Evaluation Of Elizabeth Warren As Potential Democratic Candidate For President

In the polls for the past several months, the top three among the contenders for the Democratic nomination for President have been Joe Biden, Elizabeth Warren, and Bernie Sanders. I doubt that Biden will make it all the way to the end of this marathon; and I sense that Sanders’s shtick has started to wear thin and that he is fading. That would leave Elizabeth Warren as the most likely to get the nomination.

Heaven help us.

Warren has her own shtick. The basic idea is to claim that the U.S. economy is fundamentally not working for most people, and then to stir up resentment against anybody who has achieved any success, aka “the wealthy” or “the well-connected” or “the corporations.” These people are oppressing you, and you need Elizabeth to fight back. In her February 2019 speech announcing her candidacy, it was that “millions of American families are . . . struggling to survive in a system that has been rigged by the wealthy and well-connected.” Then there are the evil banks, who “steer [you] into overpriced credit products, risky sub-prime mortgages, and misleading insurance plans.”

But don’t worry — Warren has all the answers, in the form of some dozens of “plans,” each one a top-down directive from the federal government to get those evil exploiters to behave. Universal child care! 100% clean energy! Expanding social security! Hundreds of billions for housing! Trillions for free college and debt forgiveness! Wealth taxes on the rich! Tens of trillions for tackling the “climate crisis”! More tens of trillions for free health care for all! And those are just a small sample. It’s a good thing that the government’s resources are infinite. You name it, and there’s a “plan” and a new collection of regulations and orders and a few hundred billion or a few trillions or tens of trillions from the infinite free loot from above that will solve the problem instantly, at least once Elizabeth is in charge.

In the aggregate she is proposing a total transformation of the U.S. economy, . . .

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The Democratic Candidates' Bidding War: Can Anybody Even Compile A Full List?

In the run-up to tonight’s first debate among the 2020 Democratic candidates, many have noted the outbreak of what is being called the “bidding war.” In this war, the “bids” consist of proposals for new government spending, handout and giveaway programs. Among both the candidates and those covering the process, the assumption appears to be that the game will be won by the candidate who bids the biggest collection of the most expensive and extravagant such new programs. With time running out to get bids on the table before the debates begin, the last few weeks have seen a blizzard of new and ever-more-expensive proposals for buying the votes of the electorate. After all, when you get hit at one of these debates with a question about some human problem, you certainly don’t want to be caught without having already proposed a program or handout to “solve” that particular problem.

Meanwhile, don’t worry, none of these moderators will bother to ask you how you plan to pay for your various proposals. Obviously, we all know that payment can come from the infinite pile of free government loot. In the off chance that somebody tries to press you, you can always refer to your plan for a new “billionaire’s tax.” No details required.

A funny thing about this process is how piecemeal it is. One day one candidate comes out with a proposal for Medicare for All, and another day another candidate comes out with a proposal for a universal childcare system, and on yet another day another candidate comes out with a proposal for a renters’ tax credit. Can anybody give us a complete list of all the proposed new programs? How else are we ever going to get an idea of what kind of country these people intend to leave us with when all their programs get enacted?

Well, I’m sorry to be the one to tell you, but I don’t think it’s possible. . . .

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Can Anybody Around Here Admit Out Loud That The Federal Government Cannot Fix Every Human Problem With Another New Program?

When you get right down to it, the fundamental fallacy of the progressive movement is the idea that the central government can fix every human problem by just creating some new programs and spending some new money. And the most important theme of this blog is showing by a thousand examples how that effort always fails.

That’s why one of my favorite recent posts is the one of the past November 23, titled “The Idea That Just Won’t Die: The Right Federal Program Can Solve Any Human Problem.” Key quote:

Take a some of our very brightest thinkers. Send them to some top Ivy League or equivalent schools to get the very best educations. Then turn them loose into the policy arena, full of moral righteousness and energy and a burning passion to fix the world. And what will emerge? Remarkably, in every case you can find, what will emerge will be the exact same thing: a proposal for some new government “program” and spending that supposedly will fix whatever problem the particular guru may focus on at the moment.

That particular post focused on federal job training programs. Federal job training programs are perhaps the very best illustration of the fallacy that some new federal program and spending could possibly be the solution to a human problem at hand, since by now there are around 50 of them, all of which continue to fail utterly. Yet despite that incredible track record, every time a government official or policy wonk looks at an issue of job lay-offs or high unemployment, the proposed solution is always another federal job training program. The failure of the previous 50 or so of them is never mentioned. That would just be too impolite. Nor does anyone ever suggest cutting back, much less eliminating any of the 50 failures. That’s just not how this game is played. Instead, one more program is added, and this one is really, really going to work this time. . . .

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What Is The Biggest Problem Facing The United States?

If you were asked to identify the biggest problem facing the United States today, what would be your answer? I think that the answer is obvious: out-of-control entitlement spending that threatens to bankrupt the country.

Reasonable people might differ about this assessment. For example, some might cite the threats posed by international strategic adversaries, like China or Russia or Iran. Or the threat of a rogue power like North Korea or Iran getting, and maybe using, nuclear weapons. I’m not saying that these aren’t serious problems, but just that there’s not much that can be done about them that we aren’t already doing. Also, I don’t think the chances of any of these guys doing something really stupid, like launching an unprovoked nuclear strike, are very high.

By contrast, the entitlement funding problem is gigantic, and obvious, and by no means imaginary, and currently nobody is doing anything about it whatsoever. The bonded national debt — currently around $20 trillion and about 100% of annual GDP — is often cited as a big problem. But the unfunded future liabilities of the Social Security and Medicare programs are far higher. The 2018 Trustees’ Reports for the Social Security and Medicare programs put their 75-year unfunded liabilities at approximately a combined $50 trillion (approximately $13 trillion for Social Security and $37 trillion for Medicare). And many analysts give credible reasons why those figures represent substantial low-balling of a much bigger problem. For example, James Capretta of the American Enterprise Institute, in a June 2018 post following release of the Trustees’ Reports, points to highly optimistic assumptions about ability to control future Medicare costs (“the Medicare projections assume deep, permanent, and ongoing cuts in payment rates for physicians and hospitals that are difficult to believe will be implemented”), as well as equally optimistic birth rate assumptions. Other credible observers think the shortfalls, particularly on the Medicare side, could easily be double or more the government’s official projections. For example, from Michael Tanner of the Cato Institute in 2015 (“[I]f we return to double digit health care inflation, we could see Medicare’s liabilities swell to more than $88 trillion.”).

You may recall that President George W. Bush made a serious effort at least to begin to address this problem. During his first term, he appointed a Commission to come up with some solutions on the Social Security side, and the Commission proposed a series of reforms. None of them went anywhere in Congress. W did not try again in his second term. President Obama, and now President Trump, have showed no interest in this subject.

Anyway, I mention this subject today because not only is nobody paying any attention whatsoever to the huge problem, but over on the Democratic side, with the 2020 presidential sweepstakes just getting started, there has suddenly erupted some kind of a bidding war as to who can offer the most grandiose and completely impossible set of proposed expansions to the existing entitlement state.

It was Bernie Sanders, of course, who laid down the original marker for the bare minimum list of new entitlements for a true “progressive” Democrat to embrace. Bernie’s list in his campaign for the 2016 nomination included the following:

  • Medicare for all.

  • Social Security benefit increases

  • Infrastructure program

  • College affordability (free tuition for all!)

  • New paid leave fund

  • Bolster private pension funds

  • Youth jobs initiative

In a September 2015 article, the Wall Street Journal put a ten-year price tag on that list of $18 trillion. Others put the figure at $30 trillion or more. Whichever it is, Bernie’s list has turned out to be merely the small opening bid in what is quickly becoming a much grander game.

Credit new “it” Congressperson Alexandria Ocasio-Cortez with launching the advocacy for what she calls the “Green New Deal.” We’ll eliminate all fossil-fuel energy within 10 years! With government spending and subsidies tossed out left and right, of course. Next thing you know, the presidential candidates are lining up to get on the bandwagon: Elizabeth Warren, Cory Booker, Beto O’Rourke, Kamala Harris. Do any of them have a clue how much this might cost, let alone how it could be engineered? Not a chance. A recent study by Roger Andrews at the site Energy Matters put the cost of batteries alone for a wind/solar/battery system just for California at about $5 trillion. Multiply by about 8 to get a cost for the full U.S.: $40 trillion. As you know from your cell phone, the batteries would need to be replaced every few years. The cost of the wind turbines and solar collectors is extra.

Where to from here? Ms. AOC is never short of other bright new ideas. How about “Housing as a human right”? She must be inspired by the great “success” of the New York City Housing Authority — an infinite sink for about $2 billion a year in federal funds and in desperate need of some $30 billion for capital repairs. Multiply those numbers by about 30 if you want to replicate on a national scale. Oh, and the 170,000 units of NYCHA housing somehow never make a dent in the “homeless” problem.

And then there is the proposal for “reparations” for black Americans, most prominently pushed by Representative Maxine Waters. She has recently become the Chair of the House Financial Services Committee. Any price tag for that? It’s whatever you want it to be. Make your bid!

These are people who talk endlessly about “sustainability.” They just have a different definition of the word than I do.

The Idea That Just Won't Die: The Right Federal Program Can Solve Any Human Problem

Let’s face it, our world is full of major human problems. Even very wealthy modern America has its share of these major human problems: poverty, drug addiction, homelessness, unaffordable health care, unaffordable housing, unaffordable education, and you could go on and on.

Now, how to address these problems? You could try this: Take a some of our very brightest thinkers. Send them to some top Ivy League or equivalent schools to get the very best educations. Then turn them loose into the policy arena, full of moral righteousness and energy and a burning passion to fix the world. And what will emerge? Remarkably, in every case you can find, what will emerge will be the exact same thing: a proposal for some new government “program” and spending that supposedly will fix whatever problem the particular guru may focus on at the moment.

The government in question will always be the federal government. Why not state governments (even all state governments) or local governments? My friend, have you no moral compass? Brilliant and righteous policy gurus do not go to Yale or Harvard or Princeton to think small. Fixing the world is going to require billions, and even trillions, and right now. Do not expect these experts to spend a decade or two in the wilderness in Nebraska trying go get some puny experimental program involving mere millions off the ground. These urgent problems must be fixed immediately, and all at once, and with whatever money it takes.

As you’ve been reading this introduction, likely the examples that have run through your mind include current progressive icons like free healthcare for all, free college for all, and so forth. And those are indeed excellent examples. But to illustrate the proposition of a new federal program as the solution to literally everything, let me take you on a tour through some op-eds and reviews that have appeared in the Wall Street Journal just over the past few days. . . .

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Two Alternative Approaches To Fundamental Economic Policy. Which One Works?

The mid-term elections are upon us. Time to recognize once again that there are two alternative approaches to fundamental economic policy, and that one works while the other does not. For most of my life, both political parties opted to advance the approach that does not work. Today, that is much less true.

There can be many details and nuances to economic policy, but here I am talking only about the one big overriding fundamental issue, namely, which is better for economic success and prosperity: higher taxes and bigger government, or lower taxes and smaller government? They are opposites, and they can’t both be right. Today, the Republicans, and President Trump, whatever else you might think about him, are (mostly) advocates for lower taxes and smaller government. The Democrats are universally advocates for higher taxes and bigger government, although not all of them go to the same levels of extremism.

We’ve just been through a big real-world experiment to test the two competing theories. . . .

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