Elizabeth Warren And The Roads

Elizabeth Warren has been getting a lot of attention on the Internet lately, inspiring progressives and infuriating libertarians with things she said in her appearance on Jon Stewart last week. I watched these three videos to try to get a sense of what was going on before realizing that the first one was from a Daily Show appearance in January 2010, not January 2012. But it doesn’t matter; it was all pretty much the same thing.

First let me say that Warren is a very smart and articulate person (she is a professor, after all), and I can see why liberals are falling in love with her (just listen to the cheers from the audience). She is very good at presenting her understanding of the problems with today’s system and her vision for fixing it, which is much different from, say, simply demagoguing your political opponents as corrupt. And since she is elevating the discourse to a level of political philosophy, and there seems a good possibility that she will continue to increase her attention at the national level (she is running for Senator of Massachusetts), I think it is worthwhile to express my severe disagreements with her philosophy.

After watching the videos linked above, I couldn’t help but be amused by the chasm between the alternate histories told by people of different philosophies. Warren’s history of the American financial system goes something like this: We had natural booms and busts every few years culminating in the Great Depression, after which we established new rules that led to peace and prosperity for fifty years. Then in the 80’s the industry stole away the regulators (how they did this she never quite explained) so they could get away with more things and increase their profits, and they caused the great crash of 2007-2009 and made us bail them out. This is funny because it is so completely different from the libertarian financial history, which goes something like this: We had booms and busts every few years that corrected themselves until the Federal Reserve was created in 1913 and the next bust became the Great Depression, and it was only so bad because the government kept trying to fix it, and we’ve been going downhill ever since. (I probably butchered both histories, but the point is you can use it however you need to back up your philosophy.)

So what is Elizabeth Warren’s philosophy? She talks a lot about the need to invest in infrastructure and research and education and these sorts of things, and how the system of government is corrupted by industries lobbying for special breaks and subsidies and so forth, and we just need to stop the lobbyists so that government can work for everyone. This sounds great.

Jon Stewart brings up Ron Paul’s philosophy that the more stuff the government does, the more it invites lobbyists to make sure they are doing that stuff in their favor, and that the only way to get the money out is to let the free market do stuff. Warren’s response is that such libertarian philosophy would give us “no future!” No bridges, no roads, no nothing. Therefore, “Government is what we do together!” Well, I have three problems with this response.

1. First, she might just be wrong. Libertarians are quick to point out all the hypothetical ways the free market could provide roads, and all the historical examples of it actually happening (Hawaiian road repair volunteers!). They point out how most bridges used to be constructed without the government. They think it’s funny that liberals want mass transit to replace polluted driving because they argue that the government’s overspending on roads is what led to all this polluted driving in the first place, and that the free market wouldn’t have incentivized those evil cars so much. (For all of the above, see this reddit thread.)

But let’s assume that maybe she’s not wrong. These days we’re so used to the government providing all of our infrastructure that it’s a little scary to imagine life without it. Maybe there are things in life that would provide benefit to everyone, but they wouldn’t naturally emerge in a free market because it would cost individuals more to provide than it would be worth to them individually. Economists call these things “public goods.” Maybe infrastructure and education and research are public goods that allow the market to reap greater things than it would otherwise. Does this make her argument better? I don’t think so.

2. Even if infrastructure is a public good, it’s not the chief problem with our government’s finances. Warren seems to have a schtick about corporations not paying enough taxes, as if that is the primary reason we can’t fund enough things that might be public goods. She talks about how the percentage of GDP we spend on infrastructure or research is lower than other countries and lower than it used to be and how we’re threatening to lower it still, and she makes it seem like if we could just get corporations to pay more taxes then we could fund all this stuff like we really need to.

Well, I think that’s a little disingenuous (and I won’t get into the “should we even have corporate taxes” argument; I’m not smart enough yet to have an opinion about it). Taxes from corporations are only one of several forms of government income, and infrastructure spending is only one form of government expense. There is no real link between them and there are many other factors involved. I saw no talk on these videos of our debt or the fact that are borrowing 40% of our budget. Taxing corporations more to spend more on infrastructure won’t fix that. All of this ignores the real elephants in the room: Social Security, Medicare, and Medicaid, which now make up 43% of the budget, and Defense, which makes up another 20%. She probably wants to spend less on defense, and I would give her that; libertarians want to spend less on defense too. But SS/M&M are almost half of the budget now, and projected to grow further. If we can fix those, hey, I’ll give you more discretionary spending for public goods without doing anything about corporate taxes. But it’s more fun to talk about increasing a 9% sector of income to help pay for parts of a 19% sector of expense without addressing the real giant issues.

3. But, most importantly, even if we decide we want the government to provide public goods and we make it an appropriate part of our budget, she still has completely sidestepped the question of how to remove lobbyists from screwing things up. I heard her explain the problems of lobbyists multiple times in these videos, and I heard her explain why she thinks the libertarian philosophy won’t fix it, but I never heard her explain how she thinks her philosophy will fix it. She says we need leaders who are accountable! Well of course we do, but how does wishing for accountable leaders stop the lobbyists?

It comes back to the fundamental agreements and disagreements between the Tea Party and the Occupiers. They both agree that the rich and powerful are corrupting themselves with the government to get an unfair cut of the pie. But while the Tea Party sees that as evidence that the government should stop cutting up the pie, the Occupiers seem to think that the government should just kick out the lobbyists so they can cut the pie more fairly. But as long as the government is doing the cutting, there will always be an incentive for the connected to get themselves a better piece! She doesn’t like Paul’s philosophy of cutting the cutting, but I haven’t heard her say one word yet about how to keep the cutting and make it fair. (If she does have a plan and she just didn’t articulate it on the twenty minutes of Stewart I just watched, I apologize. Please tell me what it is.) It seems to me that Warren has a lot of good intentions and ideas that sound great but that she may be trying to ignore the way the world works. Dreams and fantasies don’t produce a better world, and I hope too many people don’t fall for it.