At least two of my followees posted this on their FB feeds:
Posting something like this, without any caveats or qualifications, to me, is a symptom of Acute Economic Unawareness (AEU). This is kind of sad for me, because I really liked Elizabeth Warren a few years ago when, as the Chair of the Congressional Oversight Panel on TARP, she reservedly and intelligently criticized the Wall Street bailouts. Since achieving cult hero status for her agitated exaltation of the ‘social contract’, she has won a seat as a U.S. senator from Massachusetts. She now comes across to me like just another bread-and-circuses Democrat who views laws of economics as mere guidelines.
Her latest campaign is to give free money away to students. Mother Jones recently reported on her reasoning:
“If we can invest in big banks by giving them low interest rates on government loans,” Warren said in the statement, “we certainly can do the same to help students get an education.”
Mrs. Warren used the same “if… then” type of statement in her introduction speech for this bill. Unfortunately, she and her other colleagues in government can’t invest in big banks by giving them low interest rates on government loans. The later part of her reasoning, therefore, does not necessarily follow.
Giving banks low interest rates on loans is a significant part of problems with our economy as of late. As Tom Woods cogently explained, pervasive government interference with the price of borrowing money fuels the malinvestments that lead to troublesome booms and busts:
The government should stop doing this sort of thing, not do it even more.