Friday Edition

The war the media's not talking about. Plus: Is "Call of Duty" really to blame for mass shootings?

1. Government Student Loan Programs Are Broken

As politicians argue about the merits of forgiving student loans, let's not ignore the federal system that played a big role in the current crisis. (National Bureau of Economic Research)

A new NBER study from researchers at the University of Chicago and University of Utah:

Starting in the late 1990s, policymakers weakened regulations that had constrained institutions from enrolling aid-dependent students. This led to rising enrollment of relatively disadvantaged students, but primarily at poor-performing, lowvalue institutions whose students systematically failed to complete a degree, struggled to repay their loans, defaulted at high rates, and foundered in the job market. As these new borrowers experienced similarly poor outcomes, their loans piled up, loan performance deteriorated, and with it the finances of the federal program.

Some notable data points from the study:

  • From 2000 to 2020, the number of Americans with federal student loans more than doubled from 21 million to 45 million.

  • Over the same time period, the total amount owed by student borrowers increased from $387 billion to $1.8 trillion, outpacing other household debt.

  • Before payments were frozen in 2020, 1 million students defaulted annually, and many others struggled with repayments.

  • Since 2000, enrollment at for-profit colleges (which typically have high default and low repayment rates) has tripled, and community college students have tripled their student loan borrowing rates.

  • The student loan program is the most costly federal education subsidy, lacking means testing and effective guardrails.

Other studies have found links between federal student loan aid and rising college tuition.

Chart: Chartr

The latest: The Biden administration announced $7.7 billion more in student loan cancellation last week, raising the total cost to $405 billion in lost revenue, per AEI’s Student Debt Forgiveness Tracker.

  • More than a dozen GOP-led states have filed lawsuits aimed at blocking a student debt relief plan rolled out last year by President Biden.

Chart: American Enterprise Institute

2. Some Wars Are Bigger Than Others

The violence and chaos in Sudan is on par with the wars in Ukraine and Gaza, but it's receiving much less attention. (The Economist)

Chart: The Economist

A new analysis from The Economist:

Data provided by Chartbeat, an analytics firm, show that news coverage of Sudan from the past year peaked in April 2023, at the start of the war, with some 7,000 new articles published by around 3,000 media companies in 70 countries. Since the beginning of 2024 it has averaged just 600 per month. By comparison, coverage of the conflicts in Gaza and Ukraine has not dipped below 100,000 stories per month for either place.

In recent months, the U.S. has been flooded with news on the Gaza War and countless pro-Palestine protests.

Bubba’s Two Cents

The Ukraine and Gaza conflicts are in the spotlight due to America's close ties to Israel and tensions with Russia. But there's almost certainly a bandwagon effect taking place, too, with many campus protests fueled by the high visibility of these issues.

3. Suing Our Way Out of Our Problems

Holding businesses accountable for societal issues isn't anything new, but a recent wave of lawsuits are testing the limits. (NBC News)

Climate change: Vermont's Climate Superfund Act, passed by the state legislature earlier this month, would require big oil and high-emission companies to pay for damages caused by global warming.

  • NBC News reporter Maura Barrett: “The amounts owed would be determined based on calculations of the degree to which climate change contributed to extreme weather in Vermont, and how much money those weather disasters cost the state.”

  • It’s worth noting that the United States' combined carbon emissions footprint is much lower than that of China.

Mass shootings: The families of Uvalde school shooting victims last week filed a lawsuit against Meta and Activision, developer of the “Call of Duty” military video game franchise.

  • According to the lawsuit, Meta (which owns Instagram and Facebook) and Activision, “knowingly exposed the Shooter to the weapon, conditioned him to see it as the solution to his problems, and trained him to use it.”

Car thefts: Earlier this year, some Kia and Hyundai owners began receiving portions of a $145 million settlement against the Korean carmakers.

  • The class action suit claimed Kia and Hyundai made their vehicles more susceptible to theft by not installing immobilizers, anti-theft devices that prevent engines from starting without a code from the vehicle's smart key.

Bubba’s Two Cents

Dealing with problems like climate change, mass shootings or crime is daunting. Many Americans, desperate for solutions and scapegoats, turn to the courts. The legal system channels their frustrations and offers someone to blame. Is it effective? Is it progress? That’s up for debate.

4. Young Guy Employment Woes

According to new research from a center-right think tank, unemployment insurance system has played a role in young men’s plummeting employment rates. (Business Insider)

Chart: Business Insider

Big picture: Only 86% of men aged 25-54 were employed as of April 2024, down from about 95% in the 1950s and 1960s.

  • For men aged 16-24, only 52% were employed, down from over 60% decades ago.

Education is a big piece of the economic puzzle: Fewer men attending college reduces their economic prospects.

  • Men now make up 41% of college enrollments, down from nearly 60% in 1970.

  • Men drop out of college faster than women, potentially leading to two female graduates for every one male within five years.

  • College-educated men earn a median of $900,000 more over their lifetimes compared to those with only a high school diploma.

A new analysis from the Niskanen Center: The unemployment insurance "experience rating" system raises taxes for employers with higher layoff rates, which discourages hiring, particularly for young men seen as higher risk.

  • After Washington state introduced experience rating in 1985, the unemployment rate for men aged 15-25 rose by 2.7 percentage points.

Niskanen Center senior employment-policy analyst Matt Darling:

Firms do not react to experience rating merely by reducing layoffs, but by pursuing ways to avoid layoff risk, including hiring contractors instead of employees, encouraging voluntary quits, and discouraging claims for unemployment benefits. Most concerning, the system pushes firms to avoid young and inexperienced workers, who are just establishing their careers.

5. Food for Thought

In yesterday’s edition of Bubba News, we highlighted how Americans, especially young Americans, have a pretty pessimistic outlook on life in the U.S. (despite the fact that by many metrics people today are better off than ever).

Chart: The Washington Post

Well, this new Washington Post chart (citing YouGov data) is the flip side of the coin.

Chart: The Washington Post

Bubba’s Two Cents

People who believe the best music came out during their youth, and those who think they're living in the worst times ever, both suffer from the same basic lack of perspective. We all think we're the center of the universe, but stepping back a little shows us we're just a small speck in a vast ocean of time and history.

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