She and Piketty also discussed loan forgiveness, a more direct and sensible way to alleviate student debt. But that’s a little too extreme for American politics, hence Warren’s fairer-sounding but ill-conceived alternative.
What doesn’t seem too extreme would be a discussion of how to bring down the cost of college, rather than more subsidies to finance its sticker price. Of course, that’s going to be a little less appealing to some of Senator Warren’s fans — on, say, the Harvard faculty, where Warren drew a salary of about $350,000. Of course, high salaries for professors at Harvard Law School aren’t quite the main driver of tuition inflation, but Warren has been shy about talking about why her former employers charge their students so much (while pumping a great deal of federal taxpayer money into the Massachusetts economy, incidentally). The easy, populist answer is just to keep giving students more money to afford those prices; the underlying policy problems (or proposals for outright federal funding) go undiscussed.
Warren gave the issue of taxes the same facile treatment: She described to repeated applause how wealthy Americans have carved out loopholes and benefits in the tax system for themselves, as if such provisions were a major driver of economic inequality.
Yes, large corporations and some wealthy individuals fight for privileges in the tax code. But the benefits they get — a preferential rate for capital gains, for instance, or accelerated depreciation schedules — have some obvious principled and empirical justifications, and at most they accrue disproportionately to the wealthy and (sometimes) larger corporations. These individuals and firms face higher statutory rates, and middle-class Americans and small-business owners are eligible for — and benefit from — these breaks too. If you add up the debatably unfair tax treatment of hedge-fund and private-equity managers, plus the deduction for loans on yachts and second homes, depreciation for corporate jets, and a few more provisions of the tax code that really do exclusively work for the wealthy, you’re talking . . . a negligible amount of revenue.
The biggest handouts in the individual income-tax code are in fact some of the pillars of the existing American middle-class welfare state: generous subsidies for health care, education spending, and home mortgages. In a number of cases, in fact, Warren wants these to be bigger, not smaller — and they’re most useful to the kind of dual-income-no-kids and upper-middle-class households that make up Warren’s base. (In another odd depiction of reality, she said that the “basic principle” behind Paul Ryan’s House Republican budget is to “preserve lots of loopholes,” when the opposite is the case.)
America’s tax system is relatively progressive. The idea of a large federal redistributive income-tax system was once, Warren noted, considered revolutionary and unrealistic to boot, but she’s not proposing any grand next step. What would that step be? Our government does less to reduce inequality than Tom Piketty’s does not because we don’t tax rich people, but because we don’t tax middle-class people much and give less money to the poor — fixing that does not seem to be a major plank in the Warren plan.
Warren’s agenda, left-leaning as it is, isn’t about rigorous progressive examination of what’s gone wrong with our system or how to fix it. It’s about intuitively appealing ideas and pleasing particular constituencies. Of course, this is pretty good politics — as the number of attendees who told me they want Warren to run for president seems to suggest.
But her fan base may end up disappointed. For one, she was a reluctant Senate candidate, and a Warren for President campaign still seems a far-off dream. And Professor Piketty — perhaps sensing that she’s as good as the left wing of American politics has these days — wasn’t about to say it, but Elizabeth Warren isn’t an economic expert or a progressive policy crusader. She’s a talented populist who sells clever but unserious proposals with a sense of academic sophistication that makes Bostonians feel like they’re clapping for someone whose views are an intellectual cut above Ed Schultz’s. In the end, they’re not. But they definitely are clapping.
— Patrick Brennan is an associate editor at National Review.