RUTHFULLY YOURS

In the polls for the past several months, the top three among the contenders for the Democratic nomination for President have been Joe Biden, Elizabeth Warren, and Bernie Sanders. I doubt that Biden will make it all the way to the end of this marathon; and I sense that Sanders’s shtick has started to wear thin and that he is fading. That would leave Elizabeth Warren as the most likely to get the nomination.

Heaven help us.

Warren has her own shtick. The basic idea is to claim that the U.S. economy is fundamentally not working for most people, and then to stir up resentment against anybody who has achieved any success, aka “the wealthy” or “the well-connected” or “the corporations.” These people are oppressing you, and you need Elizabeth to fight back. In her February 2019 speech announcing her candidacy, it was that “millions of American families are . . . struggling to survive in a system that has been rigged by the wealthy and well-connected.” Then there are the evil banks, who “steer [you] into overpriced credit products, risky sub-prime mortgages, and misleading insurance plans.”

But don’t worry — Warren has all the answers, in the form of some dozens of “plans,” each one a top-down directive from the federal government to get those evil exploiters to behave. Universal child care! 100% clean energy! Expanding social security! Hundreds of billions for housing! Trillions for free college and debt forgiveness! Wealth taxes on the rich! Tens of trillions for tackling the “climate crisis”! More tens of trillions for free health care for all! And those are just a small sample. It’s a good thing that the government’s resources are infinite. You name it, and there’s a “plan” and a new collection of regulations and orders and a few hundred billion or a few trillions or tens of trillions from the infinite free loot from above that will solve the problem instantly, at least once Elizabeth is in charge.

In the aggregate she is proposing a total transformation of the U.S. economy, from one fundamentally run by the people and their privately-owned organizations, to one fundamentally controlled and directed by the government. She doesn’t claim the mantle of “socialism” the way Bernie does, but it’s hard to see how there would be much left of the private economy if all — or even half — of Warren’s “plans” got implemented. Does she not perceive any down side here?

Let’s stop for a minute and consider how the U.S. is actually doing compared to other countries on the world stage. Here are three lists of countries ranked by per capita GDP. I’ll use the list from the World Bank, which has 2018 data for many countries. The U.S. ranks number 8, at $62,641. But if you look at countries ranked 1 to 7 (Luxembourg, Switzerland, Norway, Ireland, Iceland, Qatar, and Singapore), you quickly realize that they have specialized niche economies and very little population; indeed, the whole seven of them together have less population than California. The U.S. is the only country in the world that delivers real middle class incomes to the large majority of a population in the hundreds of millions. Shouldn’t we be at least a little curious about how this has been accomplished, let alone careful not to screw things up?

Check out the per capita GDPs of the other countries in the world with populations of 200 million or so and up:

• China: population 1.4 billion, per capita GDP $9,771

• India: population 1.3 billion, per capita GDP $2,016

• Indonesia: population 270 million, per capita GDP $3,894

• Pakistan: population 216 million, per capita GDP $1,473

• Brazil: population 207 million, per capita GDP $8,921

• Nigeria: population 200 million, per capita GDP $2,028

• Bangladesh: population 163 million, per capita GDP $1,698

What an embarrassing collection of losers! Our poor would be considered rich in every single one of those places. None of them has per capita GDP as much as 20% that of the U.S., and some have per capita GDP less than 3% that of the U.S. And what has kept them down? All of them have suffered from choosing one or multiple items off the progressive policy menu: government-directed economy, government control of major businesses, explicit socialism, rule by strong men and/or one party rule. In other words, to a greater or lesser extent, these countries have followed the policy prescriptions that Elizabeth is proposing for us. And they show where that comes out.

But at least, you might argue, in these countries, in return for large doses of socialism or statism or strong-man rule, they have less income inequality than the United States. Actually, they don’t, at least not to any meaningful degree. Here is a World Bank list of the income share of the top 10% of population by country. For the large population countries, the figures are: China 29.4%, India 29.5%, United States 30.6%, Indonesia 29.5%, Pakistan 28.9%, Brazil 41.9%, Nigeria 32.7%, and Bangladesh 26.8%. And many of those countries very likely play with their numbers. Even if you take their numbers at face value, once you eliminate the top 10% of population by income, pretty much everybody else in these countries would be left in poverty by our standards. And that includes China. The truth is that progressive income redistribution policies in practice increase rather than decrease income inequality. For more on that subject, go here.

And then we have the whole subject of Ms. Warren’s academic career. Undoubtedly, you are aware that Ms. Warren listed herself as having “Native American” ancestry at the time she was moving up the academic ladder to Harvard. Warren claims that the “woman of color” thing had nothing to do with her scoring the Harvard appointment. You can believe that if you want.

What you might be less aware of are the serious accusations of academic fraud in the research that she produced during the same academic ascent. The current issue of Reason Magazine has a lengthy piece by Peter Suderman, title “Elizabeth Warren’s Plans Don’t Add Up,” summarizing among other things the status of the accusations of academic misconduct. Warren’s breakout book came out in 1989, titled “As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America.” According to Suderman:

The story was that rapacious credit card companies, rather than consumer overspending, were primarily responsible for a run-up in consumer debt and the resulting sense that household budgets had grown more precarious. The book’s authors saw bankruptcy in broadly sympathetic terms, as a financial safety net for struggling families.

But there were serious questions as to whether the underlying data on which Warren relied supported her hypothesis. From Suderman:

In the 1990–91 edition of the Rutgers Law Review, Rutgers law professor Philip Shuchman, a star of the [bankruptcy] field who had initially recommended a $110,000 grant to help fund Warren’s research, wrote a scathing and brutal assessment of the book, calling into question the authors’ methods, data, and scholarly ethics. Shuchman, who died in 2004, accused Warren et al. of making “serious errors” and refusing to produce raw data that would allow other scholars to check their conclusions. His review said the research exhibited an “anti-scientific bias” and accused the authors of engaging in “repeated instances of scientific misconduct.”

Schuchman’s Rutgers Law Review article is behind a pay wall, but you can get some more details about it and some choice quotes from a summary at Legal Insurrection here. Excerpts (Schuchman via LR):

Most of their study replicates several earlier research publications. These are hardly mentioned. The writers make extravagant and false claims to originality and priority of research. There appear to be serious errors in their use of statistical bases which result in grossly mistaken functions and comparisons. Some of their conclusions cannot be obtained even from their flawed findings. The authors have made their raw data unavailable so that its accuracy cannot be independently checked. In my opinion, the authors have engaged in repeated instances of scientific misconduct. [emphasis added] . . .

This book contains so much exaggeration, so many questionable ploys, and so many incorrect statements, that it would be well to check the accuracy of their raw data, as old as it is. But the authors arranged matters so that they could not provide access to the computer printouts by case, with the corresponding bankruptcy court file numbers, thus preventing any independent check of the raw data in the files from which they took their information. [footnotes omitted]

As far as I can find, up to today, nobody has been able to obtain the data to check Warren’s work in this book. In my view, obfuscation of data is the number one hallmark of academic misconduct. See also the case of Michael “Hockey Stick” Mann.

And that book was just the beginning. After that book, Warren made her big thing the claim that millions of Americans were being driven into bankruptcy by “medical debt.” The criticism of that claim has been at least as severe as the criticism of her 1989 book. I won’t bore you with further long quotes, but here are some links to serious criticisms: From Megan McArdle in the Atlantic, June 4, 2009, “Elizabeth Warren and the Terrible, Horrible, No Good, Very Bad, Utterly Misleading Bankruptcy Study”; also Megan McArdle in the Atlantic, June 5, 2009, “Why Elizabeth Warren’s New Bankruptcy Study is So Bad”; Todd Zywicki in the Wall Street Journal, August 14, 2007, “The Two-Income Tax Trap.” I’ll give you one quote from McArdle’s June 4, 2009 piece:

Elizabeth Warren has another study out showing that medical expenses contribute to more than half of all bankruptcies–indeed, this time, it’s 70%, up from the 50% she found in 2001.  . . .  The fact that it seems to disagree with every other study I’ve ever read that is not authored by Elizabeth Warren, and also, the self-reports of the people in her study (only about a third of whom attribute their bankruptcy to a health problem) could just be a fluke.  It doesn’t necessarily mean that it’s wrong.  Yet upon closer examination, it turns out that it is not just wrong, but actively, aggressively wrong. Warren and her co-authors have obscured important and obvious facts that call the integrity of the work into serious question.

Note that Ms. Warren was not just innocently misinterpreting some data in these pieces. She was aggressively misusing data to argue that millions of Americans were being forced into “medical bankruptcies,” and therefore the only solution was government takeover of the whole healthcare system.

Yes, this is the likely leading contender for the Democratic nomination for President.