Former Consumer Financial Protection Bureau adviser Elizabeth Warren prompted a plethora of diatribes when she sounded off against big business.
The architect of CFPB -- who was once in the running to be America's top mortgage cop -- suggested in an impromptu speech available on the Web that corporations are using America's infrastructure and labor, while not paying enough in taxes.
Rich Lowry of the Boston Herald published complete coverage of the latest Warren controversy, proving once again the professor's lightning-rod persona.
In response to her class warfare cry, critics blasted the CFPB architect for picking on job creators at a time when Americans are desperate for jobs. Warren also is taking hits for suggesting the current economic malaise is not the result of bad policymaking among career politicians – many of whom have never run a business themselves.
In short, her plan to beat the politicians is to become one. That's not a good idea considering the reputation of politicians. All the while, Warren fails to mention the key factors stalling the economic recovery: jobs and the housing market.
When Jay Brinkmann, chief economist of the Mortgage Bankers Association, said jobs would be a catalyst for a true housing recovery earlier in the year, he wasn't kidding. He also warned regulators about excessive rules hurting the economy, but I suppose no one in Washington heard him.
Fed Chair Ben Bernanke also wasn't kidding when he highlighted the importance of stabilizing housing in many of his speeches. Yet, you seldom hear politicians discuss housing for longer than two seconds. Why is this exactly? Rather than admit new laws are thwarting growth, it's easier to rail on taxes. Taxes are controversial and everyone knows what a tax is.
Terms such as loan-to-value, adjustable-rate mortgage, conforming loan limits and debt-to-income ratio lose people, so when you become a politician, stick to taxes.
It seems Warren's main initiative for a long time was ensuring the CFPB and Dodd-Frank took effect to regulate mortgages, but fast-forward a few months and she's now another politico with a tax beef.
To be fair, those who take the bait and jump in the fray are really no better for limiting public discourse to this back-and-forth nonsense.
Instead of focusing solely on jobs, so jobs can create housing, the railing elites continue to focus on tax policy while ignoring the larger elephants in the room. Warren is just the latest lightning rod to give cult-like followers a savior to follow, while the economy races to the bottom.
Meanwhile, the real cause-and-effect paradigm of the economic crisis is continually obscured by talking heads. Warren says corporations should be taxed because they use workers the rest of us educate, but that's not exactly true.
Earlier this year, HousingWire published the insights of John Burns Real Estate Consulting. The firm studied demographic trends and found many younger Americans are delaying or avoiding new home purchases. In fact, they are more inlined to be long-time renters. This age group used to have a great time when home prices plummeted, giving them affordable home buying options, but today they are nowhere to be seen.
It's not tax policy stalling them, it's jobs and excessive education debt.
"Part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along," Warren states in the video. It's a great idea and it should start with her.
Instead, you don't hear Harvard Law professors railing against the student loan bubble, and the high professor salaries that are cushioning it. The Harvard Law Website shows tuition for a degree at Warren's school to be $47,600 per year. Multiple that times four years and those students could've bought a home instead. Granted, it's possible they fare well in the job market, but nothing is certain in today's climate.
If high-profile profs cut their salaries, would those tuition figures go down nationally, allowing students more flexibility to buy homes, thereby stimulating the economy? Or is it only popular to pick on CEO salaries in down times? So when Warren says we are educating the workers that CEOs get for free, she is pointing out how much she misses the modern paradigm. Students are actually paying more to educate themselves, allowing schools to pay professors more and build their own infrastructures. When those students end up in debt, they don't buy houses.
It seems Warren's foray in politics has made her ... well, a politician. When you dig far enough, politicians can't help contradicting themselves whether they mean to or not.
But through all of this, it is important to remind Warren about what voters will ultimately be after. This is something that remains constant through rich times, recovery or recession. To quote the Lil' Wayne song "She Will:" And today I went shopping and talk is still cheap.
Write to Kerri Panchuk.