Author:Suderman, Peter

AT THE HEART of Elizabeth Warren's campaign for president--and of her entire career as a politician and public intellectual, really--are two simple ideas.

The first is that the economy is fundamentally broken. This downer of an idea was present in the speech that launched her presidential campaign on February 9, 2019, in which she declared that "millions and millions of American families are also struggling to survive in a system that has been rigged by the wealthy and the well-connected" and in which she insisted that the only response was to fight for "big structural change."

It was present at the first Democratic primary debate, in which she inveighed against corporate profits and monopolistic businesses and corrupt lawmakers who have "made this country work much better for those who can make giant contributions, made it work better for those who hire armies of lobbyists and lawyers, and not made it work for the people," and in which she scored the opening night's standout moment by offering a full-throated argument for the elimination of private health insurance.

It was present in the 2007 essay that imagined what would eventually become the Consumer Financial Protection Bureau, a federal agency premised on the notion that American families were being "steered into overpriced credit products, risky sub-prime mortgages, and misleading insurance plans" and that many of these products needed to be regulated as pervasive dangers to the American family.

It was present in the very title of her breakout 2004 book, The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke, which promoted a systemic view of America's economic fragility, driven by data that Warren had compiled during her career as an academic bankruptcy researcher.

It was explicit in her campaign's July broadside, "The Coming Economic Crash--And How to Stop It," which cast Warren as a prophet of economic collapse and proposed an array of economic policies, from a $15 minimum wage to enforcing restrictions on certain bank loans, that she argued could stave off the crisis.

And it is present, in spirit if not in word, in each and every one of the slew of white papers and policy proposals that have poured forth from Warren's campaign as if she were running a think tank rather than a presidential bid.

In the space of just a few months this year, Warren released plans for everything from ending drilling on public lands to breaking up Facebook and Amazon to imposing a new industrial policy of "economic patriotism." She wants to spend $500 billion on affordable housing and trillions more to cancel most student debt, make public college tuition free, and offer subsidies for child care. And she has proposed paying for these costly programs with wealth taxes designed not only to offset the price tag of new government spending but to help reduce economic inequality by shrinking large stores of wealth.

This brings us to Elizabeth Warren's second big idea: The economy is fundamentally fixable--but only if Elizabeth Warren is manipulating all the levers of power.

Warren's penchant for wonky policy detail has defined her candidacy: "Elizabeth Warren has a plan for that" has become a rallying cry and a slogan, one her fans have plastered across an array of T-shirts and campaign signs. Warren has happily embraced this persona, joking with crowds that her focus on the details of federal agencies would turn them all into nerds.

Warren is running as a wonk populist, the sort of politician who could give a rousing speech at a picket line in the morning, then stroll into a conference room and offer detailed comments on a new regulatory scheme in the afternoon. Her campaign is an attempt to marry rabble-rousing economic grievance to high-class technocratic solutionism.

The Warren worldview is thus both bloodless and moralizing. It is also dangerous, combining self-righteous certainty about the perils of the economy with dubious data and an instinct for bureaucratic paternalism. Warren wants the federal government to be the American economy's hall monitor, telling individuals and companies what they can and can't sell or buy and making some of the nation's most successful businesses answer to her demands.

It seems to be working. During the first six months of 2019, this strategy vaulted Warren into the top tier of Democratic primary contenders, helping her raise more than $19 million during the year's second quarter and placing her among the top three or four candidates in the party's crowded field. Focus groups and political reporting have consistently found that Democratic voters are warming not only to the substance of Warren's ideas but to the very fact that she has them.

Yet Warren's wonkery and her populist fury are both based on myths and misdirection, often perpetuated by Warren herself. Although she styles herself as a data-driven champion of the little guy, she has run a campaign based on a dismal representation of the U.S. economy that fails to account for factors that complicate her story. And although she has received kudos for the volume and specificity of her plans, Warren has a history of pushing misleading research and cherry-picked data designed to support politicized conclusions.

So, yes, it's true that Elizabeth Warren has a lot of plans. The problem is that they don't all add up.

TO UNDERSTAND THE deep roots of Elizabeth Warren's economic pessimism, you have to know a little about her most well-known book, The Two-Income Trap. And to understand The Two-Income Trap, you have to understand Warren's early work as a bankruptcy researcher.

Warren first rose to prominence as the co-author of a pioneering study of consumer bankruptcy, which was published in book form in 1989 under the title As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America. Warren and her co-authors based the book on a trove of court data from about 1,500 bankruptcy cases in Pennsylvania, Illinois, and Texas during 1981.

The book made a splash, partly because of its reliance on real-world case studies and partly because of its stark language. "Bankrupt," reads the book's opening line. "The single word is a body blow, like 'Dead.'" Warren was an academic, working with other academics to code and statistically analyze a trove of unique data. But she wasn't just poring through variables and spreadsheet entries. She was telling a story in order to make an argument about politics and policy.

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. In the years that followed, Warren would go on to become one of the nation's most prominent advocates of making bankruptcy easier, more lenient, and more accessible.

But that story had some notable problems. Among others, it was based on cases from 1981, a recession year when consumers would have looked worse off than usual. It was released years later, after a significant reform to the bankruptcy code in 1984 rendered its picture of American bankruptcy somewhat out of date. And it wasn't clear whether data from the three selected states could be generalized to the population as a whole.

Within the world of academic bankruptcy research, the book generated controversy. In the 1990-91 edition of the Rutgers Law Review, Rutgers law professor Philip Shuchman, a star of the 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...

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