Elizabeth Warren, forthright looter

Statue of Atlas, that became the cover illustration for Atlas Shrugged. Is the Third Option a variation on this theme?
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Elizabeth Warren is an example of the new normal in Democratic Party politics: forthright and honest about wanting to loot the rich. This does not make her platform any more valid. Nor will voters be more likely to accept it. But, unlike her would-be colleagues in the Senate, she makes no bones about it.

Who is Elizabeth Warren?

Elizabeth Warren is a Leo Gottlieb professor of law at Harvard Law School. Her page at Harvard Law lists a sample of her work—eight papers saying, in effect, that ordinary citizens can’t make it in America because “the rich” won’t let them. She doesn’t always get her facts straight. This paper in Democracy Journal is a prize example:

It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street–and the mortgage won’t even carry a disclosure of that fact to the homeowner. Similarly, it’s impossible to change the price on a toaster once it has been purchased. But long after the papers have been signed, it is possible to triple the price of the credit used to finance the purchase of that appliance, even if the customer meets all the credit terms, in full and on time. Why are consumers safe when they purchase tangible consumer products with cash, but when they sign up for routine financial products like mortgages and credit cards they are left at the mercy of their creditors?

She goes on to blame lack of regulation in the home-mortgage market. She wrote the above in the summer of 2007. But she should have written to one of her State’s congressmen, Representative Barney Frank (D-MA), to complain. He, after all, co-sponsored the Community Reinvestment Act that made those distortions in the market possible. He also forbade anyone to look into the doings of “Fannie Mae” and “Freddie Mac,” the two government-sponsored mortgage buyers. Result: risky lending and easy money.

So extreme was she that even her friend John Kerry couldn’t muster enough votes, in a Democrat-controlled Senate, to confirm her as head of the Consumer Financial Protection Bureau. Undaunted, she now will try to enter the Senate itself. She will run for “The Kennedy Seat,” after Scott Brown wrested it away from the Democrats in January of 2010. (Senator Edward M. Kennedy, D-MA, died in 2009.)

What does Elizabeth Warren say?

One week ago, Elizabeth Warren made a campaign stop. A friendly videographer shot the video that appears below. Here is a relevant excerpt, on the subject of class warfare:

I hear all this, you know, “Well, this is class warfare, this is whatever”—No! There is nobody in this country who got rich on his own. Nobody. You built a factory out there—good for you! But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory, and hire someone to protect against this, because of the work the rest of us did. Now look, you built a factory and it turned into something terrific, or a great idea—God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.

A critical analysis

Sir Henry Bessemer's steel-making machine. Elizabeth Warren denies the gift of Sir Henry Bessemer to a worker's life.

Sir Henry Bessemer's original converter, last of its kind. Photo credit: Duncan Harris, CC BY 2.0 Generic License.

First, as Daniel Indiviglio at The Atlantic reminds her, that factory builder did pay more than his share toward the things she mentioned. That includes the road, the police officers and firefighters, and the school. Those, by the way, are State and local projects, and State and local taxes support them. None of this is or should be at all relevant to the job of United States Senator.

Indiviglio also points out that everyone can still use the road, and send his kids to the school. (Though why he would want to send his kids to a government school is another question.) Everyone may rest secure in his person from those marauding bands that Elizabeth Warren mentioned.

Now to something that Indiviglio did not mention: Elizabeth Warren seems to imply that the workers in the factory could make its products without the factory. All that the factory builder provides is a paycheck. But Ayn Rand showed that any factory builder provides much more:

If you worked as a [medieval] blacksmith, [your] whole…earning capacity would consist of an iron bar produced by your hands in days and days of effort. How many tons of rail do you produce per day if you work [in a steel mill]? Would you dare claim that the size of your paycheck [depends] solely [on] your physical labor, and that those rails were the product of your muscles? The standard of living of that blacksmith is all that your muscles are worth; the rest is a gift from [the steel mill builder-owner].

And Sir Henry Bessemer, and James Watt, and Thomas Edison, and every other inventor who designed the parts of that factory. The nature of that gift is an idea—even a “great idea.” That is why those rich factory builders deserve to be rich—unless they are embezzling vast sums from the public treasury with business plans that they know will fail.

Elizabeth Warren admitted one thing that she probably did not mean to. Why mention “marauding bands”? Are they, then, her natural constituency? Does she seek to obtain by a vote what the pirates of the Spanish Main once obtained with their guns? Does she really want to say that anyone is safe from marauding bands, so long as he has nothing worth stealing?

Ironically, Elizabeth Warren has just allied herself with the very “anarchist libertarians” that Daniel Indiviglio finds fault with. He mentions those who do not want a universal tax to pay for police or fire protection. And indeed, some commentators have said that permanent police forces are dangerous to human liberty and even unconstitutional. They imply that a holder of property, having the most to protect from theft or pillage, ought to guard his own goods with his own security forces. They say further that no one else has any reason to support the permanent standing army that, they say, a police force is.

How does this differ from what Elizabeth Warren says? What she says is worse. At least that rational anarchist would let ordinary residents arm themselves, and come together to resist the marauders. (The Dalton Gang in the American West died when they rode into a town, and the townsfolk stood on their upper-floor balconies and laid an ambush as withering as any in a canyon or defile.) But Elizabeth Warren belongs to a party that would take the guns away from the people. And by saying that the factory builder owes his success to the police, she now threatens to withdraw that protection unless he pays up exactly as she demands.

Law-enforcement officers have a phrase for what Elizabeth Warren describes: protection racket. Again, quoting Rand:

The removal of a threat is not a payment. The negation of a negative is not a reward. The withdrawal of [marauding bands] is not an incentive. The offer not to murder [a man] is not a value.

Featured image: this statue of Atlas became the cover illustration for the 50th anniversary edition of Atlas Shrugged. Photo: Lee Gillen, CC BY-SA 2.0 Generic License.