Elizabeth Warren's economic plan so bad even CNN says it will crash the economy
It doesn't get worse for a leftist when even CNN is warning that your "economic solution" to the economic problems you've laid out are going to destroy the economy.
Democratic presidential candidate Elizabeth Warren came out with a big, serious-looking economic plan intoning about a coming economic crash, her own supposed ability to forecast such things, and then calling for free college, a soaring minimum wage, more Dodd-Frank regulations on big bad banks, and lots of free stuff. It ran at the top of the screen on RealClearPolitics yesterday afternoon, suggesting it's something likely to be talked about.
Christina Alesci, a plain-vanilla CNN "politics and business correspondent" (not one of those politicized talking heads — an actual reporter), blew the whole thing out of the water:
Here's the Grabien transcript:
KING: "Senator Elizabeth Warren out with a new warning today. She says an economic crash is coming. She also claims she has a plan that could prevent it. In a new 'Medium' post, the 2020 presidential contender writes, 'I warned about an economic crash years before the 2008 crisis, but the people in power wouldn't listen.' She goes on to add, 'Now I'm seeing serious warning signs in the economy again, and I'm calling on regulators in Congress to act.' The Massachusetts Democrat bases her prediction on a number of reasons, including growing household debt and corporate debt, and what she calls a manufacturing recession. Warren also faults President Trump for chaos in the form of the trade war with China, as well as his comments on Brexit. CNN's Cristina Alesci joining us now from New York. Cristina, Warren did get out ahead of the 2008 crisis warning it was coming, but there is some pushback to her calculations now saying she might be too alarmist. What are they?"
ALESCI: "Right. Two things Warren is doing. One, really playing off the PTSD the country suffered post-financial crisis. And number two, she's proposing some solutions that actually might create another crisis. Now, let me explain each of those. Number one, she points to several data points that say the alarm bells should be ringing for a financial crisis. Well, one of the things she points to is the level of corporate debt. Now, while risky loans to corporations have increased post-financial crisis, the ability for those companies to keep up with payments has also increased. So we're not seeing the kind of default rates that would be alarming at this point. Now I'm not saying that's not a metric we should be paying attention to. All I'm saying is that Elizabeth Warren is shaping this conversation in a way that's politically convenient for her. Now, as far as her policy proposals, she is recommending lowering rents, offering affordable child care, offering free tuition at colleges. All of that costs money and the American public should be asking how do you pay for it? One way would be to increase taxes. Another way is to increase government debt. This is the issue the American people should be actually focused on because many experts say if we don't get control of our debt over the next ten years, we could be facing a fiscal crisis. And that would be extraordinarily harmful to our economy."
KING: "I've been here long enough to remember when politicians sometimes in both parties talked about the debt. That was a long time ago."
Alesci's no-brainer point was that all of these Warren solutions cost money, and Warren doesn't seem to think spending the country into the ground is going to be a new problem. Warren's only two ways of enacting her vast giveaway program are through raising taxes, which she implies she's all in for on wicked big corporations, or else through money-printing, same sort of thing that got Venezuela into its economic morass with quintuple-digit inflation. Same sort of thing that got any country experiencing an economic crisis, actually — Zimbabwe 2007, Argentina 2002, Thailand 1997, Indonesia and Russia 1998, Serbia 1994...even the U.S. experienced some of this during the Carter years, too, prompting the Volcker rate hikes (as any old financial journalist can tell you). Alesci is absolutely right. Warren's money-flinging solution is going to come out of someone's hide, and guess what — it's the little guy who's going to pay through the nose eventually. Just ask an Argentinean.
Three other problems with Warren's proposal also stand out.
One, her claim to being this great economic forecaster, someone so very much smarter than the rest of us, is gag-inducing. Everyone was wrong but I was right. Ummm, no. Financial journalists know who the good economic forecasters are, and Warren is not one of them.
Two, the era she talks about as the golden age was the Obama era, that slum of a decade, the decade of extended one-percent subpar growth and zero jobs, whence she enacted her Consumer Financial Protection Bureau. That turned out to be an unaccountable and extremely corrupt government morass, famous for its thievery, its focus on destroying small-fry players such as payday lenders, while big ones who donate to Democrats, such as Wells Fargo, got away with murder. The whole thing operated as a slush fund for Democrats. If the election of Trump in 2016 is any indicator, voters don't want more of that.
Third, her current diagnosis (with all her forecasts) is extremely suspect, because Warren's been known to fake exactly this kind of data in the past. CNN sums up Warren's diagnosis as one of corporate borrowing, consumer borrowing, and a manufacturing recession as the problem. In the Trump economy, the latter is unadulterated bee ess. In the case of the former, how taxing corporations and consumers would solve that is a mystery to anyone with a brain. Taxing corporations would slash jobs, returning them to Obama-era hiring levels, as would raising the minimum wage. As far as taxing consumers to pay for all that free stuff, well, that would reduce incomes to Obama-era levels, too, something that President Trump has only begun to reverse with his economic decisions.
The CNN reporter is utterly right. One can only hope that the whole thing was planned, CNN is hoping to knock Warren out in the interest of getting Kamala Harris the nomination (this seems to be their plan), and the reporter will experience no career repercussions from CNN or the howling leftist Twitter mob which is sure to get activated, all for stating the obvious.
Image credit: CNN video screen shot via Grabien.