Coyote Blog

This year, US oil refiners will pay more than $6 million in fines to the EPA for not using a product that doesn't exist.   Refiners are required to blend at least 6.6 million gallons of cellulosic ethanol this year, or pay a fine to the EPA of $1 per gallon of this target not met.

But here is the funny part - no cellulosic ethanol exists for refiners to buy, even by the EPA's own analysis.  The product simply does not exist in any more than pilot plant / experimental volumes.  But that is not stopping the EPA from imposing the fines, which will get passed on into gasoline prices.

Here is the saddest part, from a defender of the cellulosic mandates:

Next-generation ethanol advocates say that small-scale commercial production of the fuel is just around the corner. When the EPA proposal was released yesterday, one advocate blamed the oil and gas industry for slow progress.

“America’s advanced and cellulosic ethanol industry is rapidly progressing with many technologies proven and biorefinery projects shovel-ready. Yet, advanced biofuel producers continue to sail into a head wind created by tax policy favoring oil and gas,” said Brooke Coleman, executive director of the Advanced Ethanol Council, in a statement.

What in the hell are they talking about?  Their plants get their construction subsidized with public financing, the oil industry is required to buy their product, trade barriers exist to limit foreign competition.  These guys are not fighting a headwind, they are trying to hit a golf ball downwind in a hurricane and they still can't clear the lady's tee.

My favorite reporter interviews my favorite Presidential candidate

Link if the embed is broken

Update: Awesome

“The fact is, I can unequivocally say that I did not create a single job while I was governor.”...

“Don’t get me wrong....We are proud of this distinction. We had a 11.6 percent job growth that occurred during our two terms in office. But the headlines that accompanied that report—referring to governors, including me, as ‘job creators’—were just wrong.”

Allowing this kind of hell to exist has got to be one of the worst systematic civil rights violations that still exist in this country

The U.S. Department of Justice recently released its first-ever estimate of the number of inmates who are sexually abused in America each year. According to the department’s data, which are based on nationwide surveys of prison and jail inmates as well as young people in juvenile detention centers, at least 216,600 inmates were victimized in 2008 alone. Contrary to popular belief, most of the perpetrators were not other prisoners but staff members—corrections officials whose job it is to keep inmates safe. On average, each victim was abused between three and five times over the course of the year. The vast majority were too fearful of reprisals to seek help or file a formal complaint.

Just to calibrate, the total number of sexual assaults reported outside of prisons in the US is something like 190,000 a year.

Sexual violence is not an inevitable part of prison life. On the contrary, it is highly preventable. Corrections officials who are committed to running safe facilities train their staff thoroughly. They make sure that inmates who are especially vulnerable to abuse—such as small, mentally ill, and gay or transgender detainees—are not housed with likely perpetrators. And they hold those who commit sexual assaults accountable, even if they are colleagues.

But many corrections administrators are reluctant to make sexual abuse prevention a top priority, preferring to maintain the status quo rather than acknowledge the role their own employees play. Others are actually fighting reform efforts, claiming, in spite of the evidence, that sexual violence is rare.

This resistance is reflected in the slow implementation of the Prison Rape Elimination Act, which Congress unanimously passed in 2003. The law mandated binding national standards to help end sexual abuse in detention. But almost eight years later, the Justice Department has yet to promulgate final standards.

Take California for example, where the prison guard union is among the most powerful in the country.  Given how far in the tank legislators in that state are for their public unions, it is hugely unlikely this will get addressed any time soon

The Obama administration has abandoned even the pretense of not being in the tank for its union supporters.

First, it handed took ownership of GM away from secured creditors and gave it to the UAW.

Second was the NLRB over-reach in veto-ing plant relocation decisions by Boeing

More recently came the rules changes for quick, midnight unionization elections to prevent target companies from being able to tell their side of their story

Finally, comes news that the Obama Administration worked to trash pensions of non-unionized auto workers while protecting pensions of union workers.

I have written any number of times on the technocratic-statist urge to overturn emergent order that is created bottom up in favor of imposing their own top-down vision of how society should run.  The following is from David Mamet via Mathew Shaffer (hat tip Maggies Farm) and is a nice synopsis of this mindset

The problem is that “the Left today is essentially an elitist movement, and it has invested a lot of time and money in the idea that they know better.” Elites have been led to think “by getting the grades, and getting into good schools and think-tanks and government positions that they are fit” to reorder society more rationally. But this requires first demolishing the order produced by the organic processes of tradition, democracy, and markets — the culture. Why are some so susceptible to this fatal conceit? “They get out of elite schools being told nothing but, ‘You’re the best.’” Hubris — a dramatist’s area of expertise.

More good stuff, from the same interview

“There is no secret knowledge. The Federal Government is really the zoning board writ large,” he writes. What does that mean? He explains to me: “Mark Twain famously said, ‘God made the Idiot for practice, and then He made the School Board.’ The zoning board is like that — they’re just a bunch of people with power. Some are good, some are bad. But they gotta be watched like hawks, because power corrupts.” So “secret knowledge” is a Hayekian insight wrapped up like a Talmudic paradox. The secret is there is no secret — no special caste has the knowledge or goodness, inaccessible to the rest of us, to order society. Hence Mamet’s skepticism of technocracy and his preference for order created from the democratic and disaggregated processes of the marketplace.

And here is one more nice quote from Mamet, a while ago in the Village Voice

in the abstract, we may envision an Olympian perfection of perfect beings in Washington doing the business of their employers, the people, but any of us who has ever been at a zoning meeting with our property at stake is aware of the urge to cut through all the pernicious bullshit and go straight to firearms.

Democrats are labeling any plans that would cut or even flatten Federal spending as the "austerity" option.  They use the word austerity to imply an unusual and radical reduction in spending which evokes proposed plans in places like Greece that has all the government workers marching in the street.

But Greece is trying to find a way to move to a fiscal regime they have never even experienced, not in any of our lifetimes and maybe never.  In contrast, the US merely needs to move to a place it was way back in about 2006.  Yes, that's right, "austerity" is returning to the level of government spending we had five years ago.  And we all remember what a blighted time that was, a veritable Mad Max desolation relieved only by Obama arriving like the Postman from the David Brin novel (or the execrable Costner movie, if you prefer).

Via Cato:

Connoisseur

I try not to get into the voting rules arguments between Republicans and Democrats because at their heart, most of these are totally political.  However, I am fascinated by the claim by Democrats that producing an ID to vote discriminates against blacks, presumably because obtaining such ID puts an undue asymmetric burden on African-Americans vs. whites.

This seems like a crock to me -- I am not sure why obtaining an ID is harder for blacks than whites, though I will observe that the highest profile black man in the country had trouble producing his birth certificate so maybe there is some racial thing here I don't understand.

But if we take the claim at face value, why aren't the TSA and airports being sued by the NAACP?  After all, there is an ID entry requirement and if that is discriminatory for voting, isn't it also discriminatory for flying.  Why isn't the DMV, or the highway department being sued of its ID requirement?  Ditto the federal government, which required ID to enter a federal building.

Update: James Taranto has similar thoughts.  He thought of several I missed, including requirements to show ID (part of the I-9 form) in order to get a job.

Obama's Department of Education has been issuing a series of new rules to colleges that accept government funds (ie pretty much all of them) that going forward, they will be required to

• Expand the definition of sexual harassment, forcing it to include even Constitutionally-protected speech.  Sexual harassment will essentially be redefined as "somehow offending a female."
• Eliminate traditional protections for those accused of sexual harassment under these new definitions.  The presumption of innocence, beyond a reasonable doubt guilt standards, the ability to face and cross-examine one's accuser, and the right of appeal are among centuries old common law traditions that the DOE is seeking to eliminate in colleges.

Unfortunately, this is a really hard threat to tackle.  Most of those concerned with civil rights protections outside our small libertarian community are on the left, and these same people are often fully vested in the modern feminist belief that all men are rapists.  It also puts libertarians in the position of defending crude and boorish speech, or at least defending the right to that speech.

But at the end of the day, the DOE needs to be forced to explain why drunk and stupid frat boys chanting crude slogans outside the women's center on campus should have fewer rights as accused than does a serial murder.

Michael Barone has more today in the Washington Times:

But more often they involve alleged offenses defined in vague terms and depending often on subjective factors. Lukianoff notes that campus definitions of sexual harassment include "humor and jokes about sex in general that make someone feel uncomfortable" (University of California at Berkeley), "unwelcome sexual flirtations and inappropriate put-downs of individual persons or classes of people" (Iowa State University) or "elevator eyes" (Murray State University in Kentucky).

All of which means that just about any student can be hauled before a disciplinary committee. Jokes about sex will almost always make someone uncomfortable, after all, and usually you can't be sure if flirting will be welcome except after the fact. And how do you define "elevator eyes"?

Given the prevailing attitudes among faculty and university administrators, it's not hard to guess who will be the target of most such proceedings. You only have to remember how rapidly and readily top administrators and dozens of faculty members were ready to castigate as guilty of rape the Duke lacrosse players who, as North Carolina Attorney General Roy Cooper concluded, were absolutely innocent.

What the seemingly misnamed Office of Civil Rights is doing here is demanding the setting up of kangaroo courts and the dispensing of what I would call marsupial justice against students who are disfavored by campus denizens because of their gender or race or political attitude. "Alice in Wonderland's" Red Queen would approve.

As Lukianoff points out, OCR had other options. The Supreme Court in a 1999 case defined sexual harassment as conduct "so severe, pervasive, and objectively offensive, and that so undermines and detracts from the victims' educational experience, that the victim-students are effectively denied equal access to an institution's resources and opportunities." In other words, more than a couple of tasteless jokes or a moment of elevator eyes.

Women'g groups all the time say things like "all men are rapists."  That's pretty hostile and degrading to men.  My guess is that somehow this kind of gender-hostile speech will not be what gets investigated by these kangaroo courts.

I wrote about related events at Yale here.

This is pretty cool, if they can pull it off.  Though I am not sure getting focus right is really the issue with most photographers any more.  It would be interesting if you could change the depth of field, though.

NSFW:  Big Book of Breasts, now in 3-D

Had to laugh when I saw that.  I was actually looking for this book on Case Study Houses.

I am afraid we are on a path to thoroughly eviscerating the Fourth Amendment simply because police forces find it too big of a hassle to comply.  Just look at almost every case of abuses of search and seizure rules or of missing search warrants and you almost never see a time-based urgency that is often used as an excuse to end-around the rules.   What you almost always see is just, well, laziness.

Here is yet another example (bold added):

Now comes the news that the FBI intends to grant to its 14,000 agents expansive additional powers that include relaxing restrictions on a low-level category of investigations termed “assessments.” This allows FBI agents to investigate individuals using highly intrusive monitoring techniques, including infiltrating suspect organizations with confidential informants and photographing and tailing suspect individuals, without having any factual basis for suspecting them of wrongdoing. (Incredibly, during the four-month period running from December 2008 to March 2009, the FBI initiated close to 12,000 assessments of individuals and organizations, and that was before the rules were further relaxed.)

This latest relaxing of the rules, justified as a way to cut down on cumbersome record-keeping, will allow the FBI significant new powers to search law enforcement and private databases, go through household trash, and deploy surveillance teams, with even fewerchecks against abuse. The point, of course, is that if agents aren’t required to maintain a paper trail documenting their activities, there can be no way to hold the government accountable for subsequent abuses.

Freedom dies because we couldn't be bothered with all the work to protect it.

PS-  why is it no one wants to address any of the paperwork hassles in starting construction or opening a restaurant or getting a liquor license or starting a taxi service or any number of other private enterprises, but the government jumps right on the task of streamlining the work it takes to spy on me.

My column this week in Forbes elaborates on a theme I discussed last week in this blog.

I am not a big fan of prohibition, or the income tax (16th Amendment) before it, but in some sense these come from a better time.  Instead of dealing with the Constitutional problems of these initiatives by having a series of judges stare at the Constitution with their eyes crossed until the problem disappears, they actually wrote and passed a Constitutional amendment.  The took the wording of the Constitution seriously.

Consider alcohol prohibition.  Today, would we even bother modifying the Constitution?  After all, we’ve driven a forty year war on drugs — with massive spending, highest in the world imprisonment rates, militarization of our police, and frequent slashes into the heart of the Fourth Amendment — with nary a hint of the need for a Constitutional Amendment.  In fact, in Raich, the Supreme Court ruled that medical marijuana legally (under state law) grown, sold, and consumed in California could still be prohibited by the Federal government under their Constitution powers to regulated interstate commerce.  It seems almost quaint today that we sought a Constitutional change for Prohibition.

I am not one for China-bashing (or Japan-bashing 20 years ago).  But it is interesting to consider just how sane and peaceful a country will be if it is dominated by 100 million men who can't get laid.

I am certain that I have made this mistake myself, but Kevin Drum is careless about using data just because it 1) is labeled in a way he thinks he understands and 2) it supports his pre-conceived notions.

He tries to use the above chart to make the point that Medicare is superior to private insurers because it is more "accurate."  Accuracy in claims seems like a good thing, but I started to wonder how it was defined in this study.

So I spent like 30 whole seconds clicking through to the study.  It turns out the data is based on surveys of doctors.  This chart is explained this way:

Description:  On what percentage of claim lines does the payer's allowed amount equal the physician practice's expected allowed amount?

So really, this chart is not a measure of insurance company accuracy, it is really a measure of doctor accuracy in estimating insurance company claims payment behavior, or perhaps of insurance company claims transparency.  Because Medicare pays fixed, published, below-market rates, and because they are so large, it is not at all surprising doctors are better at predicting what Medicare will pay on a claim.

In other words, doctors disagree with Aetna on claims more frequently than they disagree with Medicare?  Is this bad or good.  I have no idea.

But one could go further and say that another way of heading this chart, rather than "accuracy," would be "willingness of insurer to roll over and pay whatever the doctor asks for."

In the past, Drum and others on the Left have also bragged that Medicare's overhead is lower than private insurers.  These are all related issues.  Private insurers put more scrutiny on claims, which costs more in overhead and causes claims to get paid slower, but presumably results in lower claims payments and less fraud.

Medicare's approach may be net better (ie overhead savings could be larger than claims and fraud savings) or it could be worse, but this chart in isolation tells us nothing.

PS - this is not the first time I have found Drum running health care numbers that do not mean what he thinks they mean.

Kevin Drum seems upset that the US Government does not mandate paid time off for all US workers

The map below shows this starkly: the United States is virtually alone in not mandating any annual time off for employees, right along with such economic luminaries as Burma, Guyana, and Nepal. More charts on American overwork here.

I could take the same map and make this statement: "unlike such freedom-loving luminaries as Iran, Russia, Mali, and Chad, the United States government does not interfere in private decisions about vacation pay policies."

By the way, why is it for statists that the lack of a government mandate for something desirable is considered equivalent to the desirable policy being non-existent?  In fact, Kevin Drum himself says his employer has a good paid leave policy.  Wow, how could such a thing have happened without a government mandate?

Here are a couple of mansions in San Francisco, on of which was built by Charles Crocker of the "big 4" (including Sanford, Huntington, and Hopkins) who built the western half of the transcontinental railroad  (don't be fooled -- the railroad itself, forced years ahead of its time by government policy, was a financial mess.  The big 4 made their real money in the construction company that built the railroad, and in real estate and ancillary businesses at the railroad's terminus).

Note the thing that looks like a four-story high wall in the back corner of the near mansion. What is that?  Its a four-story high wall.  Crocker was ticked off the last building owner on the block did not sell to him.  So he built a "spite wall" on his property on three sides of the building to block its views.  Abusive, I suppose, and used by some to talk about what the rich could get away with in that era.  But consider that in the current era, Crocker would just go to the government and get it to condemn the building and hand the property to him, in the Kelo logic that he would pay more taxes on the property.   Rich people have more power today to abuse their relationship with government for the simple fact that the government has a lot more power to be commanded.

As I tell people all the time, if you want to limit the special powers the rich wield by influencing politics, the only solution is to limit the power of the government.

From this cool 360 panorama of San Francisco

I find it absolutely unsurprising that Paul Krugman was enthralled by the vision of a science that can be used by a few people to control the actions and futures of all humanity.  He said “I want to be one of those guys!”  I was captivated by the vision in the book as well, but my thought was always "how do we avoid these guys?"  The second two books were about how government planners used mind control to deal with humanity whenever individuals had the gall to circumvent their plans.  Lovely.

If I remember right, Asimov wrote the Foundation after reading the Rise and Fall of the Roman Empire.  The notion of how much of history is inevitable due to large forces (e.g. economics) vs. how much is due to the actions of individuals and what historians now call contingency (e.g. luck) is an endlessly fascinating thing to debate, and I found the Foundation books to be interesting thought exercises along these lines.  But it certainly didn't inspire my life's goals, any more than Dune made me wish for a religious jihad.

I can see the secret Second Foundation scratching their heads now in their secret lair (which turns out to be in the New York Times building in the middle of New York City but that's a spoiler from the third book).  The equations show right here that a trillion dollar stimulus should have kept unemployment below 8%....

Ages ago, I was an executive at Mercata, an Internet store whose strategy was to sell items whose price would go down as more people agreed to buy the item.  In theory, this creates an incentive for viral marketing, as anyone who buys has a financial incentive to get their friends to join in.

The company died for a variety of reasons, in part just because like many startups in that weird era of the late 90's, we just built up too many fixed costs too fast to reach breakeven in any reasonable amount of time.  We were also ahead of our time in some ways -- the model makes a ton more sense in the Facebook / social media age.

But we also failed, as did many Internet stores, because order fulfillment, product inventory, shipping, etc was and still is expensive.

Glenn Reynolds notices that a lot of folks (including Amazon in his link) are selling coupons.  This may be a blinding glimpse of the obvious to all of you, but the appeal of a retailer of selling coupons online is that they are virtually free to inventory, to fulfill, and to ship.   Think of it this way -- you want to compete online on price.  You can actually sell the physical stuff at a discount.  Or you can sell the coupon, which gives access to the customer access to the same discount but is much easier to fulfill.  It also lets you "sell" things you normally can't provide over the Internet, like a restaurant meal.

The model is not that compelling to me, because I shop online for the convenience rather than the price.  I buy some Groupon type coupons, but generally for things like restaurants rather than products.

When a loan company rewards delinquent customers with better rates and/or principle reductions, they get a lot more delinquency.

As read by Samuel L Jackson (hat tip Radley Balko)  Warning:  R-rated language.

Folks on the Left are the first ones to point out that people are overly obsessed with money.  Money (they would argue)  is far less important than, say, self-improvement.

So why is it that it is impossible for progressives to understand that someone might be willing to work for something other than money?  For the skills, or the experience, or the resume fodder, or even, in this case, for ego?

I don't write for Huffington, but I do write for Forbes.com which appears to be pursuing a similar model (mix of paid and unpaid bloggers).  You know how much money I get paid?  Zero.  Any time I get tired of writing for zero dollars, I can quit.  But I have not because I get lots of things out of the relationship -- a new audience, experience trying to meet a regular deadline (that's not as easy as it seems from the outside), and an ego boost.  Heck, far from feeling exploited, all the folks who have learned of my relationship with Forbes have thought I was lucky to have the opportunity.  And I am.

People blog for free all the time -- I have done it for 7 years (gulp!) at this site.   The author at the link seems to feel that the fact Huffington or Forbes makes money from our writing somehow makes a difference.  Why?  My web host makes more money from my blog than I do, but should I care?

Besides, my understanding is that CPM's on news-related sites run in the $10 range, plus or minus.  At Forbes, there are 2 ads on the page and my posts get 1000-4000 viewers (with a few outliers).  So that's, what, $20-80 at most and probably less? The five or ten bucks a week I might extract from them for my work is trivial compared the the other benefits I enjoy.  And I can't believe the average Huffpo unpaid blogger is really contributing a lot more.  Ariana may be making millions, but the incremental contribution of the 419th unpaid blogger to that is trivial.

Postscript:  By the way, the linked writer also displays one of the more abusive mindsets of the labor movement.  He implies that other progressives are essentially crossing a picket line by writing for free at Huffpo and should be ashamed of themselves.

That's a crock.  One or two folks declaring they are on strike does not suddenly obligate hundreds of others who like the relationship they have with the Huffpo to stop writing.  The author is essentially demanding a heckler's veto.

Often, the dominance of markets by bland and uninteresting mass-market products is blamed on capitalism.  This makes no sense to most business people, since if there really was a pent up demand for variety and smaller-batch products, someone would try to make money doing so.  One only has to look at the explosion of craft beers over the last 30 years to see this effect, and its one that is only being reinforced by modern technologies that allow lower costs for smaller batch production.

If one wants to put the blame anywhere, one might look at the government, where there is an interesting clash brewing on the Left between those who like local, small-batch products and the regulatory state the Left built.  For example, via Overlawyered

Homa Dashtaki [a producer of small-batch yogurt] was eager to demonstrate that her yogurt was safe and healthful, but complying with California regulations turned out to be not so easy. In fact, authorities told her that she would face possible prosecution unless she established a “Grade A dairy facility” employing processes more commonly found in factories. A highlight: she’d have to install a pasteurizer even though she made her yogurt from milk that was already pasteurized. What’s more, California law makes it illegal to pasteurize milk twice, so there went any hope of continuing her straightforward way of obtaining milk, namely bringing it home from a fancy grocery store.

Ms Dashtaki is pondering whether to move to another state, one whose rules allow for artisanal products. She would not be the first entrepreneur to flee the Golden State.

This is sort of like the old Mad magazine Spy v. Spy, but relabeled Left vs. Left.  Exactly the same dynamics are at work in organic farming as well as hand-crafted artisan toys (which are affected substantially by the recent toy regulations passed after the Chinese lead panic).

There are certain regulatory agencies where it is clear from the outset that most of the agency's activity is merely aimed at protecting their own jobs and power.

The one such agency I run up against are Alcoholic Beverage Commissions in various states, from whom one must obtain a liquor license.  In the type of small store we run, there are really only two things the state should care about, and even the second is a bit weak

• That we don't sell alcohol to underage kids
• That we don't allow alcohol consumption on the premises

But the liquor licensing process can be interminable.  In Arizona, for example, I have had my applications kicked back to me, which resulted in 2-month delays in the process, because I wrote an address as 1313 48th Pl.  rather than 1313 48th Place.  They spend incredible man-hours looking for nit-picky mistakes like this, and then kick it back so that the whole review process must begin again.  Many states and counties have a second layer of review, to make sure that your new competition is "needed" - after all, we wouldn't want to upset the position of incumbent businesses who are entitled to their market share and who make nice campaign contributions.

Each application has to have a drawing of the store layout and where one plans to put the beer.  If you want to move the beer at a later date, you have to get the state's approval.  (Bizarrely, the drawing in most states has to be by hand -- they will kick back an application with a CAD drawing or architect's drawing).  And don't get me started on the fact I have to be finger-printed by the FBI (so they can be sure I am not Al Capone) before a store I own can sell beer.

All this being said -- and I didn't mean to run on so long but liquor licensing just drives me nuts -- it is nothing to I won't repeat it all, but take this example:

a drug manufacturer must get approval for how much of a drug it plans to produce, as well as the timeframe. If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.

They have to get their production schedules approved?  What possible justification can there be for this?  But even more outlandish is the apparent drive to regulate drugs that have been on the market for over 70 years and have to date been relatively unregulated because they were on the market before the FDA got its current powers.   Why should a bureaucrat lose her job when there are still unregulated items out there?  Besides, some uneducated American might use these examples of safe, unregulated drugs to question the who regulatory mission!

Several drug shortages (e.g., concentrated morphine sulfate solution, levothyroxine injection) have been precipitated by actual or anticipated action by the FDA as part of the Unapproved Drugs Initiative, which is designed to increase enforcement against drugs that lack FDA approval to be marketed in the United States. (These drugs are commonly called pre-1938 drugs, referring to their availability prior to passage of the Food, Drug, and Cosmetic Act of that year.) Some participants noted that the cost and complexity of completing a New Drug Application (NDA) for those unapproved drugs is a disincentive for entering or maintaining a market presence.

I have heard several medical people joke that it would be tough to get aspirin through the FDA today if it were a new drug and not grandfathered.  Don't know if that is true, but it feels believable.

Every person considering student loans should make sure they understand what is in this post from Megan McArdle.  Americans are spoiled, to some extent, by non-recourse home loans (ie, unlike in the rest of the world, they can't come after assets to pay the loan beyond the house itself) and pretty generous terms for escaping credit card debt.  These cause us to forget that most other types of lenders out there are pretty hard-ass about actually, you know, getting paid back.

I never held any student debt, so I was not aware of many of the facts she provides, but my guess is that many people who do have student debts aren't that aware either.  Here is the most important part:

I don't know why Mystal thought I was only talking about federally guaranteed loans, or that I didn't understand that his debt had been sold to a collector, but there you are. If I had thought that he was talking only about federally guaranteed loans, I would simply have said "Mystal is dangerously deluded and needs to issue a correction immediately before someone gets a very harmful idea from his post."  Federal loans don't settle.  Period....

Private lenders have more incentive to settle, but not a great deal more. Most unsecured debt, like credit card balances, personal loans, and medical bills, can and will be settled for pennies on the dollar--as low as ten cents in some cases (though this usually means that they don't have any verification of the debt, so I wouldn't take a settlement this low.) It's not unheard of for a credit card collector to take 25 cents on the dollar on a valid debt, and 50 cents on the dollar is eminently achievable for many people.

But my understanding is that student loans are the great exception to this rule. Why? Student loans are not bankruptable, not even private ones. A collector for normal sorts of unsecured debt is always working with the threat of bankruptcy in the background; if you try to hold out for full repayment, the debtor can always file Chapter 7. In most cases, that means that unsecured creditors get nothing.

But that's not the case with student loans. There are only two ways to erase the debt: prove you're permanently disabled and will never again earn more than a pittance; or die