B (4:40)

All right, our second story. This one was first reported nationally by Armand Rosen and County highway, then picked up by Chris Rufo and the New York Times. Federal prosecutors have charged dozens of people in the state of Minnesota with felonies, accusing them of stealing hundreds of millions of dollars from a government program meant to keep children fed during the COVID 19 pandemic. At first, many in the state saw the case as a one off abuse during a health emergency. But as new schemes targeting the state's generous safety net programs came to light, state and federal officials began to grapple with a jarring reality. Over the last five years, law enforcement officials say fraud took root in pockets of Minnesota's Somali diaspora as scores of individuals made small fortunes by setting up companies that build state agencies for millions of dollars worth of social services that were never provided. Federal Prosecutors say that 59 people have been convicted in those schemes so far and that more than $1 billion in taxpayers money has been stolen. Over 400 current employees from Minnesota's Department of Human Services publicly accused Governor Tim Waltz of ignoring early warnings about widespread fraud in state social services programs and of, quote, systematically punishing whistleblowers. Walter, is this news or phone news?

A (5:54)

Well, it is. The Trump administration is going to be doing everything it can to tell us this is news and what's left of the Tim Waltz for President movement is going to be doing everything it can to tell us that this is really nothing to see here, folks. Just please move on. It's a sign. I think it is not as big of a story as the Trump people would like us to think it is, but is a considerably more damning event than the Waltz people or indeed sort of a lot of the kind of immigration lobbyists folks would like us to think. Let's, you know, let's start by saying just because there's a kind of crime that's widespread in a particular community, that doesn't mean that a majority of people or anything even, but a small minority of people in that community are involved. You could, you could have this kind of operation go on and fewer than 3% of the Somalis in Minnesota would have any idea what's happening. So we should not, we shouldn't be so, so quick to generalize about this. Nevertheless, it does point to the reality that this romantic idea that mass immigration from all over the world is going to be, you know, so easy, so simple that we should, we don't even need to have a policy debate about doing it. Let's just do it and let's keep, let's keep doing more of it, shall we? Let's just keep going, keep going, keep going. Nothing to worry about, right? In that sense, this story is one of a number of events which are increasingly convincing the public mind, not just in the United States, but across much of Europe as well, that the kind of ali, ali income free approach to migration is just, just doesn't work. And, and so in that sense, it's news. It's news, maybe not less, because of what it tells us about the Somali community in Minnesota, more about where it tells us where the country is going. It is fascinating, by the way, that the New York Times was ultimately sort of harassed, chivied, shamed or simply persuaded to run this story. It suggests that, you know, you don't have to live in the fever swamps, you don't have to live among conservatives, you don't have to live among immigration opponents to suddenly be noticing that immigration is not a small force in contemporary American life, but an extremely large one, and that not everything about it is good. Even though a lot of things are.

B (8:45)

You mentioned the immigration angle and maybe some consequences for Tim Waltz on the side of just, you know, kind of spending on social services. Do you, I have no idea. Do you expect that this is kind of like a one off or one of, you know, a Handful of exceptional cases or is there just kind of like widespread fraud among, you know, the entitlement programs, I guess, state level and federal?

A (9:11)

Well, the same people that tell me that there's no such thing as voter fraud in the United States also tell me that there is no such thing as a major problem of fraud and abuse in social services. So I'm sure they must be right about both because, you know, all good, intelligent people believe both of those things with a pure and unwavering faith. And those of us who can't share that pure and unwavering faith are clearly revealing ourselves to be unworthy as human beings. I don't really want to go there, so of course I believe it. It's very unlikely that this is the only large scale case. It is. It is less unlikely that this is the biggest. This could well be the biggest case because you seem to have had an extremely inept governor and a very sleepy bureaucracy in a state where ideological commitments were large and fear of offending a, an important voting block were also significant. So you had a lot of conditions there. Plus the COVID emergency. And while this thing went on after Covid, it's not clear that, that without Covid it would have taken root on such a wide scale. It's like people have just been making so much money milking the cow during COVID that when Covid was ended, they, they weren't finished milking and so they had to go look for some new cows. They might never have done that had it not been for that first experience. But even so, it isn't impossible that there's nothing else on this scale happening. I certainly hope it's true, but we know enough. There have been repeated indictments over the years, convictions over the years, Medicare in particular. There is a lot of fraud in this stuff. In some ways, some of the worst fraud isn't illegal. I think of the, the teachers unions who just didn't teach during COVID but got paid or, you know, I look at the fact that, look at how many kids spend 12 years in American schools and many of them in pre K and come out not knowing anything. That in a sense that is theft of social services, that's people taking money for jobs that they're not doing and don't really care about doing. And maybe it's not the frontline teachers, maybe it's the administrators, but there's something. When you have this kind of massive continuing failure of a system to, to bring about the, the really rather limited goals that it's been tasked with and no one seems to care. People don't do anything about it. People defend the system. That is, that is not all that different from stealing money from Medicare, it would seem to me.

B (12:08)

All right, final story of the week. The Manhattan Institute conducted one of the most exhaustive surveys to date of the emerging multi ethnic working class GOP, asking nearly 3,000 self identified Republicans and 2024 Trump voters about a wide range of policy issues. The findings point to a coalition that is divided into two broad segments. The majority segment, about 65% long standing Republicans who have backed the party for many years, are consistently conservative on economic, foreign policy and social issues. They favor lower taxes, take a hawkish view of China, remain pro Israel, and are highly skeptical of progressive agendas on trans and DEI issues. But a sizable minority, about 30% new entrants to the GOP coalition for the past two presidential cycles look markedly different. Younger, more racially diverse and more likely to have voted for Democratic candidates in the recent past. This group are more likely, often substantially, to hold progressive views across nearly every major policy domain. They are more supportive of left leaning economic policies, more favorable toward China, more critical of Israel, and more liberal on issues ranging from migration to DEI initiatives. A significant share also report openly racist or anti Semitic views and express potential support for political violence. Walter, there's a lot there. Is it news or fo news?

A (13:26)

Well, it's. I wouldn't say it's news just in this sense. I think we've already noticed this. What? What? There are anti Semites in the Republican Party. What? What? Younger Republicans seem to be much more sympathetic toward all kinds of traditionally Democratic things. Everybody's been talking about this for a long time, so we've now sort of gotten at least a measure of it. And again, though I'd be a little cautious, polling is really hard these days. And just the kind of people they're trying to pull here or talk about here, young people who are, you know, in some ways have unconventional views or whatever those are the artists wants to poll. How did you find them? You know how well you know how accurate is the model of the population that you're using. So I think the margin of error could be bigger than the pollsters want us to think. None of that takes away from the substantial reality that there is this group of people could be five points higher, five points lower. Who can say? The big news I would say here though is that the 65% of traditional Republicans and the 35% or whatever of quote, new Republicans, unless they vote together, they don't elect Anybody to anything. You know, you cut The Republican vote 35% and you just, you know, I mean, that, that special election in Tennessee, the Republicans would have lost it in a landslide if they'd gone down 35% instead of 10%. So you have these two groups who don't think alike on some really important topics, and neither one of them has any chance whatever of affecting national debates unless they find national policy, unless they find ways to work together somehow. That's very interesting. And that's the task that haunts a lot of sort of politicians and pundits and all on the GOP side. If you were to point to me, to two different groups of people and ask me which I thought was the more likely to be changing its mind about things in the next few years, and one of the groups was under 25 and the other group was over 25, I would, as someone who's been teaching college for 25 or so years, I would say probably that those younger folks are more likely to evolve in their political and cultural and social views than the older folks. And so. And I think so I think we should also be thinking about that side of it. Nevertheless, it does say this. Just that minority of 35% is too small for the party to survive its loss, and the majority of 65% is too large to be expected to. To simply bow to the will of this minority. Obviously, Donald Trump's leadership, whatever you think of him or his or the direction he wants to take in the country, his leadership has been pretty effective at keeping these groups united, at least well enough to get him back into the White House and to carry majorities in both houses of Congress. So, you know, is Donald Trump the only one who can weave this magic? I think it also helps us remember just how much of his time President Trump needs to spend on things like coalition management. He needs to figure out ways to keep both of those groups from becoming so unhappy that they don't walk away completely. And that is going to get, I think, tougher as the midterms come closer. Maybe if the economy turns around and people start feeling a lot better, that could make a change. I think it just, it tells us that Trump really did pull off something of a political miracle by wielding these groups into a pretty comprehensive voting coalition. But it's going to be harder for him. And it is by no means clear that there's anybody else going who can do that job.

B (18:09)

All right, that does it for the news this week. Let's have the big conversation. So, Walter, there have been a Number of news stories recently about some pretty drastic changes and some worrying trends in higher ed. And I thought we could try to kind of take them as a whole and you could give us your thoughts on what exactly is going on. So there was the Federal Reserve bank of Cleveland report showing that the longstanding employment advantage of college graduates is basically gone in America and that for young adults ages 22 to 27, the gap in unemployment between college educated and high school educated workers has shrunk to near zero. Another report showed that unemployment among college grads as of September 2025 is at a record high. And then there's the related issue that I guess you'd expect of college enrollment, which apparently has dropped by about 7% nationwide. 18 year olds. There have also been a number of news stories showing the skyrocketing number of college freshmen who require remedial education in like middle school level reading comprehension and math. And then there was also that Atlantic story this week about stanford where apparently 38% of students claim a disability and are registered by the university as having learning disabilities that require accommodation. So there's a lot going on here. But tell us what you think it is. Is it the effects of the pandemic? Is it TikTok? Is it AI? Is it something that precedes all of those?

A (19:34)

Yeah, there is a lot going on. If you put some of those things together, it comes clear. For example, the fact that enrollment is dropping is telling you that colleges are getting much more desperate to try to recruit students. That's not unconnected from the fact that you're seeing populations of students who can't do the work, aren't prepared for college work and the colleges are taking them anyway. And some would say, oh, it's just because, you know, the woke DEI people are trying to like cram them full with minorities who don't do well on the standard test. Well, that could be a piece of it. But I think driving a lot of that though is the need to keep your enrollment numbers up and you have to scrape harder at the bottom of the barrel, academically speaking, you know, as the, as the growth and population of 18 year olds stops and even goes toward reverse. Remember too that with, you know, we're reaching a point of 0% net immigration, that has an impact on the size of the pool of students. So colleges face a huge problem in terms of enrollment. There's nothing about the demography that tells us it's going to get any better at the same time. And immigration is a factor here too. The end of at Least for now of new illegal immigration is going to tend to raise wages at the lower end of the employment market. So it's, it's going to be easier for young American citizens who don't have college degrees to find jobs and they don't face as many of the challenges. The landscapers, you know, are not facing quite as many challenges from AI as the, the computer coders are. So the, so that we're getting. Just as in the 70s and 80s we had a series of changes in the labor market that tended overall to help the college educated and hurt the high school educated. We may now be in a period where a lot of college educated people are going to, are going to suffer in the job market a bit. That is likely to then feed back onto enrollment. Why am I taking on five figures of student debt in order to not have a job when I get out of college? A lot more people will be asking that, that question. That in turn will drive the colleges to look ever harder to try to keep those numbers up, so resulting perhaps in less and less qualified students going to college. But then that feeds out into the other end. Unless the colleges are really miraculously successful at remedial education, and they're probably not going to be overall, a high school should be better at remedial high school education than a college should be. So probably not. If your 11th grade teacher couldn't or didn't teach you anything. I'm not sure that your freshman remedial college teacher who did not sign up to have a job teaching remedial high school math, signed up to teach college math. Right. So, so there can be a mismatch of skills and tasks to some degree. And so they're likely to come out of the college with less, fewer skills and especially in this case fewer math skills than students would have five or 10 years ago. So the quality of employee coming out of the college process is likely to reflect the decline in the quality of the pipeline going in. If you add to that that the colleges, many colleges are really, really hungry for students and you don't want to get the reputation of being flunked out. You, you know, you come here and it's going to be really hard and the teacher's going to be really tough on deadlines and the grading standards are really high. Like a lot of people just say, I'm going to go to that college right next to you, where it's like Harvard, they just give you all an A. So, you know, so the competitive pressures will actually be making a lot of colleges Sort of tend toward being even less good at teaching as the quality of their students may be going down. All of this has going to have implications for the labor market at the other end. I already just anecdotally run across a lot of employers who have kind of a list of actually some quite prestigious colleges that they're not that interested in looking at applications from. We are also seeing one of the. One of the professions that seems to be hit early by AI is consulting. And you're looking at companies like McKinsey and some of the other big consulting and accounting firms that often take a really substantial intake of college grads at really quite nice salaries, are freezing employment, freezing salaries, or even taking a year off from new hires. So none of this really looks great for somebody trying to run a college. Those of us, you know, people who just sort of read college news casually tend to focus on things like woke and dei. You know, those are catchy. They tend to be, you know, they raise strong emotions, they're relatively easy to report on. You know, people get very into this. But a lot of what really happens is driven by economic competition among colleges and even some of the woke DEI stuff, you know, that sort of elevating it into a religion and trying to be more woke than thou. More DEI than thou that we saw among so many colleges recently. That's partly a recruitment strategy because a lot of people were saying, okay, who are the ethnic groups, groups in our society where the population is decreasing or they're not having children? And then who were the groups that are by immigration or by a higher demographic rate or having more children? How do we position ourselves to capture the next wave? And so if there's the idea, if, you know, if the next generation is going to be majority non white, well, then a college needs to think about how does it look like a good spot, a welcoming spot to those students? So the demography and the economics are playing a bigger role in some of these other things than, than maybe we sometimes think. Because yeah, you've got the ideologues that are really pushing these ideas out of conviction. You've got the opportunists are pushing them because like, hey, you know, if, like only, only Elizabeth Warren and I can get jobs here because, you know, only Native Americans can, can do X or Y, or we get extra points. So you have sort of organized interest groups lobbying to get more jobs for them. But why do college presidents and college boards of trustees go along with this? A lot of times I think it is reflected in this economic demographic argument. Of you got to make yourself ready for the changes that are coming. And that particularly, by the way is true in the, in the Northeast where you have a lot of colleges and there the demographic decline is faster and the ethnic changes, the ethnic changes in the composition of the, of the population are higher. So you've got these North, Northeastern and New England college hungry hung colleges hungry, hungry, hungry for more students. And the only students they can see increasingly are not, don't look like the kind of students they had 30 years ago. So none of this looks particularly good. And the problem and educational reform is going to be kind of on the table inevitably for economic reasons, even if it's not on the table for ideological reasons. But there are important changes in the demand side of the labor market. That's horrible. I'm sounding like a Marxist here as I'm talking about higher ed reform, you know, economic determinism and so on. There's a lot of other stuff involved, but it's sometimes helpful to look at these structural things. We've talked on the podcast before about how the kind of new tech capitalism is increasingly thinking about different values than capitalist capitalists were thinking back in the 90s and 2000s. So today you have somebody like an Andy Karp who will talk about the importance of patriotism for his company. Why is that? Partly because Palantir does a lot of work for the government. But even more, in a way, IP is the key to who they are without their intellectual property, they don't have property. You know, that's, that's what they've got. And they want employees to feel a sense of loyalty to the United States rather than China. China is their, is a tough political competitor. It is subsidizing competition to drive Palantir and other companies into marginal positions in the labor market, trying to beat them in technological development. So what the companies that are actually going to be providing a lot, a lot more high wage, high interest, high skilled jobs in the future maybe start wanting patriotic Americans who think, you know, stealing, stealing is really bad. They have a strong moral aversion to it. They think if you're working for U.S. defense, that's good, not bad. It's not an evil compromise you make. It is fulfilling your personal vocation and mission in life. Right? Okay. That means there's a terrible mix, mix mismatch between the curriculum that elite colleges are teaching their students and the actual formation, intellectual, personal, moral that those students will need for success in the emerging world. That is really serious. And I suspect that it's, it's something we are seeing a bit of a stiffening of the spine in some of these elite schools. It is not all about bending the knee to Donald Trump here. I think there's also a recognition that they're educating students for a world that may not be around much longer. And if you are a traditional McKinsey consultant, and I don't mean to pick on McKinsey, but you know, you're sort of used to working in a, in a seamless world. You're in Switzerland one week, you're in Vancouver the next week, you're in Rio the next week, and you're working for companies that are of the citizens of the world, not grounded in the United States. And actually to some degree, the moral formation of relativism, of critique of American exceptionalism, so on and so on, is good professional formation for people working in that environment. But what if that environment is really changing and the increase, the heightened geopolitical competition, the heightened competition in the tech space and all of these things are meaning that young people today are going out into a world that is more like the Cold War and less like the end of history? I think that might be happening. And if that's happening, colleges are going to need to find a way to adjust foreign.

B (32:50)

That does it. For the big conversation, we have to skip the tip of the week this time there are planes to catch, but we'll be back with it next week. Until then, thanks to our producers Josh Cross and Quinn Waller, thanks to Alex Batanov at Hudson and my co host Walter Russell Mead. I'm Jeremy Stern. We'll see you next week. And until then, please, please go rate and review us. This helps other people find the show.