So notes CNBC yesterday. We’ve already highlighted the gross inequity of forcing people that never were a party to a loan to assume the payments of others (as in here, here, and here), in many cases people that make far less money than the beneficiaries of student loans, so I’m not highlighting that this morning. Rather, I want you to focus on the one line from Secretary of Education Miguel Cardona: “We are committed to fixing a broken system.”

There is an obvious question–why is this system broken? The Obama administration (you know that administration that featured Joe Biden as the #2 guy for eight years!) nationalized the student loan system to fictitiously “pay” for Obamacare, and created the mess we’re in now. Critics have hammered Obama’s actions from both the left and the right for years. Mr. Obama created this mess in the spring of 2010 (when recall the Republicans held zero power, as the Democrats owned a filibuster-proof majority, and not a single Republican voted for this).

The first observation is that we continue to hear of a crisis in our institutions, and we certainly have this. But we fail to ask why we have a crisis. And the overarching common theme is that institutions suffer Mission Drift. They start doing things that they don’t have power to do, and fail to address things that they do have power (and responsibility) to do. As an example of this, we are suffering a raging inflation right now, and President Biden has said that he’s doing all he can to confront it. Yet when inflation is always and everywhere a monetary phenomenon, who does he make as his first appointments to the Fed? You’d think he would nominate noted economists that have dealt with inflation, and yet of course you’d be mistaken. Mr. Biden’s first two picks were diversity hires, not people with significant monetary understanding:

One notable aspect of Biden’s Fed is its unprecedented diversity. After the expected confirmation of Philip Jefferson, a former Fed economist who was approved unanimously by the Senate Banking Committee, the central bank will have two Black board members serving simultaneously for the first time. The board will also have three women, a rare and recent phenomenon.

Under Powell’s leadership, the Fed has put greater emphasis on ensuring that as many Americans can be employed as possible, a policy that has drawn criticism from Republicans who say the central bank acted too late to curb spiking inflation by raising rates. Cook and Jefferson are expected to share a similar focus on the health of the labor market.

Now I’m sure both of Mr. Biden’s economists are fine scholars in their own right; this isn’t meant to disparage them or their work. What I’m pointing out is that the Fed is the only institution than can create inflation or contain it, and there has long been a view (unfortunately jettisoned by the current left-leaning Fed and Congress) that the best way to support employment is precisely to have the Fed focus on price stability. But the Fed’s gaze has now went astray, thinking about climate change, ending racial inequality, etc. So as the Fed has focused on labor markets, climate change and racial inequality, the one thing they control has run wild–inflation.

This sidebar is obviously something I pay more attention to than other issues since I’m a monetary economist (albeit at a teaching university, not a research university), but my point is that this is illustrative of an endemic problem in government.* Agencies that are forced by political pressure to address things that are not core to their mission–shock!–don’t do them very well. So back to the education department. Is there any reason why we would expect them to run a loan program better than the private banking system? Of course not, if your goal is to ensure that every loan is paid back. But if you could care less about wasting trillions of dollars, and wanted to support the education industry (public colleges primarily mind you, especially not those greedy for-profit ones!) that scratches your back, it makes perfect sense. And there is zero accountability to one government mismanagement after another–the institutions that regularly fail will reshuffle the deck chairs, and get even more money to do what that shouldn’t do, and fail to do what they should.

$30T+ and counting. And the institutional rot continues, as the man who ran on a unity platform continues to put progressive wish list items ahead of anything that would unite our country. But yes, November is a comin’.

* We could go on all day with examples of this, such as the recently reported leak of the Navy’s focus on preferred pronouns. If true, this absolutely sickens me, and will further the institutional rot within our great military, which has one and only one task: to fight and win our nation’s wars.