Biden’s Student-Loan Wipeout Sticks It to the Poor

T he Democrats have always been a class-war party — but they have switched sides.

The Republican Party is slowly transforming itself into what the Democratic Party in Minnesota still calls itself: the Farmer-Labor Party. Donald Trump’s idiotic trade policies were actually pretty hard on many American farmers, but rural America is Republican America, and that shows no sign of changing. And while the big bosses of organized labor remain sycophantically committed to political serfdom under the party of Chuck Schumer, Nancy Pelosi, and other children of privilege who have never lifted anything heavier than money, rank-and-file members of the industrial and trades unions have shifted toward the Trump-era GOP and done so bigly: One much-remarked-upon analysis suggests that it was the swing in the union vote that put Trump over the top in 2016. That isn’t necessarily good for policy — Republican trade policy in the coming years almost certainly is going to be less Cato and more AFL-CIO — but the brute political facts are what they are.

And the old country-club Republicans? They’re the new country-club Democrats.

Of course, many Democrats remain culturally disinclined to actually join such an atavistic institution as a country club, and many of them would be embarrassed to admit living in a gated community. Instead, they live behind invisible gates — gates made out of money: The ten wealthiest ZIP codes in the United States are solidly Democratic, the wealthiest communities in the United States tilt heavily Democratic in their political donations, Americans in households earning more than $220,000 a year are more likely to be represented by Democrats than by Republicans, and you have to work your way pretty far down the list of the wealthiest Americans before you round up more than a handful of Republicans: Bezos, Zuckerberg, Gates, Page, Brin, Ellison, Buffett, Balmer — don’t expect to meet any of these guys at the next meeting of the vast right-wing conspiracy. Any Republicans? You can score a “maybe” with Elon Musk and a “technically, temporarily” with Mike Bloomberg. You may find some Republicans down at the local Walmart, but Alice Walton is writing fat checks to Democrats from her Manhattan penthouse. Wall Street? Democrats. Silicon Valley? Democrats. Hollywood? You aren’t really asking, are you?

But the Centurion-card set isn’t the really important Democratic demographic. They don’t have enough money. Sure, they have tons (literal tons, if you put it into $100 bills) of money on a per capita basis, but there aren’t very many of them. The real money, counterintuitively, is to be found not among the gazillionaires but among that class of Americans occupying the sweet spot between plentiful and comfortable.

Hence, the Democrats’ effort to move Heaven and Earth — micturating vigorously and voluminously upon the Constitution from a great height along the way — to put ten grand into the pockets of millions of well-off Americans in the form of student-loan forgiveness. That Joe Biden’s autocratic unilateralism will be found unconstitutional by the Supreme Court I am confident, but that won’t change the underlying political dynamic.

There is no need to rehearse all the economics here in detail, but the move disproportionately benefits high-earning Americans at the expense of — everybody else. There isn’t any real economic case for it, and the political case for it is only the great infantile cry that sustains all such political escapades: “Baby want!”

Baby want, baby get.

We have, possibly, overdone it with the self-esteem. The prim, grim urban and suburban progressives who today dominate the Democratic Party believe that they are “like unto leaven, which a woman took, and hid in three measures of meal, till the whole was leavened” — that in spending four or five or six years at Haverford or Bryn Mawr or Michigan State or the University of Texas or some other ghastly inverted cloaca of American intellectual life they have become, in some ineffable way, a national treasure. Sure, they earn a lot more money than the schmucks who drive them to the airport or cut their grass, but they have done the hard work of becoming enlightened — and is not a dedicated leader of the people entitled to his dacha? We have so invested college degrees (even the mediocre ones) with social and quasi-spiritual significance that college graduates have come to regard their time inhaling intellectual flatus in the Dutch ovens of higher education as a kind of national service — and they believe that it is outrageous that they should be expected to pay a little something for it.

There are, of course, very few American college graduates who have paid for the actual cost of their education: At the University of Texas, tuition and fees account for only about 21 percent of the cost of educating a student — and that is up sharply from what it was a few decades ago. Subsidized student loans are a bad way to pay for college education — it would be more honest to simply subsidize the universities directly and account for that spending in the budget as spending rather than pretending that the subsidized loans are assets — and one of the reasons for that is that they contribute to tuition inflation. What happens to housing prices when interest rates go up? They go down. Why? Because, as every car dealer knows, consumers are willing and able to pay higher prices when financing is cheap.

Student loans really are a bad deal for students collectively, because the students are only being used as conduits to shunt money to university faculty, administrators, and staff — who constitute an important political constituency, particularly in big Democrat-run cities that very often are economically dependent on the government, health-care, and education sectors. But that’s an argument for getting Uncle Stupid out of the subsidized student-loan business, not an argument for giving young lawyers $10,000 out of the Treasury and expecting everybody else to pay for it.

There are a lot of poor people out there whose household finances would be absolutely transformed if a couple of thousand bucks in consumer debt they cannot pay, or missed mortgage payments they can’t catch up on, were forgiven. (It also seems to me that our credit-rating system is in some cases unduly punitive, though I do not have a good idea for how to fix that.) At a fraction of what we are spending on affluent young college graduates, we could do a lot for some genuinely poor people.

But, then, they’re poor nobodies and they didn’t go to Oberlin, so f . . . orget them.