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
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 Hoarders” — the 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.
The Obama administration sought to replace this labyrinthine system with a single entry point — a sea change in how student loan servicing would work. Instead of dealing directly with private vendors, all federal borrowers would gain access to their accounts through an Education Department portal, with standardized forms and processes. A single vendor would take the lead in creating the system’s interface
.. In October, the government narrowed the field to three finalists
- Navient; the Pennsylvania Higher Education Assistance Agency (better known as FedLoan);
- Great Lakes
.. The winner was to be announced in February.
.. a particular piece of guidance from the Obama administration she struck down:
- that the Education Department should place great weight on a company’s track record when selecting student loan vendors, and should steer away from companies with histories of shoddy service or other problems.
.. that puts Navient — the nation’s largest federal student loan servicer ..
on stronger footing than it had been in bidding for agency contracts.
.. The Consumer Financial Protection Bureau responded ..
borrowers “should be able to repay their debt without having to deal with illegal loan servicing practices.”
.. Navient’s size makes it a very strong competitor — once past performance is played down.
.. The loan servicer has tremendous power to guide them through repayment options. Some plans stretch payment periods out for as long as 30 years, and others help qualifying students get a portion of their debt forgiven. Strategic use of those paths can trim — or inflate — the sum that a student ultimately pays by tens of thousands of dollars.