I’m constantly surprised by what happens in the world of politics. I didn’t think Donald Trump had any chance of winning in 2016, yet I was obviously wrong.
I also thought Elizabeth Warren’s political career would be crippled after people found out she fraudulently claimed Indian ancestry to gain special preferences in hiring at law schools. Yet she’s now a serious candidate to be the Democratic nominee in 2020.
So, instead of political prognosticating, I’ll stick with policy analysis, which is what I do in this clip from an interview about Sen. Warren’s plan to give Washington more power over capital markets.
Every single economic theory agrees that saving and investment play a key role in long-run growth and higher living standards. But who controls and directs how capital is allocated?
I prefer competitive markets, which reward decisions that make us more prosperous.
The socialists, by contrast, think government can directly control how capital is allocated. At the risk of understatement, that approach doesn’t have a good track record.
Elizabeth Warren prefers an indirect approach, which involves lots of regulation, taxation, red tape, and intervention. This cronyist approach also is misguided. Her corporatist agenda unavoidably will hinder the efficient (i.e., growth maximizing) allocation of capital and also reduce the overall level of saving and investment.
And that translates into less income for workers.
By the way, my disagreement with Sen. Warren’s policy agenda does not mean I have a pro-Wall Street perspective.
The bottom line: I support economic liberty, not big business.
P.S. Here’s some political humor that will be very appropriate if there’s a Trump-Warren race next year.
P.P.S. Here’s some satire regarding Warren’s class warfare.
P.P.P.S. On a serious note, I strongly recommend Kevin Williamson’s analysis of Warren’s fake populism.