Universities, Market Failures and Courts

It is no coincidence that Americans were gifted with two "landmark" rulings from the United States Supreme Court involving higher education on back to back days on June 29 and June 30, 2023. There's no coincidence because both cases involve forces acting within the market for higher education that distort supply and demand for college as a product and impact who profits from debts racked up PAYING for college.

The affirmative action decision announced June 29, 2023 ended two suits brought against Harvard University and University of North Carolina by a conservative organization that has worked tirelessly to defeat existing affirmative action practices in higher education. Why two different suits? The plaintiffs wanted to ensure they provided the USSC a chance to set an identical precedent with zero ambiguity about whether that precedent applied only to public institutions or public AND private. The hypocrisy of the court majority was emphasized by their back to back rulings.

These cases regarding Harvard and UNC were explicitly accepted so the court could explicitly set a precedent BANNING discrimination based on race in higher education in both public and PRIVATE settings. Yet, in the same decision, the court maintained the ability of US military academies to continue affirmative action in admissions to ensure their missions can be fulfilled. In a footnote, Roberts wrote:

No military academy is a party to these cases, however, and none of the courts below addressed the propriety of race-based admissions systems in that context. This opinion also does not address the issue, in light of the potentially distinct interests that military academies may present.

The same court, with the same majority, ONE DAY LATER, issued a ruling in (303 Creative vs Eleniss) protecting the rights of PRIVATE companies to discriminate against would-be LGBTQ customers. There's no principle there. The majority's logic ALLOWS discrimination when practiced for favored religious motivations. The majority's logic DENIES discrimination when practiced for the benefit of policies or interests they dislike.

The court was so desperate to gain ground in its capricious war for / against discrimination that it heard the 303 Creative case despite it not involving any ACTUAL customer of the firm who was denied wedding services. The man named in the plaintiff's original court case in 2016 was contacted by multiple organizations and said not only did he NOT send the business the request, he isn't even gay and is already married -- to a woman. A conservative organization filed the suit because the business owner MIGHT in the future be forced to provide wedding planning for an LGBTQ customer against its religious convictions. Despite the dubious provenance of the case, the Supreme Court took the case to move its agenda forward.

The debt relief decision announced June 30, 2023 ended suits brought in Texas and Missouri by entities who claimed a decision by the Biden Administration's Department of Education to pay off college loan debts of Americans matching certain income criteria harmed them by eliminating the extra profits that would have been earned by students paying off principle plus interest over time. In reality, the plaintiffs to the lawsuits were conservative organizations that objected to THIS particular use of Executive Branch regulatory authority for THIS particular set of beneficiaries. The USSC used the opportunity of these cases to terminate the plan and bolster the conservative majority's long standing premise that the Executive Branch (ANY incarnation in theory, not just the Biden Administration) has been allowed to exert too much power via regulatory decisions for enforcing laws that are entirely too vague.

That sounds like a principled rationale. When it comes to spending billions or trillions of dollars, Congress SHOULD be more precise about exactly WHO is targeted by a program, WHAT the qualifications are, HOW MUCH should be spent, and how much latitude agencies in the Executive Branch have to implement procedures for providing that benefit or enforcing that law. However, this philosophy is not remotely compatible with the complexities of a modern, high technology industrial society of three hundred and fifty million citizens. It's certainly not compatible with the type of legislation being written by Senators and Representatives in Congress or the lobbyists ghost writing their proposals for them.

In reality, the idea that the balance should swing back responsibility to Congress to write more specific legislation is a doctrine of Federalist Society conservatives that is pursued as a means of paralyzing both the Legislative and Executive branches from doing "big government" things. Large programs are inevitably complex and subject to endless delays from special interests and dysfunctional processes in the House and Senate. If you favor "small government", requiring this level of specificity in legislation is a guarantee of paralysis that fits your aims.

This philosophy as expressed by the majority on the USSC is also demonstrably rubbish when equally arbitrary executive branch decisions are compared over time. (More on that below...)

When a crucial pillar of American society is rocked by TWO landmark decisions in two days, it seems obvious something more fundamentally is afoot that is causing such convoluted corrective measures to be devised then rejected under such controversial, contested circumstances. It is useful to "look away" from the two bright lights of these decisions and look at the larger ecosystem of higher education and analyze the role it is expected to play and its actual performance.

College as a Commodity Service

According to classic economic theory, a market for a given product (a good or service) is "efficient" if

• both the product and the consumer are ubiquitous -- the product doesn't vary per customer and the supplier is agnostic regarding the buyer
• the product definition is understood by consumer and producer
• suppliers can enter or leave the market with few barriers to entry or exit
• supply quantities are approximately equal across suppliers - e.g. no monopolistic behavior
• costs of the product incurred for production reflect ALL of the actual costs of the product (no negative externalities like pollution that hide costs and encourage overproduction)
• consumers have perfect information about the product and price of each supplier's offering

The market for higher education violates nearly all of these assumptions.

• the college product is not ubiquitous in the eyes of the supplier or the consumer and a "sale" isn't made by exchanging a generic unit of the product with the agreed upon stack of dollars, the supplier "chooses" each individual consumer
• the "product" is not well defined by either suppliers or consumers -- what is "college"? 120 credit hours of classroom time in a carefully curated degree program? An away-from-home boarding school with luxury apartment, Greek-themed extracurriculars, gourmet meal card and deluxe 24x7 health spa? A place to make connections for use later in a professional career? A farm system to perfect skills needed to land a job for 2.5 years in the NBA or NFL?
• the "product" is not considered identical across suppliers -- consumers think the Harvard product is superior to the Whatsamatta U product
• for elite institutions and their graduates, the scarcity of their product is a material component of its perceived value, therefore each faces the incentives of a monopolistic producer to limit supply rather than expand it in response to demand like a competitive supplier in a functioning "fair" market
• supply isn't even close to being variable on a year by year basis -- public institutions depend up government funding from tax revenues with limited ability to flex upward, leading short term increases in costs to being shifted to students or supply being artificially reduced for non-demand reasons
• pricing is the opposite of transparent -- pricing varies PER STUDENT as part of financial aid decisions often dependent upon funds provided by wealthy alumni and donors who have their own agendas for how the money is used

These variances from a classic model of market efficiency mean approaches for altering the market based on classic strategies at best will have no effect at all or -- more likely -- ricochet within the system in unexpected ways and further distort the system's behavior.

College as a Branded Experience

If the college "product definition" isn't clear, what happens in the market for college? The same thing that happens in any imperfect market. Branding becomes paramount. When suppliers know they are providing nearly identical products, they link the product to a brand name and work to link a variety of intangible positive feelings to that name then use that as a shorthand for benefits that defy actual description or quantification. If successful, the brand helps segment the customer market and allows uninformed consumers to make artificial distinctions between "different" products from the same institution (think of schools offering day / night programs or MBAs and "Executive MBAs") or between different institutions. This is why people don't have an MBA anymore… They have a Wharton MBA, a Haas MBA, a Sloan MBA, etc.

For the consumer, branding becomes equally paramount because no prospective student can accurately assess the value provided by a Harvard versus Northwestern education in approximately the same price bracket. It is virtually impossible to assess the value tradeoff between a higher cost/risk Harvard education and a lower cost/risk Whatsamatta U education. The branding touted by the schools becomes equally crucial to the consumer in this situation. Even if a school doesn't sell its naming rights to a rich alumni donor, college sports serve as a core component of branding and advertising to attract customers. How many prospective students would know about Seton Hall or Gonzaga if they didn't occasionally make it into the NCAA March Madness tournament?

College as a Career Lotto Play

The net result of college becoming a branded experience is that the decision to attend college and borrow money to do it has become part of a inter-generational bet on outcomes in the employment arena -- a very expensive ticket in a career lottery. We are two generations past a point where high schoolers could envision a degree leading to steady employment and a reasonable career arc with meaningful income growth ending with a retirement cake, gold watch and a pension. The pension vanished for most in the early 1990s. A nice retirement gift was replaced with two month's pay as a severance package and days or weeks of notice. Now employers are laying people off via email. "Don't come in, just Fedex your laptop to _____."

Would-be college students also see how technology and work culture are combining to turn previously "professional" occupations into gig work. Work currently performed by a full time "software engineer" can be bid out for ad hoc development with zero time commitment. A video editor or audio engineer working in a movie studio or broadcast environment is using tools that literally MILLIONS of people have mastered to create content on YouTube that frequently looks better than "mainstream" content. Those skills don't require four years and $280,000 in tuition and room and board to learn or maintain. A three thousand dollar computer, another five to six thousand for tools (a camera, microphones, audio interface, editing software) and a few months of practice is the only price of admission. Use of these tools isn't taught in these institutions and even if they were, the tools themselves evolve so quickly that the college training would be superseded in months anyway so why take on the time and expense?

If at least some potential students understand these dynamics, why are college applications processes and debt costs triggering so much ongoing debate? Why doesn't "the market" see through the bluster, appropriately discount the "value" of a college education an appropriate amount, reduce demand then trigger suppliers to retract supply or lower price to balance the market at a new equilibrium?

As with many other situations in life, when a phenomenon is observed which cannot be explained by all of the visible forces and incentives involved, other factors not previously analyzed have to be at work. In the higher education market, the hidden factor distorting the market is economic mobility. As World War II neared its end, the GI Bill was passed for two reasons -- to reward returning vets for their sacrifices in a winning war effort and to provide a quick boost to America's science and engineering trades as the nuclear era made it clear how vital these capabilities would be going forward. Another unplanned benefit was the temporary shunting of some returning veterans into college and training programs that reduced stresses in the labor market as the economy ramped down wartime production and switched back to consumer oriented manufacturing.

The GI Bill created a notable square wave uptick in income and standards of living that could be seen over the next twenty years. Much of that was due to America's unique position after a war that destroyed everyone else's manufacturing capabilities. But much WAS due to the education impact. The program produced over two million college graduates in a decade. The program's success cemented the idea that the one sure path to improving one's economic future involved a college degree. A college degree as a ticket to the middle class became a truism by the 1970s. As branding creeped into the market, an elite college degree as a ticket to the upper class became a movie trope in the 1980s. An elite college degree as a shot at Internet scale millions or billions became a motivation by the late 1990s.

Thirty years later in 2023, America has millions of citizens who bought into the storyline, borrowed copiously to obtain a degree (though many were scammed into curriculums that created real-life debt and no legitimate diploma whatsoever…) and see no sign of a payoff in their career prospects. In essence, multiple generations of workers all came to the same conclusion at the same time -- at best, they misjudged the market and over-invested in a under-performing product. At worst, they were swindled -- by their guidance counselors, by their parents and by their schools. Yet the swindle continues because now, there is not only concern about the loss of upward mobility, there is fear of downward mobility as businesses attempt to outsource and "gigify" work. In reality, the career lottery odds worsened but individuals focus on the only perceptible rung of hope above them rather than the perceived chasm beneath them.

A cynic might argue the resulting situation works perfectly to suit the needs of the "university / banking industrial complex." Universities are happy because they continue to manage ever-more expensive institutions requiring more and more highly paid administrators who have zero impact on teaching and the elite institutions continue to hold unmerited influence in the larger society. The banking industry is happy because while the government took over administration of direct federal loans, a large percentage of students still rely upon private loans and educational debt still enjoys special protection from elimination via bankruptcy. As a result, banks are able to capture long term revenue streams from students taking on loans that may take 30 years to pay back. The banks win because even if the student cannot escape the STUDENT debt to take on OTHER debt for cars and homes, hey -- I'm first, I already have a thirty year lock on their wallet.

Correcting the Market Failure in Higher Education

If higher education is a textbook market failure, what can correct the failure? Or failures? The first step is to identify the failures.

Opaque Pricing of Tuition - Tuition rates fail to quantify the proportion that goes directly to classroom teaching. As an example, here are some semester tuition rates at a mix of engineering schools: MIT = $28,795, Washington Univerisity = $29,710, Purdue = $14,397, Missouri Science & Technology (Rolla) = $17,200. Assuming a Calculus class is 3 credits or one-sixth of a semester courseload, that class costs $4799 at MIT, $4951 at Washington University, $2399 at Purdue, $2866 at Missouri S&T. Are the calculus lectures at WU or MIT going to be worth $2552 more than the lectures at Purdue? No. Your experience will be nearly identical, sitting in a hall with 100 other students in your section 3 days per week with probably four big exams throughout the semester. Certainly the material won't be any different. So how far into the curriculum do you have to go to see a payoff for that premium in what actually reaches the classroom? It is impossible for a prospective student to make an informed decision about the likely educational value delivered just based on class hour credit costs.

Supply Constraints - The supply of available seats in colleges doesn't follow normal behaviors for supply as a function of available resources and demand. First, part of the demand for attending an elite school IS the limited seating. If five thousand people graduated from MIT engineering school per year instead of 1300, the cache associated with entry and graduation would be diminished by some unmeasurable yet real amount. No dean wants to experiment with a school's hallowed reputation by rapidly shifting out that supply curve with groundbreaking strategies. (MIT and others have generated open courseware that allows anyone to sit through entry level classes in math, physics, computer engineering, etc. Kudos to them for this but there's no degree program tied to this material.)

The other supply constraint is the historically poor pay of professors in college -- even those with tenure -- given common salaries for identical skills in Corporate America. If you have a Ph.D in materials science, do you want to earn $150,000 as a professor at a typical school AFTER incurring four extra years of debt or would you prefer to make $110,000 to $150,000 in a corporate job that also pays bonuses and has a track to middle management jobs paying much more? Unless universities and their funding sources re-prioritize spending and put more into classroom professors, it is impossible to shift the supply curve to the right using current teaching delivery methods.

Opaque Pricing of Loans -- It is a cruel result of the operation of the university / banking industrial complex that for many, the FIRST loans obligations they incur are the EASIEST to obtain, pose some of the WORST economic payoffs (other than a new car) and are nearly IMPOSSIBLE to escape -- FOR LIFE. This is not an accidental consequence. It's likely part of the design. Even as a college student in the latter 1980s, I remember seeing major banks camped out every week in the common area of the campus bookstore with card tables and sign-up sheets trying to get students to sign up for credit cards. At first, I thought -- What a wicked strategy, get 'em addicted to credit early before some other bank signs them up. Later, it occurred to me -- Suckers! You're already too late. The banks that lent them money for tuition already have first dibs on their wallet for YEARS.

Given the uncertain relationship between obtaining a degree and seeing an identifiable jump in earnings, students really cannot comprehend the risk they are taking on the value of the good versus the debt costs being incurred. Borrowers might be more aware now but it seems obvious the vast majority were NOT aware of the stipulations in bankruptcy law that make student debt virtually impossible to expunge. The cost of credit issues from unescapable student debt will cripple credit scores and inflate the cost of anything purchased on credit for life.

Rebranding of Vocations -- It's likely for most Americans, the word vocation has one of two possible connotations. A vocation is either a calling to some career of low-paid but saintly work like social work or religious orders OR a vocation is trade work performed by someone matching the classic stereotype who arrives at your house looking like a combination of Chris Farley and Al Borland. These are the guys -- you remember them -- who seem to start slipping on the rungs in school as early as eighth grade, then took shop classes in high school instead of Geometry and might have been at graduation or might not have. That stereotype likely drove many people INTO a "college track" who were not truly suited for college material, adding to the pool of people sucked in by legitimate schools or scam schools like DeVry that now carry thirty year debt loads they cannot escape.

More importantly, that bias has produced a tremendous shortage of skilled workers in nearly every trade. This affects construction, remodeling, repair and manufacturing industries that CANNOT outsource work overseas. If you want your house remodeled, the work HAS to be performed in your house, not in Mumbai. This misallocation of labor out of trades has shifted supply curves of virtually every industry UPWARD, raising prices and reducing supply, contributing to much of the inflation being experienced today. Not everyone can be a CEO, Vice President, Senior Manager, etc. America's general "jackpot" mentality about wealth versus work has poisoned the "brand" of trade work and destroyed the supply of available workers. It needs a positive rebranding. There is good money to be made in trade work and the labor is worthy of respect. The analytical skills and hands-on dexterity of a mechanic, carpenter or machinist are not to be looked down upon. Spend an hour watching car repair diagnostics on YouTube then ask yourself how many people in your circle can comprehend the subsystems and diagnostics of a modern car then actually go in and fix something.

Affirmative Action? -- The initial list of market failures began with the fact that the college market doesn't match up ubiquitous units of college education with ubiquitous consumers at the going price. The supplier individually selects each consumer, then individually prices the product per consumer based upon multiple criteria. Ah, those criteria… Academic ability? Certainly. Financial resources? Absolutely. High school activities? Already, things get dicey. Does the lacrosse player get in over the kid who worked as a bagger part time? Child of an alumnus? Why should that matter? Maybe the college hopes the alumnus is wealthy and might be able to pay full freight OR maybe the alumnus might be really wealthy and might want to donate a building. Member of a particular race? BOOM. Now we have blowback. And we have the opportunity for political factions to pit one group against another.

The Harvard and UNC cases driving the affirmative action decision were crafted by the plaintiff to pry affirmative action policies aimed at correcting historical discrimination against African-Americans out of public and private institutions by claiming affirmative action policies FOR one group INHERENTLY discriminate AGAINST other groups. In the Bakke case of 1978, the court previously eliminated quotas implemented as explicit numbers or percentages for implementing affirmative action but held race could be one of multiple factors considered for admission. Subsequent suits tested this interpretation which was affirmed as binding precedent as recently as 2003.

From a market standpoint, what problem with supply and demand can affirmative action solve? If it cannot solve that problem, what other mechanisms exist?

In a perfect market with hundreds of universities selling identical college experiences with identical probabilities of impacts on career arcs and earnings, it seems intuitive that affirmative action would not be required. Somewhere, demand for a college degree (driven by its intangible demand by the student and subsidized by the availability of loans) would trigger incentives to incrementally increase supply, the student would take the seat and the market would "work." In the imperfect market, some college educations are deemed more valuable than others, their supply is artificially constrained, and the supplier gets to hand pick every buyer. That hand selection process already discriminates on other criteria that serve institutional goals (discounts for children of faculty help retain faculty at below market salaries, admittance for alumni help bolster contributions to the school's coffers, etc.).

It isn't clear a political or legal solution to this problem exists. The problem is that a significant number of people in a particular class want the perceived benefits of a degree from elite institutions whose elite reputations are significantly based upon EXCLUSIVITY with criteria that have (consciously or inadvertently) consistently EXCLUDED that class. The court ruling eliminated the use of measures that could break that logical loop. It is possible the only alternative is a change in branding of other institutions. Instead of elites like Harvard, Yale, Penn State, etc. being viewed as

• a $200,000 four-year gamble
• with a 10 percent chance at a $300,000/year career
• with a 50 percent chance at a $140,000/year arc
• with a 40 percent chance of a $100,000/year arc

Instead you can go to a school like X, Y or Z that are more focused on value delivered to the classroom and

• only gamble $80,000 over four years
• have a 10 percent chance at a $250,000/year career
• have a 45 percent chance at a $160,000/year career
• have a 45 percent chance at a $100,000/year career

The expected values there are $140,000/year from the elite school with a $200,000 debt load or $117,000/year with only $80,000 in debt. Sure, the elite school still looks better if those odds are correct but if the actual educations minus the brand are identical, is the debt premium worth it? Today, not enough students are asking that question -- and that question is worthwhile to consider regardless of minority status.

Debt Relief? -- If the idea that a decades long market failure has misled consumers into overinvesting in college educations is contemplated, is a trillion dollar payoff of some of that debt a suitable remedy for the failure? Does it undo the prior harm? More importantly from an economic perspective, does a payoff correct the forces that created the failure, merely halt the feedback cycle for a few iterations or does it actually exacerbate them? This is essentially a question of moral hazard. The simplest microeconomic answer is a payoff individually helps borrowers but doesn't alter the incentives of the market going forward. That's not an encouraging result from spending one trillion dollars.

At a macroeconomic level, the value to the economy of a payoff involves more complexity and analysis of economic feedback cycles. When the plan was proposed, the US economy was in the midst of a "lockup" resulting from shocks to the labor force and normal supply and demand of nearly everything due to lockdowns and subsequent work from home adjustments. At that point in time, a Keynesian strategy for avoiding a complete economic lockdown was to stimulate spending and ensure continuity of cashflow through the economy. The minute money stops moving, the economy contracts exponentially.

At that point in time, the CARES act passed in 2020 had already injected nearly $2 trillion dollars into the economy, partly through tax rebates directly to citizens and partly through the Payroll Protection Plan (PPP) which passed $349 billion to "small businesses" so they could continue making payrolls for their employees rather than laying them off. Another $46 billion was given to airlines, cargo carriers and industries deemed critical to national security.

Starting with the assumption that some portion of individuals with college debt were likely out of work and unable to make payments, college debt relief was a small leap from other measures enacted to extend unemployment insurance, prevent evictions for non-payment of rent, etc. The two key questions were then / are now: 1) does the economy need another $1 trillion dollars in stimulus? 2) is redirecting cash in the economy by having the government zero out $1 trillion in individual debt with new government debt while freeing millions of individuals to generate spending in other sectors of the economy the most effective way to achieve that stimulus?

Honestly, any answers to those questions have nothing to do with the problem in higher education. They involve larger macroeconomic strategies that are fraught with politics and outcomes which are even harder to prove than they are to predict. The bright line ruling set down by the court in its decision virtually assures a similar payoff will not be attempted as a regulatory effort and a legislative solution has zero chance of passage in Congress.

Back to the Courts

The debt relief conflict was brought to the foreground by the pandemic, by a concern that a generation already saddled with significant monthly loan payments and facing extended bouts of unemployment would either a) default on loans to banks or b) miss rent payments to landlords, generating immediate downward consequences for themselves and the landlord who would lose rent AND likely have difficulty filling the unit with another tenant drawing from the same demographic owing on student loans.

The decision to forgive a trillion dollars in federal student debt and the decision by the Supreme Court to block that decision are both political. The decision to forgive the debt stemmed from powers laid out in the HEROES act passed in 2003. That law was not a Swiss army knife bill covering a multitude of military and economic powers for any emergency. The literal title of the legislation was the Higher Education Relief Opportunities for Students Act. The first paragraph of the act states the purpose:

Higher Education Relief Opportunities for Students Act of 2003 - Authorizes the Secretary of Education to waive or modify any requirement or regulation applicable to the student financial assistance programs under title IV of the Higher Education Act of 1965 as deemed necessary with respect to an affected individual who: (1) is serving on active duty during a war or other military operation or national emergency; (2) is performing qualifying National Guard duty during a war, operation, or emergency; (3) resides or is employed in an area that is declared a disaster area by any Federal, State, or local official in connection with a national emergency; or (4) suffered direct economic hardship as a direct result of a war or other military operation or national emergency.

Biden Administration officials looked at clause #4 and said a pandemic killing a million US citizens and triggering TWENTY THREE MILLION job losses certainly should count as a national emergency and indeed a NATIONAL EMERGENCY was declared by the prior administration on March 30, 2020. There are definitely millions of workers owing money on student loans who could drop a rung on their career ladder by not only losing a job but falling behind on college loans. To the extent that some share of these borrowers were victims of trade school frauds, that certainly reflected a situation in which prior failures by the Department of Education to manage those institutions and those borrowing schemes placed a responsibility on the DOE to rectify that failure. And certainly, if those debts could be erased, that might be a really attractive carrot for that demographic in upcoming elections.

The Supreme Court's majority decision starts off by identifying the court's concern with the magnitude of interpretation exercised by the Secretary and whether the language of the act cited truly provided Congress' consent for such a decision to be made beyond Congress. Roberts writes:

The authority to “modify” statutes and regulations allows the Secretary to make modest adjustments and additions to existing provisions, not transform them. Prior to the COVID–19 pandemic, “modifications” issued under the Act were minor and had limited effect. But the “modifications” challenged here create a novel and fundamentally different loan forgiveness program. While Congress specified in the Education Act a few narrowly delineated situations that could qualify a borrower for loan discharge, the Secretary has extended such discharge to nearly every borrower in the country. It is “highly unlikely that Congress” authorized such a sweeping loan cancellation program “through such a subtle device as permission to ‘modify.’” Id., at 231.

Later, Roberts made the argument that the debate isn't a function of whether the relief is a suitable goal, the debate involves WHO is able to initiate such expensive decisions.

(b) The Secretary also appeals to congressional purpose, arguing that Congress intended “to grant substantial discretion to the Secretary to respond to unforeseen emergencies.” On this view, the unprecedented nature of the Secretary’s debt cancellation plan is justified by the pandemic’s unparalleled scope. But the question here is not whether something should be done; it is who has the authority to do it. As in the Court’s recent decision in West Virginia v. EPA, given the “‘history and the breadth of the authority’” asserted by the Executive and the “ ‘economic and political significance’ of that assertion,” the Court has “ ‘reason to hesitate before concluding that Congress’ meant to confer such authority.” 597 U. S. ___, ___ (quoting FDA v. Brown & Williamson Tobacco Corp., 529 U. S. 120, 159–160).

Those two comments from Roberts must be analyzed as a set and compared with other recent responses to crises. The best example? How about the events of 2008? The Housing and Economic Recovery Act passed on July 24, 2008 created a new agency FHFA and delegated authority to the Treasury to prop up Fannie Mae and Freddie Mac, only capped by the government's total "borrowing cap" which the act raised by $800 billion. However, Treasury Secretary Paulson had already acted eleven days prior by publicly committing to injections of BILLIONS of dollars into the two government sponsored entities to protect TRILLIONS in securities on their books from collapsing after their stock shares dropped 45% in a week. No objection there. Who benefitted? Two GSEs and multiple TBTF banks.

How about the events of September 8 through September 21, 2008? New York Fed Chairman Timothy Geithner and Treasury Secretary Hank Paulson spent DAYS on the phone demanding merger talks and multi-billion dollar asset shuffles between TBTF banks with zero input from Congress from an antitrust perspective. Did Congress previously grant the Treasury Secretary the power to demand the merger of two $200 billion dollar banks? On a conference call? While highly distasteful, if one believes the story told by those in the room where it happened, the government had no choice - immediate action was required to prevent a lockup of the entire economy. The primary beneficiary? All of us (probably). The immediate beneficiary? The TBTF banks. Any objection from the courts? Nope.

In a final coup de grace, Roberts states the court must assume Congress meant to retain the power to make such sweeping changes to a law or regulation to itself and that any Secretary attempting to justify such a large alteration must be able to cite specific language written by Congress providing that power. The court justified this decision based on a 2013 case in which the Supreme Court ruled authority granted to the EPA to regulate greenhouse gases jeopardizing public health DID apply for power plants but did NOT allow it to regulate vehicle emissions, even though the original legislation didn't mention power plants specifically either.

Burwell, 576 U. S. 473, 485. All this leads the Court to conclude that “[t]he basic and consequen- tial tradeoffs” inherent in a mass debt cancellation program “are ones that Congress would likely have intended for itself.” West Virginia, 597 U. S., at ___. In such circumstances, the Court has required the Secretary to “point to ‘clear congressional authorization’ ” to justify the challenged program. Id., at ___, ___ (quoting Utility Air Regulatory Group v. EPA, 573 U. S. 302, 324). And as explained, the HEROES Act provides no authorization for the Secretary’s plan when examined using the ordinary tools of statutory interpretation—let alone “clear congressional authorization” for such a program. Pp. 19–25.

Again, go back and read about the events in 2008. The idea that every eventuality can be foreseen in advance and explicitly allowed or disallowed in the language of a law written by special interests and run through dozens of legislative gauntlets populated by Representatives and Senators whose average expertise couldn't land a Director level position in Corporate America is laughable. The only principle involved in this decision is the Supreme Court's willingness to leverage ambiguity where it supports their aims and use it as a lever to pry out policy not in sync with their conservative values.

WTH