Harvard Law Professor Elizabeth Warren, who is a new member to the Obama team, received a tongue-lashing in the Wall Street Journal on September 30th. She is also the acclaimed author of “The Two Income Trap” which delivers a message which is critical to restoring the power of families in America.
I am sympathetic to author and Law Professor Zywicki’s criticisms of Warren as we come from the same libertarian George Mason cloth. And, I do understand that he is mostly attacking her questionable data analysis. I agree with him that this is troubling and the Senate should have had the opportunity to address these issues with Warren before Obama appointed her to lead an extremely powerful new agency named the Consumer Financial Protection Bureau which as Zywicki says has the power to
regulate or ban almost every consumer credit product in the country, yet it is beyond Congress’s power of the purse because its budget is guaranteed as a percentage of the Fed’s annual revenues.
She does avoid a discussion about the need for lowering taxes despite her presentation of Tax Foundation data showing that taxes increased significantly during the relevant time period. Instead, in the second half of the book which is committed to her policy solutions, she discusses remedies like bank regulation, the institution of usury laws, etc which should be completely ignored.
Taxes have been eroding family wealth for a good period of time and not just for the so-called middle class. A Univ of Chicago Law Prof recently drove this point home when he posted his family’s finances on his blog to show that he is hardly making it despite a combined two-parent income of over $250k. Liberals immediately jumped all over him as an elite snob who can’t possibly relate to his poorer compatriots. However, he was making a powerful point that The American Dream is becoming The American Nightmare.
We are clearly not as well off as we should be with student loans, credit card balances and mortgages consuming the typical young family. If you assume the Chicago Professor and his presumable Ivy League wife had student loans from Ivys, that alone may be enough to break the bank for them. So-called richer white collar people in America with jobs are typically just broke at a higher level than their poorer brethren with more expensive student loans, houses, cars and clothes.
It is really only those who own their own businesses that are “wealthy” but even that dream is being eroded with financial regulation, the federal health care bill and the expiration of the Bush tax cuts. For a family of four making $150k, for example, your tax bill will be going up by $4510 (see The Tax Foundation calculator to find your own burden). Who has an extra $4510 laying under their mattress during The Great Recession ? Shouldn’t that $4,510 be put into a savings account instead of Uncle Sam’s account ?
Despite her wreckless policy solutions and the data landmines she has laid, Elizabeth Warren does deserve a huge pat on the back for making an obvious point which most people continue to ignore: the two-parent working household does not work. I hope social conservatives are not blinded by her liberal public policy solutions and chumminess with Obama and his liberal friends. Instead, I hope conservatives will keep in mind that there is an opportunity for bipartisanship as she identifies a problem that is at the heart of the social conservative agenda: the family.