Warren gets spanked by angry father on student loan proposal

This is quite the exchange (video below). Elizabeth Warren is confronted at a campaign event by a father who is upset with her proposal to bail out student borrowers, noting that she’s punishing people who “did the right thing” by saving money for college or taking on extra work to pay for their kid’s education (like him). He asks if he can have his money back, to which she snidely replies “of course not.” Watch until the end, after the guy has moved on, to see the mocking expression on her face. This is why all the endorsements in the world couldn’t get this woman elected. She acts like he’s comically irrational for pointing out that her policy idea is unfair. Watching how she can’t process anyone disagreeing with her, however, I kind of wish she would succeed as the nominee just so we could watch Trump make her ugly cry on national television during a debate. Unlike a Harvard classroom, not everyone you encounter in the real world is a fawning sycophant.

Fairness is an important question when it comes to policy choices. The lack of generational fairness in student loan jubilee proposals is not the only issue here. In bailing out student loans, the government would be rewarding students who over-borrowed and used student loan proceeds for non-educational purposes. (These would be classified as “living expenses,” and yes, you can borrow money for vague purposes in addition to tuition. The money is distributed directly to schools, who will then cut a check or refund to the student borrower. This is why a lot of young adults rode out the Great Recession and its aftermath on college campuses, and why a bunch of them have moved back home now that they actually have to pay for those days.)

The problem with pseudo-socialist politicians like Warren and Sanders (who is unquestionably dominating the polls in early voting states now) is that they do explicitly reward bad behavior and punish responsible behavior. In economics, we call this moral hazard. When you can pass the cost of your behavior on to a third party, you max out the bad decision-making. It’s the core of why socialist societies eventually fail.

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