Elizabeth Warren’s America

In the Massachusetts Senate race, incumbent Scott Brown has “gone negative” on his Democratic challenger, Harvard Law School Professor Elizabeth Warren. Professor Warren gained fame as the godmother of Dodd-Frank’s Consumer Financial Protection Bureau, which as we speak is rendering capitalism safe by engineering financial products that never occurred to any consumer or financial institution and by simplifying mortgage disclosure forms in a mere 1,099 pages.      Senator Brown has targeted Mrs. Warren’s phony claims of “Indian” heritage; her $350,000-plus salary at HLS; her work for an insurance company in matters involving (yikes) asbestos; and other trivia. What he hasn’t said and probably won’t say: she is a nag. A scold. An ideologue. An advocate of a nanny state beyond a Swedish socialist’s wildest imagination. A bureaucratic Bruegel who paints an America of victims—pathetic figures in a landscape of unremitting hostility. Also, Professor Warren is an economic idiot.

Any of Professor Warren copious writings, listed on her HLS website, illustrate the preceding averments; I’ve picked one randomly, a 2005 essay on “What’s Hurting the Middle Class.” The hurt, in a word or two, is excessive debt and leverage. One reason for that misfortune might be that people are spending more than they earn. But this is not actually so, Professor Warren and her co-author explain. It’s just that the stuff people spend on has become more expensive. The biggest item is housing. The authors acknowledge

that the average size of a new home has increased by nearly 40 percent over the past generation (although it is still less than 2,200 square feet). But this statistic tells us only that real-estate developers have decided that building McMansions for the rich is more profitable than building Levittowns. […] The wealthy may be living in spacious new digs, but middle-class families are not. The proportion of families living in older homes has increased by nearly 50 percent over the past generation, leaving a growing number of homeowners grappling with deteriorating roofs, peeling paint, and old wiring. Today, nearly six out of ten families own a home that is more than 25 years old, and nearly a quarter own a home that is more than 50 years old.

Amen. My own abode was constructed in 1952; and the paint… The folks who tell me to buy a paintbrush are the same people who tell our children to buy their own contraceptives. T his is a crisis. Where is the government?

(In fairness, it hasn’t ignored me entirely. When we renovated our bathroom—old wiring and all that—it designed the toilet flush, showerhead, and lightbulbs. On balance I’d like the government to get out of my bathroom and back into my bedroom, where it belongs; but at least it’s been trying.)

Back to crumbling homes and mountains of consumer debt, though: the sad confluence arises from several sources, foremost

Credit. Each year millions of families are trapped by credit-card issuers and mortgage lenders that market deceptive products and use unscrupulous billing practices. America needs to develop product-safety standards for credit cards and mortgages, just as we have for all other consumer products.

Actually we haven’t—and maybe it’s a good thing, too. Earlier in the article, the authors note (on a rare note of good cheer) the impressive reduction in the cost of clothing over the decades:

Today’s toddlers often own nothing but a pair of five-dollar tennis shoes from Wal-Mart. Suits, ties, and pantyhose have been replaced by cotton trousers and knit tops, as “business casual” has swept the nation. New fabrics, new technology, and cheap labor have lowered prices.

By all means let’s hear it for innovation and cheap labor. Could it be, though, that an OSHA with jurisdiction over Vietnamese factories or a Knit Top Safety Commission in the Target aisles would have wiped out the savings? Something like that, we learn from the authors themselves, has happened with cars: because you can no longer dump three kids in the back of a station wagon (long gone, courtesy of the Clean Air Act—my note) but instead, pursuant to government regulations, have to buy the equivalent of a Sherman tank plus NASA-approved booster seats, American families spend way more on cars than they used to.  And therefore [sic], we need and, thanks in no small measure to Mrs. Warren,  now have a safety agency for financial products. And not a moment too soon:

No one can sell a toaster in the United States that has a one in 11 chance of burning down someone’s home; likewise, a mortgage that has a one in 11 chance of putting someone in foreclosure should be banned. Credit products should be clear, honest, and not loaded with tricks and traps.

And did we mention cheap? Where I teach, we sometimes say such things in class—to make the 1-L’s laugh. The ones who don’t  don’t get to be 2-L’s. They’re Harvard material.

Elizabeth Warren is the Madame Defarge  of our shining city on the Potomac; the  preeminent tricoteuse of our regulatory state.  If Senator Brown isn’t making an issue of it, that’s because Professor Warren’s ideological knitting isn’t an electoral vulnerability. It is her principal asset—certainly in Massachusetts, and (I’d wager) in virtually every other state in the nation.  The demand for her politics of resentment and regulation is broad and authentic. The case against it is obvious. Alas, it can no longer be explained.

 

Michael S. Greve

Michael S. Greve is a professor at George Mason University School of Law. From 2000 to August, 2012, Professor Greve was the John G. Searle Scholar at the American Enterprise Institute, where he remains a visiting scholar. His most recent book is The Upside-Down Constitution (Harvard University Press, 2012).

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Comments

  1. edh says

    In addition, Warren is intellectually dishonest.

    Warren and Tyagi provide no explanation why they would present all other expenditures in terms of percentage change in dollar amounts but taxes, and taxes alone, in terms of the change in the percentage of income dedicated to taxes.

    http://www.volokh.com/2011/07/28/christopher-caldwell-falls-for-the-two-income-trap/

    Book Review: As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America, by Elizabeth Warren et al.

    “Most of their study replicates several earlier research publications. These are hardly mentioned. The writers make extravagant and false claims to originality and priority of research. There appear to be serious errors in their use of statistical bases which result in grossly mistaken functions and comparisons. Some of their conclusions cannot be obtained even from their flawed findings. The authors have made their raw data unavailable so that its accuracy cannot be independently checked. In my opinion, the authors have engaged in repeated instances of scientific misconduct.”

    http://www.docstoc.com/docs/122052167/rutgers-shuchman?#

  2. jgreene says

    It is INCREDIBLE that this woman is even taken seriously. She is indeed an economic IDIOT and her life is one of lies and hypocrisy.

    • says

      LK, I disagree. Being a pintoy headed Harvard elitist is a net plus in a Dem primary. Anyone trying to go negative among Dem. primary voters on that will just lower their own popularity. It’s among the GOP that Ignorance is Virtue these days. And as for those Democrats having paid their dues, well, dues don’t win elections, votes do. With the new poll today showing Warren ahead of Sen. Barncoat, the dues of those perennial candidates may seem like a quaint footnote next year.

    • says

      Rice: You comment fqueerntly about the debt, and it’s clear that you believe it is one of the big issues facing us. I think your worries are misplaced. If the debt were really an issue, interest rates would be rising, not falling. There can be no progress in paying down the debt until people return to work. Otherwise, you end up in a vicious cycle where you cut spending to reduce the debt, which in turn hurts the economy, leading to more unemployment, lower tax collections and a higher debt. The other thing to keep in mind is that eliminating all the Bush tax cuts (not just the ones for the rich) and simply returning to the tax brackets that we had in the 1990s would eliminate 40 percent of the long-term debt. Which is exactly what we should do once the economy has recovered.

  3. Dan C says

    There’s two related reasons Warren’s ideology of bigger (read, statist) government is accepted: first, most have come to believe that acting for our own self-interest requires lying, cheating and trampling over babies so of course we must regulate adults in the marketplace; the second reason is ‘need is king’. Old people need medical care, we get Medicare, the poor need medical care? we have Medicaid, etc. etc. etc.

  4. libertarian jerry says

    The problem is that the Elizabeth Warrens have been winning elections for the last 80 years or so and the Ron Pauls are being left by the wayside. Mostly all of the organs of government,especially on the Federal level, are under the control of Progressives(socialists) and me too conservative Republican socialists. Nothing ever changes except for the worse. So now that the productive Economic Class is a voting minority in America and that there are more people on the government gravy train then ever in history. And that these people on the government gravy train continue to vote for the Elizabeth Warrens of America,what are we as libertarians suppose to do? I know! We will write letters to the editor,attend libertarian seminars, read and comment on libertarian Blogs,run as 3rd party candidates getting 2% of the vote and complain about creeping socialism to our friends and neighbors. Of course we freedom lovers have been doing that since the time of Woodrow Wilson and every decade things get worse. We just keep obeying unjust laws,paying unjust taxes,following ridiculous regulations, going along to get along. Most of us are losing our standard of living along with our freedoms. And the sad part of the equation is that behind the scenes the Elizabeth Warrens are smirking at our efforts,secure in the fact that they have the most powerful government law enforcement organizations and the most corrupt judicial system behind them to enforce their collectivist views. What has happened to America is that Atlas Shrugged,Brave New World and Nineteen Eighty Four have become reality.

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