“By appointing another White House czar to avoid Senate confirmation, the administration politicized the powerful new bureaucracy from its birth. And by appointing an individual with a track record of using questionable research to advance policy ends, it has jeopardized the second goal as well.” Todd Zywicki, ‘In Elizabeth Warren We Trust?”, The Wall Street Journal, September 30, 2010
Elizabeth Warren is an American attorney and Harvard law professor who has just been appointed by President Obama as Special Advisor for the Consumer Financial Protection Bureau. At 60 years of age, Ms. Warren is yet another in that large legion of Harvard professors who look out over the Charles River, but dream of the Potomac. As with numerous others, she had to await the arrival in office of a Democratic President in order to achieve her dream. And also like numerous others, she had to slide into office by the side-door to the White House, in order to evade potentially damaging Senatorial scrutiny. Almost certainly, she would not have achieved consent, even from a Senate as unusually stacked as this one in favor of Democrats.
As with numerous others, she has worked her way through left-wing media productions to political recognition, appearing in the movie, Maxed Out, and in Michael Moore’s bow to his American heritage, Capitalism: A Love Story, as well as being a regular feature on such television soap operas as Dr. Phil, The Jim Lehrer Show, the Charlie Rose Talk Show, and The Daily Show.
An important reason why propogandists against capitalism establish a good footing within the left-wing media is their willingness to stretch the truth in order to make sensationalist claims that appeal to the one-minute sound-bite audience. It is always saddening to see a supposed scholar slide down that slippery but tempting slope into the left-wing hall of fame. Elizabeth Warren is just one more victim of a loss of enthusiasm for the life of scholarship.
My George Mason University colleague, Todd Zywicki, selectivily exposes Elizabeth Warren’s long-standing lack of care with the truth in the above-cited column. In her widely cited book, The Two-Income trap: Why Middle-Class Mothers and Fathers are Going Broke (co-authored with her daughter), Warren claims that a fully-employed worker today earns less inflation-adjusted income than a fully employed worker did 30 years ago. On this basis, she explains why two income earners no longer save, but rather accumulate greater and greater debt. As Zywicki notes, the co-authors willfully ignore the role of rising taxes as a source of middle-income woes. I would add that they also ignore the role of excessive consumption, as many two-income American families splurge on luxury good after luxury good, without saving for such items in advance. There are virtually no lay-aways in 21st century America; yet this was a common feature of the durable consumption market 30 years ago. As a one-time divorcee herself, Warren should also understand that the increasing fragility of marriage – a choice variable within the marriage market – poses an enormous burden on household finances.
In similar fashion, as Chairman of the Congressional Oversight Panel of the Troubled Asset Relief Program, Elizabeth Warren uniformly treated home foreclosures as the result of bank fraud and the bullying of helpless homeowners. Her Panel routinely ignored the fecklessness of many mortgagees, who walked away from under-water mortgages, and the unsuitability of many low-income households to own rather than to rent properties.
In a sequence of studies purportedly linking personal bankruptcies to health problems and medical expenses, Warren systematically exaggerated the relationship, claiming first that some 46 percent of all such bankruptcies were health-care cost related, and more recently, when Obamacare was up for the vote, that 62 per cent were so caused. In contrast, a battery of studies by the Department of Justices’, Office of of the United States Trustee – which oversees the administration of bankruptcy cases – has clearly established that fewer than 20 percent of personal bankruptcies are caused by health problems or medical expenses.
So, President Obama has appointed a sensationalist progressive socialist , without Senate scrutiny, to one of the most important regulatory positions in the United States. She will work without any Congressional budget constraint, drawing down her budget as a percentage of the annual revenues of The Federal Reserve Board. No wonder the private sector is not bounding with enthusiasm to create new jobs in such a uniquely pessimistic regulatory environment.