Warren's Crank Scheme

Warren's Crank Scheme
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warrenShortly before the Christmas holiday, beloved liberal stalwart Senator Elizabeth Warren introduced a bill in Congress to ban companies from performing credit checks on prospective employees. In a press release accompanying the bill, Warren reasoned that poor credit history isn’t a reflection of bad decision-making but rather “the result of unexpected medical costs, unemployment, economic downturns, or other bad breaks.” Therefore, she reasoned, government should step in to remedy this injustice in discrimination.

To the novice observer, this kind of policy appears fine and dandy. If passed, Warren’s bill will erect a veritable wall of disguise over a job applicant’s past behavior. It means less diligence will be needed for anyone grooming the classifieds. No credit history equals free reign to party hardy without repercussions, at least job-prospect wise. The average working Joe could run up personal debt, default on five credit cards, and the hiring manager at a financial firm would be none the wiser when considering his employment.

Economics is the science of disproving free lunches. So taken from an economic view, Warren’s efforts are not so cute and cuddly. Progressives mistakenly believe government fiat is a shortcut to prosperity. But when the state gives away a benefit, it instills both dependency and immaturity in the citizenry. There will be a cost to banning credit checks by employers. And it’s one that Elizabeth Warren and her supporters have likely never thought about.

If prevented from running a background check on credit history, employers will have to use different means to judge the viability of a potential worker’s performance. Already, drug tests and checks on criminal history are utilized. Businessmen look into credit history because they view it as a valuable gauge of personal discipline. There is a reason for it, less it wouldn’t be done. The intention, despite Warren’s hunch, is not malicious. It’s highly doubtful that corporate management conspires to stick it to the poor every chance they can. They are just watching out for their bottom line.

Warren does have a sympathetic point with her agenda: accidents do happen that are out of our control. The family that has their home destroyed in a natural disaster wasn’t irresponsible (unless they were living somewhere prone to danger without insurance). The driver whose car is totaled thanks to the negligence of another wasn’t a hedonistic consumer. The blue collar father of two who is injured on the job wasn’t necessarily hitting the sauce every night. There is always a chance for these unfortunate circumstances, and none are cheap to recover from.

But just because bad things happen to good people doesn’t make it okay to infringe upon the rights of employers. Anyone who is using their own property to vet candidates for hire is entitled to use whatever criteria they wish. If the would-be employee disapproves, they can seek employment elsewhere. The free market does a better job of determining fair standards than any politician.

It’s hard to blame someone like Elizabeth Warren for her ignorance of free enterprise. The Senator from Massachusetts is a strange political creature. She has succeeded in capturing the adoration of grassroots progressives, much like Howard Dean did in his 2004 presidential run. Bumper stickers donned with the phrase “I’m from the Elizabeth Warren wing of the Democratic Party” are a real thing. She has gained a cult-like following with sharp rhetoric complemented with some old fashioned bank-bashing. There is a strong populist streak to her lecturing – which is to say that she spends most of her breath castigating the wealthy. Ms. Warren rocketed to the top of the liberal love boat when she famously declared, “there is nobody in this country who got rich on his own. Nobody.” The phrase was meant as a derision of rugged individualism. It was the biggest of straw man arguments, but that didn’t stop her base of supporters from swooning as if they just witnessed the second-coming of William Jennings Bryant.

Warren’s new bill will earn loads of support from her cultish followers. You see, to the progressive it’s the government’s job to eliminate the concept of responsibility. By state authority, the world is supposed to be made into a wanton playground for everyone to enjoy with little effort involved. The left wants liberation from the toiling that’s needed to build homes, grow food, make clothing, and develop technology. They want all the goodies of modern civilization without any of the strenuous discipline. Who will provide the sustenance to live in this fantasy world? Why, the state of course!

The progressive “no work needed” ideology was best identified in the much-mocked “pajama boy” advertisement put out by the Obama administration. Clad in a plaid onesie while gripping a mug of hot cocoa, this exemplary of millennialism represents the carefree attitude liberalism wants to instill in the populace. He is dorky, ironic, smug, informed, and unabashedly liberal on all issues. He is also ill-equipped to find employment at anywhere other than a non-profit that supports causes of social justice. As National Review editor Rich Lowry describes him,

“it’s hard not to see Pajama Boy as an expression of the Obama vision, just like his forbear Julia, the Internet cartoon from the 2012 campaign. Pajama Boy is Julia’s little brother. She progressed through life without any significant family or community connections. He is the picture of perpetual adolescence. Neither is a symbol of self-reliant, responsible adulthood.”

Lowry is correct in every word, except for the quip of the “Obama vision.” Barack Obama, for all his faults, is no visionary. He is simply following the progressive playbook, which is equal parts envious Marxism and corporatism.

Elizabeth Warren follows the same path. She wants to make life as easy as possible for folks such a pajama boy. To accomplish this, she uses state law to overthrow normal social conventions. The latest frolic in this crusade is the prohibition on employer credit checks. If nobody can be “judged,” then nobody can be deprived of an equal shot to display his or her talent. That’s not how life works however. People judge all the time. If on-the-clock job performance is dismal, then that employee is quickly gotten rid of. Of course, it’s likely that Warren takes a cue from the French and sees this dumping of waste as unjust. But there is no overcoming the truth that jobs don’t grow on trees – they must be earned with productivity. The progressive does not accept this, and is infatuated with developing new schemes to bypass the profit motive.

Warren’s efforts, as good-intentioned as they may be, will only backfire in the end. Barring employers from checking on credit history will just force businesses to adopt new criteria. If no other standard can be used, then candidates will simply not be considered. Unless Elizabeth Warren wants to march into every human resources department in the country and physically force business owners to hire, the unintended consequences will be more job-seekers deprived of employment. Guys like pajama-boy will continue to live in his parent’s basement. The result is precisely the opposite of original intent. That’s the price paid for attempting to engineer society into a place where risk and responsibility are no longer relevant. People get hurt. And the Elizabeth Warrens out there are to blame.

  • Chris Horlacher

    Aside from being a litmus test for self-discipline, people who are credit risks are typically also fraud risks for businesses. Nearly every financial fraud I've encountered was committed by someone who was deeply in debt.

    If this is eliminated an important preventative measure of white-collar crime will be gone. This will likely increase insurance premiums for businesses and translate in to higher costs for consumers.

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James E. Miller is editor-in-chief of Mises Canada and a regular contributor to the Mitrailleuse . Send him mail

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