Sen Warren remains consistently wrong about the economy
Washington Free Beacon:
Economic experts are casting doubt on Sen. Elizabeth Warren's (D., Mass.) dire warning that a crash on the level of the 2008 financial crisis is on the horizon.Manufacturers are doing significantly better under Trump because of reduced regulation while Warren would like to reimpose control freak regulation. She also appears to be nearly an economic illiterate with her predictions.
The 2020 Democratic hopeful penned a Medium post Monday arguing that rising household and corporate debt, as well as a "manufacturing recession," made the economy vulnerable to shocks that could bring about catastrophe. She called for stricter oversight of corporate lending, in addition to re-upping her policy proposals to lower household debt, which include a minimum wage hike and canceling most student debt. She has called for a $2 trillion investment in green research and manufacturing.
CNBC.com financial editor Jeff Cox wrote Warren's missive "carried with it some level of hyperbole." Cox said her argument about consumer debt "neglects to measure it against the growth in the economy and the ability to pay," and she produced "scant evidence" of a manufacturing recession.
Household net worth stands at $108.6 trillion and household debt is at 14.4 percent of that figure at $15.7 trillion. That's a marked improvement on a decade ago in June 2009, Cox argues, when household net worth was $50.4 trillion and household debt totaled $13.8 trillion, equal to 27.4 percent of total net worth.
CNN business reporter Cristina Alesci also said Monday that Warren's invocation of corporate debt as a risk factor didn't hold up.
"While risky loans to corporations have increased post-financial crisis, the ability for those companies to keep up with payments has also increased, so we're not seeing the kind of default rates that would be alarming at this point," she said. "Now I'm not saying that's not a metric we should be paying attention to. All I'm saying is that Elizabeth Warren is shaping this conversation in a way that's politically convenient for her."
Alesci added that Warren's laundry list of proposed government programs could itself create a financial crisis, through the hiking of debt, taxes or both.