Friday, September 16, 2016

Snake Oil and Trump University

On the radio I recently heard that the for profit technical school ITT Technical Institute has closed its doors; blaming the shutdown on a recent move by the U.S. Education Department to ban the company from enrolling new students who use federal financial aid. In another statement , they called it over-regulation. That’s a claim I often hear from conservatives, too much regulation is what they say prevents job creation.

I’m fairly sure that old time snake oil salesmen said the same thing when the FDA was given enforcement powers putting many of them out of business. Of course that claim is true in the strictest sense, because when our government regulates health and safety causing a business to stop selling its unsafe or ineffective product someone does lose a job but then those who aren’t harmed or defrauded benefit and reputable businesses prosper.

In the case of ITT Technical Institute the Department of Education has been under pressure to reduce student loan defaults. The Department of Education investigated and found that a high percentage of those who graduated from such schools were unable to find employment and that the placement assistance promised was either inadequate or non-existent. This led to those graduates either being unemployed or going back to the same kind of low paying burger flipper job they had borrowed $30,000 or more to try to escape.

ITT Technical Institute like so many other for profit education companies were modern day snake oil salesmen and like their earlier counterparts will complain loudly that have been unfairly maligned and that their employees have been put out of work. Sadly the students will have no one to advocate for them as they attempt to carry on with their lives many still owing tens of thousands of dollars and for the current students not even a worthless diploma to show for it.

This ITT Technical Institute debacle is remarkably similar to the Trump University scam wherein prospective students were promised they would learn from real estate investment experts hand picked by Donald Trump and materials prepared or at least reviewed by him. What they got were people hired to present material many of whom had no familiarity with real estate investing prior to reading the material in preparation to give the class. Donald Trump has been sued in numerous states as well as being investigated by the attorneys general of several others. Trump famously or infamously called the presiding judge in one of the pending cases biased because he’s a Mexican, which is a lie.

The Trump University scandal doesn’t just involve the presidential candidate. It also includes our own Governor Greg Abbot, then Attorney General of Texas, who took a $35,000 campaign contribution and Pam Bondi, currently Attorney General of Florida, who took a $25,000 contribution from Trump at around the times each decided to drop their respective investigations into fraud at Trump University.

There’s apparently plenty of tar to go around yet we don’t hear much of this in the media. This is exactly the same kind of crony capitalism that rank and file members of both parties are so frustrated with. So message to Republicans: Trump is not the answer!

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