Schansberg: The Warren Flip

November 20, 2019

by Eric Schansberg, Ph.D.

When one of my sons does something unexpected, I like to joke: “Who are you and what have you done with my son?” After reading Elizabeth Warren’s three books on politics, I had the same question about her.

The first, “The Two-Income Trap” in 2003, is moderate or even conservative. Some of her arguments on public policy consequences are so well-reasoned that it brings a tear to an economist’s eye. But really, the book is what you’d expect from an academic — thorough work, thoughtful analysis and careful conclusions.

Warren’s thesis is that when financial troubles come, life often falls apart — even for two-income families who “play by the rules.” Higher household incomes could have meant more savings and less risk. But household spending increased as well. With both parents working, a family has less flexibility — thus, “the two-income trap.”

Warren notes that most of the increased spending came from housing. And she rightly saw a connection between housing prices, K-12 school quality and neighborhood safety. This led her to advocate greatly expanded school choice — vouchers, charters, and so on — to break the link between housing and schools.

The policy prescriptions in the book are mild, compared with her later books and her proposals today. This stemmed from her understanding of how subsidies distort markets and inflate prices: “America simply cannot afford mass subsidies for its middle class to buy housing. Besides, direct subsidies are likely to add more ammunition to the already ruinous bidding wars, ultimately driving home prices even higher.”

She made similar arguments to criticize subsidies for day care. But her analysis and prescriptions were not always impressive. She complains about inflation in higher education without noting the impact of its massive subsidies. And her level of trust toward consumers, particularly the poor and certain minority groups, is not high.

Unfortunately, the impressive things about Warren went out the proverbial window when she became a politician. It’s easy to see when you compare her first book to her other two political books: “A Fighting Chance” in 2014 and “This Fight Is our Fight” in 2017. Both move toward rhetoric, biography, and boilerplate — and away from careful analysis.

New policy preferences emerge which look like a crass grab for political power. And beyond grand plans that can’t possibly be financed through wealth and income taxes, Warren’s avid embrace of wide-ranging and extensive subsidies — for college, student loan forgiveness, child care and health care — makes no sense and has no apparent cause.

So, here’s the most amazing story in Warren’s books: Her research on bankruptcy leads to political influence. She gets the opportunity to meet with First Lady Hillary Clinton and argue against a bill penned by industry lobbyists. Congress and President Bill Clinton support the law. But Elizabeth persuades Hillary, who persuades Bill to veto the bill.

But here’s the kicker: The bill is reintroduced in Congress the next Spring. “This time, freshman Senator Hillary Clinton voted in favor of the bill . . . The bill was essentially the same but Hillary Rodham Clinton was not. Her husband was a lame duck at the time he vetoed the bill; he could afford to forgo future campaign contributions. As New York’s newest senator, however, it seems that Hillary Clinton could not afford such a principled position.” Ouch!

Eleven years later, Warren tells the story again in a “Fighting Chance.” This time, she shares Hillary’s role in persuading Bill to veto the bill but does not mention Hillary’s affirmative vote in 2001. Of course, Warren’s redacted retelling is a smart political move. But it is also indicative of her emergence as a political animal in her own right.

Her flips on public policy are staggering enough — from one who knew better and opposed to someone who pretended not to know better and supported. The hypocrisy is even worse because she crushed Hillary for the exact same move — and Warren’s own sins in this regard are far worse.

So, what happened to Elizabeth? I heard Rod Dreher speak at the 2019 Touchstone Conference on “The Benedict Option.” Dreher had been a devoted Catholic but “lost his faith” as he investigated the Catholic sexual abuse scandal for the New York Times. He started to obsess on the important work he was doing. He began to imagine that he was indispensable. He didn’t take steps to ground his work in something greater. In Christian terms, “the good fight” became an idol — and idols always fail.

When Dreher used the term “fight” to describe his crusade, it immediately brought Warren’s last two books to mind — with “fight” in both titles and “fighting” as her most prominent metaphor to paint her own efforts. My best guess — and I think, the most gracious interpretation of her hypocritical flips — is that she has traveled a similar path to Dreher.

It can be hoped that Warren will not get to enforce her preferred version of society and her hypocrisies on others. And as Dreher eventually learned, it can be hoped that Warren will find that there are things much more important than “the fight.” When the ends justify the means, it’s never ultimately good for those who misunderstand — or those they try to influence and control.

D. Eric Schansberg is Professor of Economics at Indiana University Southeast, adjunct scholar for the Indiana Policy Review Foundation and author of “Turn Neither to the Right not Left: A Thinking Christian’s Guide to Politics and Public Policy.”


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