Obama On Nationalizing Industry: 'Let's Just Cut Out The Middlemen'

Craig Bannister
By Craig Bannister | October 18, 2012 | 1:04 PM EDT

In each of the first two debates, Pres. Obama bragged about how he “cut out” the “middlemen” of the private sector by taking over the student loan industry.

In this week’s debate, Obama touted his success in taking $60 billion away from private businesses (“middlemen,” as he calls them) by nationalizing the student loan industry:

“We've expanded Pell Grants for millions of people, including millions of young women, all across the country. We did it by taking $60 billion that was going to banks and lenders as middlemen for the student loan program and we said, let's just cut out the middleman. Let's give the money directly to students. And as a consequence, we've seen millions of young people be able to afford college, and that's going to make sure that young women are going to be able to compete in that marketplace.”

Obama was answering a question about how he plans to “rectify inequalities in the workplace” if re-elected.

Of course, by cutting out banks and lenders, the administration’s takeover of the student industry “cut out” private sector businesses, employers, and a part of the free market economy.

Obama’s latest “middlemen” remarks mirror comments he made in the first debate when he gave an example of the type of thing “that requires some federal support”:

“When it comes to making college affordable, whether it's two-year or four-year, one of the things that I did as president was we were sending $60 billion to banks and lenders as middlemen for the student loan program, even though the loans were guaranteed. So there was no risk for the banks or the lenders, but they were taking billions out of the system.

“And we said, "Why not cut out the middleman?" And as a consequence, what we've been able to do is to provide millions more students assistance, lower or keep low interest rates on student loans. And this is an example of where our priorities make a difference.”

So, “Why not cut out the middleman?”

Well, for one reason, because these so-called “middlemen” are employers, taxpayers, and private citizens who need to earn a living. And, for another, competition in a free market is actually a good thing.

And, of course, one has to wonder: who'll be the next "middlemen" they'll cut out?

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