The Fetish Of Centrism

He doesn't come out and say it, but I think Jonathan Chait's piece on the Democratic congress, really puts the lie to this idea that what we need right now is group of Senators assembled to prevent the Democratic Party from tilting to the left. My beef isn't with people who aren't as liberal as me--it's with people who call themselves moderates because it polls well, or to cover for their fundraising efforts. As Evan Bayh admitted, these dudes have no stated platform. They're just yelling "Centrism!" into a crowded room.

So what do they want? Who really knows. But here's Chait on Mr. Moderate Ben Nelson:

The most emblematic objection has come from Nelson, who is balking at Obama's plan to save money on college loans. You might suppose that a fiscal conservative like Nelson would agree with Obama's plan to save $4 billion on a social program. But he does not, for reasons that provide a useful window into the rot afflicting the congressional Democratic Party.

For many years, the federal government supported college education by guaranteeing bank loans to students. If a student defaulted on his loan, Washington would simply pay back the difference. In 1993, Clinton undertook to reform the program by cutting out the middlemen and simply having the federal government issue the loans directly. Clinton hoped to save money for the government and plow some of those savings into lower interest rates for students. Of course, private lenders who benefitted from the no-risk profit stream balked and forced a compromise whereby both kinds of loans--guaranteed private loans, and direct loans from the government--would exist side by side.

Recent years have shown beyond a doubt that the direct lending program works better. Every independent analysis--by the Congressional Budget Office, by the Office of Management and Budget under each of the last three presidents, and by the New America Foundation--has found that direct lending is cheaper. The guaranteed-loan program managed to cling to life through its congressional patrons and through simple graft. In 2007, a major student-loan scandal emerged when it turned out that private lenders paid off college administrators to drop out of the direct lending program and steer students to them.

Obama thus proposes to save the taxpayers more than $4 billion per year by ending the guaranteed loans. This is as straightforward a case as you can find of a fight between special interests and the public good. Nelson opposes it because one of the lenders that benefits from federal overpayments is based in Lincoln, Nebraska.

There's so much more. Read the piece.