so that the House of Representatives last week had a special hearing on the scourge of “White Nationalism.” “White Nationalism, “ in my view is not a major problem in the U.S.  and has not been for decades.  Sure, you had the Charlottesville incident, but that was a clash between the far left and the far right, with other elements mixed in.  The follow up march of white nationalists in Charlottesville a year later was so sparsely attended that it barely filled out a baseball roster.  Leaving aside the issue of whether nationalism is a negative, white nationalism is an issue of relatively minor import.

Our social issues are much more complicated than passing them off as due to White Nationalism and have little to do with modern day KKK or neo-Nazis.  Rather, they are about reasonable people that cannot come to a consensus on how to set a filter.   The New Left wants little or no filter applied in certain instances and that is simply an untenable position.    But if we think about these issues in terms of filter setting, we might be able to have a more constructive conversation.

Immigration

The United States needs immigration to fuel our economy.  Our native population is not growing fast enough to fill the projected labor needs of our economy.  But we also need it to be sensible, and in line with our nation’s needs.  An immigration policy that was appropriate 100 years ago, or 50 years ago is not appropriate today.  We cannot be the welfare state and health care provider to the world.

There are actually two pieces to this problem.  Assimilation is one, and that is for another essay.  But how to set the filter is another.  When an immigrant arrives, that person can land in only one of three buckets.   He or she can be employed or employable and self-sustaining.   If that person cannot be self- sustaining, without family help, he or she will end up in the social welfare system or the criminal justice system.  Those are the only three viable alternatives.  There are no other outcomes.  

A sensible immigration policy is one in which the migrants have skills to be self-sufficient and can readily assimilate into American life.  With the demand for unskilled labor projected to decrease in the coming decades, this means filtering out more uneducated, low-skilled people.  It is true that the waves of European immigration are over.  Europe is having trouble enough sustaining their own populations.  The result is that any attempt to put sensible limitations or qualifications on immigration will trigger charges of xenophobia.  A saner approach is to set the filter so that we screen out prospects for the social welfare and criminal justice system and let in people that will likely be self-sustaining.

Islam

Islamic immigration presents a unique filter setting problem.  Despite the howls from the New Left, we are generally a nation that is very tolerant and accepting of diverse religious beliefs and that tolerance has been codified into our legal structures.  

We have Christians and Jews, Catholics and Presbyterians, Hindus and Sikhs.  But Islam appears to be a different matter.  Unlike other religions, Islam does not uniformly recognize the separation of religion and state, and certain segments of Islam have a propensity for violence.  We cannot turn a blind eye to those realities.  I will have more to say on Islam in future posts, but for purposes of this post, suffice it to say that Islam presents a tremendous filtering problem.  That is so because we reflexively want to tolerate and accept other religions but the risk of violence and the social norms embedded in Islam make integrating Islam a more difficult proposition. 

The experience of large Muslim populations in Europe has generated a plethora of difficulties and is responsible, in part, for the Brexit vote and the rejection of Muslim immigrants by several of the Eastern European countries. 

Donald Trump understands this and attempted to address filtering Muslim immigration with the Travel Ban, which was met with lawsuits and howls from the Left.  The Travel Ban was imperfect and inaccurate---a clumsy filter—but it was an attempt to set a filter with some logic behind it.  Filter out people that come from terrorist hotbeds to reduce the risk that they with inflict damage on us.

So far, Muslim immigration has not had wide reaching consequences here, except in a few pockets.  But it does raise issues in places like Lewiston, Maine and Minneapolis.   The election of Ilhan Omar in Minnesota’s largely Somalian 5^th district, her firebrand anti-Semitism, association with CAIR and remarks about 9/11 don’t help matters.

The trouble is that we do not have a good way to distinguish between Islamic and Islamist and that IS a distinction with a difference.  It is a knotty filtering problem.

Mass incarceration.

I don’t pretend to be an expert in the criminal justice system, but by sheer numbers we know that something is out of kilter.  We have learned a few things since the 1980’s when the conservatives won the day by claiming liberals were too soft on crime and we locked people up in large numbers.   We learned, for instance, that it is age demographics rather than harsher punishments that have the larger affect on crime rates.  Today we find ourselves with a mass incarceration problem.  The U.S. has the highest per capita incarceration rate and the largest prison population. 

Again, criminal justice reform comes down to setting an appropriate filter.  It is a mistake to condemn someone to a life sentence of poverty because of a mistake, especially a youthful mistake.  We desperately need to be able to distinguish between people that should be in a mental health system from the criminal justice system.  Setting filters here is an enormously difficult task but an important one.  It is also one that is bound up with racial issues because of the disproportionate number of blacks that end up in the criminal justice system.

Currently, our unemployment rate is at a decade low 3.8% with many employers complaining of acute labor shortages.   With 2 million people on the bench, this represents a tremendous human capital mismatch.

But I am not naïve about this.   Separating redeemable people that made mistakes from bad people and sociopaths is a hard, hard problem.  And getting it wrong can have catastrophic consequences.

Still, some are trying hard.  I recently read a story about one food company whose workforce consists of 40% ex-offenders.  They have done a tremendous job of screening and monitoring these people and giving them a second chance at becoming a productive member of society.

Again, Donald Trump has attempted to address this with prison reform, but more needs to be done.  It would be better for all of us if we can find ways to get more of those 2 million back at work.

Each one of these issues generates hot rhetoric, accusations and name calling, none of which is useful.  I believe that the conversation in each one of these issues should revolve around how to set an appropriate filter.  Rather than charge anyone with an opposing viewpoint as being inherently prejudiced,  reframing the problem as a filtering problem may help take some of the heat out of the discussion.

Meeting of the Minds

Last week, I attended a program at The University of Chicago entitled A Meeting of the Minds: Business and the Human which featured William Howell, Professor of American Politics and Raghuram Rajan, Professor of Finance at Chicago Booth.  The discussion was moderated by Bret Stephens of The New York Times.  The discussion topic was Democracy, Populism, and Capitalism:  Are They Compatible?

Howell began by defining populism in the negative.  He asserted that populism is not a commitment to standing up for “the little guy.”  Rather it stands in opposition to the political elites and the existing political order.  Populists push back against existing political institutions.  It expresses itself in claims of who “true Americans are” and a need to “return to our political heritage.”  Populists see political institutions as “the swamp.”  It arises out of political failure to deal with population movements, technological change and income inequality.  These things lead to harm and disaffection.

Rajan responded by addressing income inequality, that the returns to education and skills have increased.  It is hard for some people to get to the first step on the ladder.  Poor family structure, bad schools and bad work habits combine to put people behind.  Nobel Laureate James Heckman says that many people are doomed by the age of 5.  He also asserted that much of this is driven by technology, and that is nobody’s fault.  Governments have not remedied lost opportunities.  In Rajan’s view, Davos does nothing.  Rajan is warmer toward nationalism (as am I).  It has become a dirty word but can be synonymous with patriotism. 

Howell’s take on immigration was that in the main it is good for the country, but when government doesn’t control it, it let’s the populists step in.  It is not necessarily a good for all.

Rajan sees more upside to social media.  It is easier to get in touch and get together with people and we will use technology to deal with some of the bad sides.  He sees that it will strengthen relationships.

Both Brett Stephens and William Howell believed that social media was instrumental in getting Trump elected.  Stephens said that he got elected because he was good at Twitter.  Howell believed that Trump got a free pass from the media.  Rajan took a middle approach and said that there were things that Trump said that resonated with the electorate.

It was clear that both Stephens and Howell are more wary of populism.  Rajan was more positive.  In the final analysis, he said, the virtue of populists is that they raise the right questions.  They might not have the best answers, but they raise the right questions.   They are doing a service when they say that the elites have gotten too cozy with one another. 

Rajan said that under a populist president we are growing at 2.5% while not spectacular, is still pretty good and we are at 3.7% unemployment rate.  Despite all the angst, things are pretty good.

My own sympathies were with Rajan.  He is loathe to finger point, ever.  His book on the Great Recession, Fault Lines was the best of its kind.  In it, he blamed the system while others were blaming government, the banks or the borrowers.  His position was that people were acting rationally based on the financial system that was in place. Likewise, Rajan’s view is that the emergence of populism is rooted in economics and technological changes.  I agree.  It is easy for the Left to write off populists as xenophobic, nativist, Islamophobic, or whatever, but the fact that we are undergoing seismic shifts means that uncontrolled immigration, especially from either places that have cultures that may have compatibility issues with ours or peoples that may need extended periods of state support will meet with some opposition and resentment.

Brett Stephens did say that the most valued thing he did intellectually was to attend The University of Chicago, that his degree was the most difficult to get.  But I did leave part way through the Q & A session.   While attending a University of Chicago event is often illuminating, there is a downside.   University of Chicago grads are not bashful about having their ideas heard and unless they are tightly controlled, Q & A sessions can deteriorate into long winded pontifications from the audience, and those people tend to forget that we came to hear the ideas and insights of Rajan, Howell and Stephens and not theirs.

Justice Obstructed

The news last week was dominated by the stunning decision of prosecutor Kim Foxx to drop all 16 counts against Jussie Smollett, with shifting rationalizations.  First, she implausibly contended that her move was an “alternate prosecution” as Smollett agreed to forfeit his $10,000 bond and do community service.  Then she explained that this is the sentence he would have gotten anyway because he was a first time offender.  Then, Foxx claimed that she didn’t believe there was sufficient evidence to convict.  That last statement flies in the face of everything that has been made public by the Chicago Police Department.

After a momentary outburst of righteous indignation in which outgoing mayor Rahm Emmanuel decried a “whitewash of justice,” Rahm reverted to his hyperpartisan self and blamed Donald Trump for “creating the toxic atmosphere” that made Jussie’s actions possible.

Smollett’s lawyer speculated that maybe the Nigerian brothers were wearing whiteface like the Joker and threatened to sue the city.

What is really going on? Tina Tchen, Michelle’s former aide contacted Foxx.  The conversation went something like this: “Kim, we need you to just drop those charges.  Just make something up.  You will catch heat for a few weeks, and you’ll probably be asked to step down.  But don’t worry.  We have you covered.  There will be a job at Netflix for you if you need it.”

The cue came from the assistant State’s Attorney Joe Magat’s statement.  Magat used words identical to that of Robert Mueller and said that dropping the charges does not mean that Smollett was exonerated.

Here’s my final take.  Dropping the charges was a direct poke in Trump’s eye by the Obamas.  It was meant to send a message and that message is “You may control a few things in DC, but we are still boss in Chicago, the West Coast, and the Deep State.” 

The Smollett fiasco is very bad on 3 levels.  It was an egregious exercise of clout in a city known for its corruption- these people put the bananas in banana republic.   It showed that consequences are for the little people.  Finally, and the worst part, is that a fake hate crime is worse than an actual hate crime.  A hate crime hurts a single person.  A fake hate crime rips at the fabric of our entire society by propagating a lie.  It is designed to pull us apart, to put us at odds with one another, make us suspicious of each other.   Fake hate crimes should be punished even more severely than real hate crimes.  The justification that Magat provided, that “we work to prioritize violent crime and the drivers of violent crime” doesn’t pass muster.  In this case, Smollett did extreme violence to the cohesiveness of our entire society.

The real bottom line is that real hate crimes and real disrespect shown to others because of their race, religion or ethnic origin is actually quite rare in America. But because racial division is politically profitable and vital to the narrative of the Democratic party, we are seeing more instances of hoaxes.  And it is important that the perpetrators of hoaxes and false narratives suffer consequences.   In the case of the smear against the Covington Catholic kids, the courts will sort that out.  In the Smollett case, courts also would have, but they were not allowed to function.

I think we found the obstruction of justice thing. And it was right here in Chicago.

Filmography

 From time to time, I like to blog about interesting films and books that captivated me.  Two films released recently that I have tagged as “must see” and which I will likely see again. Both films involve the affect of war on individuals and the disruption in causes in peoples’ lives.  Both raised questions that lingered with me for days.  These films had short runs and are out of most theaters now, but look for them on On-Demand, Amazon or Netflix.  You will not be sorry.  I promise.

They Shall Not Grow Old

About the same time as he launched his midnight raid with bulldozers on Meigs Field in Chicago to destroy the runways before opposition could mount, the son of the Great Patriarch of Chicago, Richard M. Daley (with the concurrence of the Chicago Bears) began to push for corporate naming rights for the home of the Chicago Bears—Soldier Field.  As word of the deal leaked out, Daley took increasing flak.  For Pete’s sake, the stadium is a war memorial, dedicated to the soldiers that sacrificed themselves during WWI.  The whole point of a war memorial is to erect a permanent structure so that these people will never be forgotten.  Astonishingly, it did not occur to Daley to think about the origins of the stadium’s name.

My own introduction to WWI came when I was about eight years old.  My grandparents bought an old farmhouse in Wisconsin and hidden in the attic was a bound collection of raw photographs of WWI from the Chicago Tribune.  These newspaper photos were not for young eyes as they explicitly showed the horror of trench warfare--- the gassed corpses, skeletal remains, the gruesome injuries, horses half-blown away by shells.  I don’t know whatever happened to this collection, but it left an impression on me. 

They Shall Not Grow Old is a magnificent project by Peter Jackson that involved an enormous technological effort.  Jackson took old black and white herky-jerky film footage of WWI held in the British archives, smoothed out the motion caused by hand crank cameras, colorized it, and overlaid the voices of the soldiers to bring the catastrophe of WWI back to life.  And unlike the special effects of Jurassic Park, it’s the real thing.  The 100^th anniversary of the end of WWI came and went without much fanfare.  We don’t think about that war much anymore.  It has faded from memory,  but it left a deep scar on Europe and we are still feeling the effects of it to this day.

What most struck me about this film is the fraternity like camaraderie that the soldiers expressed in the beginning through training, as if they were going to sports camp.  And secondly, how they stepped back into ordinary life after it was over, as if this horrendous thing had never happened.  As I have gotten older, I have become more pacifistic, even though war has never personally touched me.  They Shall Not Grow Old helped confirm my evolving view.  The recent actions that erase our history--- like tearing down statues, or covering over murals (as Notre Dame just did with its mural of Columbus) are an anathema.  Our history, in all its glory and its ugly parts needs to be preserved.  Peter Jackson did a great service to our history by building this visual memorial.

Never Look Away

I almost passed on this film.  Its length of over 3 hours nearly scared me off as a film of that length is almost always a sign of poor, self-indulgent editing.  But just as you can’t tell a book by it’s cover, you can’t tell a film by its length.   This film staggered me with its complexity, beauty, and emotionality.  Loosely based on the life of Gerhard Richter, whose artistic life was torn between two totalitarian regimes--- the Nazis and the Stalinists, until his escape to West Germany.

What made this film an even richer experience for me was listening to the filmmaker Florian Henckel von Donnersmark’s interview with Terry Gross on Fresh Air (https://www.npr.org/2019/03/06/700663706/never-look-away-asks-why-make-art-who-is-it-for) and I highly recommend that you do so before you see the film.  In it, the filmmaker tells us that the art pieces depicted at the beginning of the film are reproductions of Richter’s work from old photographs of his exhibitions.   We also learn that Richter’s  aunt did suffer from some form of mental illness and an open question for me was whether living under the Nazi regime triggered or worsened her condition.  The interview reinforced for me the feeling of authenticity of the film.

Never Look Away shows us the incredible soul crushing weight of both regimes--- the Nazis and the Communists that followed.  The authenticity of the film itself contrasted with the suppression of individual authenticity of artistic expression by the Nazis and the Stalinists. 

The film is at once a wonderful love story with the artist caught between the regimes and facing his love’s father, a holdover Nazi official, that wishes to disrupt and destroy his relationship with his daughter.  Sebastian Koch is masterful in his role as Carl Seeband, the smart, skilled and soulless Nazi physician.   It is a film which could easily have become maudlin and tedious but it never was.

There are so many striking scenes in this film—his aunt’s mental breakdown, the firebombing of the historical city of Dresden, the scene in which his art professor ignites the political posters of the candidates in democratic West Germany.  And yes, there are several sex scenes, but none of them gratuitous, all artfully shot and all well done with a purpose in the film to advance the story line.  The music score is beautiful and perfect for the rhythm of this film.  The title itself perfectly conveys the message of the film.   Never Look Away is one of the only movies I’ve seen over the past decade.  The screenplay, the acting, cinematography, and the music were all superb.  It was a film  in which all of the pieces fit into a gorgeous, authentic mosaic.

I recommend that you see them back to back.  In an era of godawful filmmaking, these are two works of art—one about an artist—that remind us of the destructiveness of war and totalitarianism.  In his Q&A, von Donnersmark said that the cast and crew felt “an incredible responsibility to our parents and grandparents, to do justice to their story, to the decades that they lived through.”

I believe that both of these films succeeded in that task in a major way.

So Many Swamps, So Little Time

Two major scandals have roiled higher education recently.  First there was the Larry Nassar scandal at Michigan State which ended the career of former president Lou Anna Simon, who was indicted for lying to federal authorities.   MSU athletic director Mark Hollis was forced out and the school reached a $500 million settlement with victims.  At one point, bankruptcy was one of the options considered by the school.  In a real twist of irony, a female president was at the helm of an institution that failed to protect young women from an egregious and ongoing pattern of sex abuse.

Now we are faced with yet another major scandal involving wealthy individuals paying bribes to get their children into elite colleges.   Well to do actors and actresses and even the co-managing partner of a major law firm have been swept up in the sting.  Elite schools such as Yale, Georgetown, Princeton and USC are involved in a maelstrom of privilege, collegiate athletics and bribery and fraud.  What is so shocking about the sting is how widespread it is and how many institutions were involved. 

The admissions scandal, along with the MSU scandal are symptomatic of poor governance and internal controls as well as structural problems in our higher education system, particularly in the area of intercollegiate athletics.  

The breadth of the scandal points to a widespread lack of internal controls.  No company or institution can insulate itself against fraud, but lax processes and controls do invite it.  One of the points in his book Why They Do It: Inside the Mind of the Why They Do It: Inside the Mind of the White Collar Criminal by Eugene Soltis, is that opportunity itself is one of the factors that contributes to wrongdoing. Leaving the door open to the opportunity (and worse, looking the other way in the MSU case) existed in both scandals.  Alan Dershowitz commented that the admissions scandal did not hit Harvard because Harvard has a committee of 6-7 people involved in the admissions process.  So Harvard apparently has some internal controls around this.  Caught in the scandal, Yale has started this process in reaction to the scandal and has announced that it is reviewing its entire admissions protocol and athletic recruitment process.   Put another way, tuition at Georgetown is $54,000/year, making each one of those slots an asset worth over $200,000.  You would never give sole control over assets of an organization valued at seven figures without rudimentary checks and balances like dual signing authority, auditing outcomes for athletes, etc.   Clearly there have been multiple breakdowns of internal controls.

In addition to laxity of internal controls, there are structural reasons for this to have occurred.  Many of the same elements that precipitated the housing crash are at play and have festered in higher education.  Raghuram Rajan, in his acclaimed book Fault Lines, wrote of the mortgage crisis that the crisis was largely a result of people making rational choices in a flawed system.   Overcapacity and easy credit availability, along with cultural shibboleths—a college degree as emblems of status and a ticket to wealth—have provided the tinder for this crisis.  Just as easy credit inflated home prices, it has bloated education costs (most of which was in exploding administrative costs).   This phenomenon was masked for some years since parents funded college education with their home equity loans.  When home equity financing began to dry up, schools just shifted the debt burden to the balance sheets of the students.  Student debt now totals $1.5 trillion ($37,000 per student, on average).  And just as in the housing crisis, where individuals that could not absorb equity risk became homeowners, millions of young people are attending college that don’t necessarily belong there.  The consequence is the same – a bubble with a debt overhang.   The education bubble has implications for home ownership, marriage rates, and household formation.

I hate making predictions but I will make two of them.  We will see yet another scandal of the magnitude of Michigan State or the college admissions scandal within the next 12-18 months.  And over the next decade higher education is going go through a restructuring as wrenching as the one retail is going through now.

Some schools have already begun to feel the pain.  Locally, Western Illinois University enrollment has shrunk from 11,700 in 2013 to about 6,700 today.  Valparaiso University Law School spiraled downward so quickly that it was forced to close and will do so in 2020.

WordCom and Enron gave us Sarbanes-Oxley.  The mortgage crisis gave us Dodd-Frank.  Because much of higher education is and should be out of the reach of regulators, reform will need to be generated by the schools themselves.  Here are a few ideas (some of which would need to be fleshed out):

•         Like the mortgage crisis, the universities should have skin in the game.  Just as lenders retain some of the risk of making mortgage loans now, schools should retain some of the risk of loan defaults.
•         Strengthen community colleges and HBCU’s (Trump took some initiative on the latter last year).
•         Take away tax deductions for noneducational assets·  
•      Since athletic departments seem to be a place where a lot of this shenanigans occurs, tracking athletes should become a requirement for federal dollars (just as Trump talked about cutting federal dollars for schools that do not support free speech).
•         Disconnect big time athletics from education (See, e.g. Indentured:  The Battle to End the Exploitation of College Athletes by Joe Nocura and Ben Strauss). Big time college athletics is a tax subsidized and labor cost controlled minor league for the NBA and the NFL.  Let’s call it what it is.
•        Perhaps consider suspension of 501(c)(3) status for egregious violations.
• ·        Legacy, athletic, affirmative action and other favored admissions criteria need to be examined, reduced or capped.
• ·        Consider tying federal funding to staying within certain parameters of administrative expenses.
• ·        Retool universities so that education is not front-loaded but a source of lifelong skills training (again community colleges and HBCU’s are uniquely positioned for that). 

The last point is most important.  It involves changing the model to match the changing demands of the economy. 

We are in the midst of some difficult adjustments with qualifications and provisos tacked on to long held shibboleths.  Home ownership is a good thing but it is not universal for those that should not take equity risk.  Free trade is good, unless a major trading partner isn’t trading fairly and stealing your intellectual property.  College education is a good thing, except when it is systemically corrupt and creates mismatches between needed skills and the labor market and leaves kids burdened with nondischargeable and unserviceable debt.

Think of the college admissions scandal as the Lehman Brothers of higher ed or the Challenger disaster of NASA.  It is indicative of systemic imbalances and flawed incentives coupled with poor governance and oversight.  There is an old aphorism that “Once is an accident.  Twice is a shame.  Three times is a message.”  We’ve now had two.