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Bernie and Elizabeth

October 5, 2018 (1,829 words)

There are probably not too many practicing Catholics walking around today who both revere the practical wisdom contained in the Magisterium, and value the practical advice on economic policy offered by Senator Bernie Sanders of Vermont and Senator Elizabeth Warren of Massachusetts.

In fact, I may be the president, treasurer, chief cook and bottle washer of that particular club at the moment.

Mr. Sanders has been faithfully making the case for economic justice and equitable distribution since he entered public life in the early 1990s. Ms. Warren on the other hand is a relative newcomer to public service, having left academia after making her bones as a prominent scholar specializing in bankruptcy law.

In the wake of the financial collapse of 2008 she served as chair of the Congressional Oversight Panel which was created to supervise the Troubled Asset Relief Program (TARP). She later served as Special Advisor to the Secretary of the Treasury for the Consumer Financial Protection Bureau. Then she decided to run for the Senate in the 2012 election cycle.

While the economic proscriptions of these two New England politicians are similar and often considered in the same breath, they are not identical. This may be common knowledge to those more informed than myself, but I have only recently been schooled on this subject by the journalist Josh Barro, who currently contributes to Business Insider as a political commentator.

… the right antidote to both socialism and Trumpism

His July 28 entry, “Capitalist Elizabeth Warren has the right antidote to socialism and Trumpism,” is the source of my continuing education. Mr. Barro begins his piece as follows:

“Sen. Elizabeth Warren’s recent remark that she is a ‘capitalist to my bones’ is being treated as some kind of news, even though it is consistent with the policies and rhetoric the liberal Massachusetts senator has espoused for her entire career.

“Warren’s major policy project is to make markets work right for regular people. If you want to make markets work well, then obviously you are in favor of markets and capitalism…. Warren’s choice to own her capitalism is good news for the Democratic Party, and for capitalism.

“…Over the last 15 years, as markets have repeatedly failed, the market-first approach has become a political liability for Republicans and is increasingly discredited within the Democratic Party. As a result there is now fashion for people on the left to call themselves ‘socialists’ – often while implicitly or explicitly supporting many of the markets-with-guardrails policies Warren herself favors.”

While conservative Republicans may be put off by young (b. 1984) Mr. Barro’s current affiliation with the Democratic party, or by the fact that he identifies as gay and considers himself an atheist, my advice to that crowd would be to shelve your knee-jerk aversion and concentrate on the economic proscriptions under consideration.

(Editor’s Note: In my vocabulary “shelve” is not the same as “ignore.” Personally, I am hoping we can manage to somehow navigate the wide terrain that exists between “acquiesce” and “condemn.” Why bog down in passing judgement, when it’s not our place to do so, and when these errant self-identifications are not permanent or irreversible. Since there is every reason to believe A Road to Damascus moment awaits us all, it would make more sense to simply pray for Josh Barro’s impending epiphany.)

Barro, who is the son of Harvard’s macroeconomist Robert Barro, and who himself earned a bachelor’s degree in psychology from Harvard, offers a valuable perspective for anyone with a serious interest in improving economic justice and equitable distribution.

…a rough 15 years for capitalism’s reputation

As an example of his unique perspective, Mr. Barro is able to admit that “capitalism’s brand has had a rough 15 years,” while in the very next breath acknowledging “America is going to be capitalist, so we had better make capitalism work.”

Without wanting to get too deep into the policy weeds, or quote the entire piece verbatim, allow me to offer a few highlights that I hope will properly frame the context. As Josh Barro tells us,

“There are two, broad theoretical approaches that can lead you to the same left-leaning policy platform. You can start from free markets and layer on government interventions as necessary to make those markets stable, functional and fair. Or you can start from central planning and introduce market features where the government cannot efficiently allocate capital from on high.

“You can even design the same policy platform from either of these approaches, calling it ‘capitalist’ in one case and ‘socialist’ in the other. This is how Warren and Sen. Bernie Sanders are not that far apart on policy, despite their very different rhetoric about capitalism.

… the direction you approach the policy from matters

“But which direction you approach the policy from matters. And if your system will continue to rely on private capital, as virtually every modern political platform claiming to be ‘socialism’ does, it’s to your advantage to place markets front and center, as Warren does, because you’ll have to explain how you’ll make those markets work well.

“Instead, Sanders’s broad rhetoric about a ‘rigged system’ counsels despair. His focus on wealth inequality is akin to Donald Trump’s obsession with trade deficits – it elevates an economic indicator the government cannot directly control, leading to sure disappointment when four years of policy fail to materially change its level.

“Warren’s markets-up approach has a big advantage in the American political context. For one, it starts from where we are today: A market economy with insufficient and ill-designed regulation in many sectors, with less economic redistribution than is desirable, that is not working as well for ordinary people as it should.

“And a bottom-up approach lends itself better to developing concrete, incremental, affordable policies that you can actually implement to make markets better, in everything from labor to health care to higher education to financial products.”

I don’t know about you, but reading such economic analysis from Josh Barro gives me goose bumps. Let’s hope his influence increases as his career advances.

But I see no need to elevate one politician over the other. That is to say, Bernie Sanders’s broad rhetoric about a “rigged system” has always struck me as right on target, and never once has led me to despair.

Similarly, if someone as brilliant as Josh Barro can one day acquaint himself with the guidelines for achieving economic justice and equitable distribution offered in an impressive line of papal encyclicals, starting in 1891 and continuing right through to the present moment, we might actually get somewhere on this subject.

Robert J. Cavanaugh, Jr.
October 14, 2018

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