Monday, January 27, 2014

The Horrible, Horrible, Horrible Views of Elizabeth Warren

Michael S. Rozeff writes at LRC:
Elizabeth Warren, Senator from Massachusetts, is mentioned as a presidential hopeful. Horrible, horrible, horrible. American government is gearing up to flush whatever’s left of America down the toilet, judging from the prospective candidates of the two major parties.

One of Elizabeth’s proposals is for the Federal Reserve to buy student loans created and administered by the Department of Education. In other words, do for education what the FED has been doing for housing by buying mortgages, except that she’d fix the loan rate at the Fed’s ultra-low discount rate. This one proposal alone shows how clueless America’s leaders can be and usually are. Turn the FED into a Congressional piggy bank. Good thinking, Elizabeth.

In New York, she applauded the idea of raising taxes on incomes over $500,000 in order to fund universal pre-school, which she favors. Kids aren’t forced to go to enough school? The high income people are piggy banks? To be punished? Ever hear of freedom, Elizabeth?

In another clueless move, Elizabeth wants a financial product safety commission. She seems oblivious to the layers of financial regulation already on the books that have not stemmed the obscurity of financial products. She thinks a new commission will prevent another bubble in mortgages. Elizabeth, have you no idea why that bubble occurred and why a new one is brewing now?

I’d bet that Elizabeth has a high IQ. Her proposals show that being smart is no guarantee that a person understands enough and knows enough to be writing laws that govern millions of people to their benefit.


  1. The majority of the large-scale monumental type errors that take place in society do not come about from a lack of intelligence, but rather from the difficulty of the task(s) grossly outrunning the intelligence of the person or people involved.

    The point at which that happens is much, much sooner than most realize, especially in a world of tradeoffs and systematic interactions within an economy.

    Mix in all of that with the psychological problems found in most "planners" and you have the foundation for disaster.

  2. It has probably escaped Warren's attention that her proposal to have the Fed backstop student loans would ultimately harm those very same people. How? The Fed would have to create currency out of nothing to pay for student loans. The schools would realize the money tap is wide open and jack up tuitions, much as they have done with federally-funded education subsidies for decades. After all, it's free!

    Later on, when the dollar craters because the Fed has destroyed whatever value it had, the people left holding the bag will be the former students who mistakenly thought they were getting something for nothing. Karma, baby.

    There is no free lunch, folks. The bill must always be paid by someone, somewhere. That someone is you.

    I have an idea: if you want something, earn the money to pay for it (and the money would be backed by tangible goods with enduring value, not empty promises from politicians). Stop relying on demagogues like Elizabeth Warren, who is merely trolling for votes, to use the coercive power of the state to steal other people's property to pay for your stuff.