If Elizabeth Warren really wants to unrig the system, she should focus on the Dream Hoarders

Odds are that you have not been following the recent libertarian dust-up over the merits of an Elizabeth Warren presidency. To give a brief recap: The main contenders were Will Wilkinson and Jerry Taylor of the “liberaltarian” Niskanen Center, who have been Warren-friendly to varying degrees; their opponents were colleague Samuel Hammond, along with Tyler Cowen of the more traditionally libertarian Mercatus Center, who touched off the whole debate with a withering critique of Warren’s policies.

A point-by-point exploration of their arguments would exceed the space allotted for this column by several thousand inches. But I think one can sum up the libertarian approach to Warren with a single question: How big a problem do you think billionaires, and the mega-successful corporations they helm, pose to the average American? Actually, come to think of it, I think that’s about how you’d sum up the question of Warren from any angle.

Which is why this debate ultimately matters to a lot more people than just some cranky libertarians: It speaks directly to a whole lot of young people who see that the economy doesn’t work for them the way it did for their parents and grandparents, and therefore conclude that somewhere along the way, the people it is working for — the barons of finance, the giants of Silicon Valley — must have rigged the system in their favor.

To be fair, they’re not entirely wrong. As Adam Smith once wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” Bankers and tech executives very much included. So I find myself nodding in agreement with Wilkinson — and, by extension, with the progressive base of the Democratic Party — when he says: “Warren’s general diagnosis of the problem — it’s a rigged system of anticompetitive rent-seeking enabled by insufficiently democratic and representative political institutions — is broadly similar to my own.”

Yet they’re not entirely right, either. Are big corporations, or billionaires, or banks, or tech giants, or health insurers and pharmaceutical firms — to name some of Warren’s favorite targets — really the reason that young people are struggling

  • with enormous student loans? Are they the reason that millennial homeownership lags that of their parents? Are they the
  • reason that recent college graduates are more likely than their elders to be underemployed? Have they
  • driven the cost of health insurance to its current stratospheric levels?

Sure, Warren may be eager to sic her Consumer Financial Protection Bureau on your mortgage lender if you fall afoul of some obscure clause, but that’s not the problem for most Americans. They’re much more likely to struggle with finding affordable housing in prosperous cities. In fairness, Warren does have a plan to ease the zoning regulations that cause the shortage — but for some reason she rarely talks about it on the campaign trail, possibly because it’s constitutionally dubious, but more likely because it would alienate her affluent suburban base.

Similarly, Warren is eager to forgive student loans — a $1.6 trillion transfer to some of the most affluent members of society — but not to attack degree creep, which has walled off most of the best jobs for those who hold a bachelor of arts while enriching a lot of colleges. She targets insurers and drugmakers, but not the hospitals and medical workers who drive most of our health-care costs.

Too many of her proposals are like this; they focus on corporate villains or billionaires while ignoring the much broader class of people that Richard Reeves of the Brookings Institution dubbed the “Dream Hoardersthe well-educated upper-middle-class people who are desperate to pass their privilege onto their kids, and are unhappy about the steadily mounting cost of doing so. They’re Warren’s base.

Unfortunately, the Dream Hoarders — and I include myself in their number — are a much bigger problem for the rest of America than the billionaires whose wealth Warren promises to expropriate. Those billionaires got that way by building companies that disrupted cozy local monopolies, and they fund coding camps for high-school dropouts; Dream Hoarders

  • protect their professional licensing regimes and
  • insist on ever more extensive and expensive educations in the people they hire. Dream Hoarders also
  • pull every lever to keep their own housing prices high — and poorer kids out of their schools — while
  • using their wealth to carefully guide their children over the hurdles they’ve erected.

Which may be why the best predictor of a neighborhood with a low degree of income mobility is not the gap between the top 1 percent and everyone else — the gap that Warren focuses on with all her talk of taxing billionaires — but

If you really want to unrig the system, you need to focus less on a handful of billionaires than on the iron grip that the Dream Hoarders have on America’s most powerful institutions — including, to all appearances, Elizabeth Warren’s campaign.

William Dalrymple on the ruthless rise of the British East India Company

The outrageous story of a group of financiers from a poor and damp island on the outer rim of Europe, who created a private company that became the biggest military and political power in all of India
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Planet Money: Episode 945: The Liberty City

Art Martinez de Vara had a dream: To build a whole new kind of city, one with as few taxes and regulations as possible. That city is Von Ormy—a one-exit kind of place on the outskirts of San Antonio, Texas.

On today’s show, how Von Ormy went from being an unincorporated stretch of land, to a so-called “Liberty City.”

Charles Murray: Why America is Coming Apart Along Class Lines

Charles Murray, one of America’s most influential social policy thinkers, has come out with a widely discussed new book called Coming Apart: The State of White America, 1960-2010, which argues that Americans are splitting into two divergent classes, and that this growing divide could end American life as we have known it.

A self-described libertarian, Murray started his career as a liberal Democrat who spent six years in the Peace Corps and voted for Jimmy Carter in the 1976 presidential election. His political transformation came while he was researching his landmark 1984 book, Losing Ground: American Social Policy 1950-1980, which marshaled exhaustive evidence that American welfare programs were harming the very people they were supposed to be lifting out of poverty.

Losing Ground was fiercely denounced by the political left, but soon won mainstream acceptance that the War on Poverty was failing. The simple fact is there wouldn’t have been welfare reform in the 1990s without Losing Ground.

The Bell Curve: Intelligence and Class Structure in American Life, Murray’s 1994 collaboration with Harvard psychologist Richard Herrnstein, was more controversial. The book maintained that differences in genes contribute to differences in IQ, which in turn play a significant role in the life outcomes of individuals. Most controversially, Herrnstein and Murray argued that various ethnic groups have distinct differences in inherited intelligence. (Economist James J. Heckman reviewed The Bell Curve for Reason back in 1995: http://reason.com/archives/1995/03/01…)

Murray has written more than 20 books, including What It Means to Be a Libertarian: A Personal Interpretation, and he’s currently the W.H. Brady Scholar at the American Enterprise Institute .

Reason’s Ronald Bailey sat down with Murray in March for a wide-ranging discussion of how his earlier work informs Coming Apart, why he remains libertarian in his outlook, and whether younger Americans face an relentlessly negative future.

Approximately 35 minutes.

Written and produced by Jim Epstein.