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Topic: Thomas Piketty

Elizabeth Warren and the Right

While many on the left seem to be pining for a populist 2016 campaign from the likes of Elizabeth Warren, the truth is that a Warren campaign probably has at least as many backers among conservatives. That’s not only because it would mean Hillary Clinton wouldn’t skate to her party’s nomination virtually unopposed (or opposed by Martin O’Malley, which is the same thing). It’s also because Warren was the last hope for the emergence of a serious intellectual liberalism. Yesterday’s Hobby Lobby ruling, however, made it clear such a liberalism is nowhere to be found.

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While many on the left seem to be pining for a populist 2016 campaign from the likes of Elizabeth Warren, the truth is that a Warren campaign probably has at least as many backers among conservatives. That’s not only because it would mean Hillary Clinton wouldn’t skate to her party’s nomination virtually unopposed (or opposed by Martin O’Malley, which is the same thing). It’s also because Warren was the last hope for the emergence of a serious intellectual liberalism. Yesterday’s Hobby Lobby ruling, however, made it clear such a liberalism is nowhere to be found.

On its list of liberal reactions on Twitter to the announcement of the Supreme Court’s decision, Mediaite includes this gem from Warren:

Can’t believe we live in a world where we’d even consider letting big corps deny women access to basic care based on vague moral objections.

Now, those who followed the case know that none of that is true. But just as disconcerting as the complete disregard for the facts is Warren’s dismissive attitude toward Christian belief. Warren sees opposition to abortifacients as “vague moral objections.” There was a time liberals argued that Warren was needed in the Senate to speak up for the people, to advocate for the Americans who weren’t getting a fair shake from their government. It turns out putting Elizabeth Warren in the Senate meant Americans would need protection for their basic freedoms against the government more than ever.

Warren’s delegitimization of religious belief and practice to empower government at the expense of the individual is coupled with her denial of the basic science behind Hobby Lobby’s objections to being forced to provide abortifacients. But it shouldn’t come as a surprise. Last month, National Review’s Patrick Brennan observed an event at which Warren joined French economist Thomas Piketty to talk about inequality.

Brennan notes that the two discussed some of Warren’s plans for college loan and tax reform, and that Warren’s plans are, from a policy standpoint, distinctly unimpressive. They are liberal crowd-pleasers, not informed and judicious attempts to solve problems. Brennan writes:

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.

Conservatives had higher hopes for Warren too, because they believed for a time that she was proof it was still possible for a progressive politician to engage seriously in a policy debate. That ship has sailed.

Of course, it’s all relative. However unserious Warren’s response to Hobby Lobby, it had nothing on Hillary Clinton’s. The former secretary of state was at the Aspen Ideas Festival, where she was asked about the Supreme Court decision. According to the Atlantic, which sponsors the festival, Clinton actually said the following:

“I disagree with the reasoning as well as the conclusion,” Clinton said, almost before Isaacson had his question out. “I find it deeply disturbing.” …

“Part of the reason I was so adamant about including women and girls [in State Department efforts] is that they’re often the canaries in the mine,” Clinton explained. “It is a disturbing trend that you see in a lot of societies that are unstable, anti-democratic, and prone to extremism. Women’s bodies are used as the defining and unifying issue to bring together people—men—to get them to behave in ways that are disadvantageous to women but prop up rulers.”

Now, she said, something similar was happening in the United States, where religion was worming its way into government. “Many more companies will claim religious beliefs. Some will be some sincere, others maybe not. We’re going to see this one insurable service cut out for many women,” she said. “This is a really bad, slippery slope.”

This person is, by all accounts, running for president of the United States. Which makes it easier to understand conservatives pining for a Warren candidacy, I suppose. But conservatives looking for a Democratic candidate willing to have a serious debate on the issues will be waiting quite a while, it appears.

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Thomas Piketty and the Financial Times

The French economist Thomas Piketty has made quite a splash with his new book Capital in the 21st Century, which is now No. 5 on Amazon’s bestseller list. That’s an amazing achievement for a book that positively bristles with charts, graphs, and abstruse economic arguments. I suspect it will be more purchased than actually read.

But the Financial Times has accused Piketty of doing a poor job with his data. I am not in a position to have an opinion on this as it involves complicated statistical analysis that is above my pay grade. But Scott Winship, a senior fellow at the Manhattan Institute, is in such a position and he’s not very impressed with the Financial Times’s analysis:

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The French economist Thomas Piketty has made quite a splash with his new book Capital in the 21st Century, which is now No. 5 on Amazon’s bestseller list. That’s an amazing achievement for a book that positively bristles with charts, graphs, and abstruse economic arguments. I suspect it will be more purchased than actually read.

But the Financial Times has accused Piketty of doing a poor job with his data. I am not in a position to have an opinion on this as it involves complicated statistical analysis that is above my pay grade. But Scott Winship, a senior fellow at the Manhattan Institute, is in such a position and he’s not very impressed with the Financial Times’s analysis:

The Financial Times blew the data issues it identified out of proportion. Giles discovered a couple of clear errors and a number of adjustments that look questionable but have barely any impact on Piketty’s charts. Much of his critique could have been consigned to a footnote to the effect that he uncovered other mistakes and questionable choices that do not actually change Piketty’s results. Giles’s post is written in a way that makes you think the alleged problems with Piketty’s data are more legion than they are. And he’s made some errors himself along the way.

However, the distinguished economist Martin Feldstein, a professor at Harvard and the chairman of the Council of Economic Advisors under Ronald Reagan has other bones to pick with Piketty’s book, principally that Piketty failed to take into account how changes in American tax law affected people’s behavior and thus deeply affected the statistics:

These changes in taxpayer behavior substantially increased the amount of income included on the returns of high-income individuals. This creates the false impression of a sharp rise in the incomes of high-income taxpayers even though there was only a change in the legal form of that income. This transformation occurred gradually over many years as taxpayers changed their behavior and their accounting practices to reflect the new rules. The business income of Subchapter S corporations alone rose from $500 billion in 1986 to $1.8 trillion by 1992. …

Finally, Mr. Piketty’s use of estate-tax data to explore what he sees as the increasing inequality of wealth is problematic. In part, this is because of changes in estate and gift-tax rules, but more fundamentally because bequeathable assets are only a small part of the wealth that most individuals have for their retirement years. That wealth includes the present actuarial value of Social Security and retiree health benefits, and the income that will flow from employer-provided pensions. If this wealth were taken into account, the measured concentration of wealth would be much less than Mr. Piketty’s numbers imply.

And I certainly agree with Prof. Feldstein’s conclusion:

The problem with the distribution of income in this country is not that some people earn high incomes because of skill, training or luck. The problem is the persistence of poverty. To reduce that persistent poverty we need stronger economic growth and a different approach to education and training, not the confiscatory taxes on income and wealth that Mr. Piketty recommends.

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