Interesting article. I was familiar with much of the discussion about her academic work. I think it’s a non-issue. Unfortunately, she doesn’t put her conference slides on her faculty webpage. Those would be more telling. In her papers (some of which are available at the previous link), the definitions she uses are spelled out. And while I agree that having $1000 in medical bills hardly seems like a “conservative definition” of medical bankruptcy (the Atlantic article provides a particularly funny example of someone with massive debts and over $1000 in medical bills that would qualify under Warren’s definition), it was not obfuscated. Believe it or not, this is good even compared to other academics.

But let me be clear: I will not agree with her politically. This was also true of William Black. But that’s not what will make her and did make him competent regulators. I have no doubt that if Warren says she is restricting credit card companies, that is what she is doing. The corollary is equally true. If she makes a rule restricting mortgages, she’s not going to come out and say the opposite.

Compare this to the fact that we’ve committed an equivalent to TARP in new bailouts in the last year, despite a significant amount of talk about no more bailouts. $700 billion more to Wall St.? Are we supposed to assume this is still to help Main St.? If you include commitments from the Fed, several trillion dollars have gone to bail out Wall St., but most regulators cite numbers far smaller. In fact, you want to know who helps report the correct figure? Elizabeth Warren (in that last example, the reporting was due to Neil Barofsky, but Warren has certainly done her part in the past).

Compare this to the fact that the head of the Treasury is a tax cheat, was asleep at the head of the New York Fed when Wall St. was engaged in obvious fraud, and was largely responsible for one of the greatest foreign currency crises in recent history. If he says he’s doing something to help the banks, I think, “This will help the banks.” If he says he’s doing something to restrict the banks, I think “This will give more power to the banks.” He’s entirely predictable in his objectives, but not what I would call competent.

Compare this to Greenspan, who claimed to support the free market while exercising unilateral, central control over one of the most important aspects of the economy. He had to actively intervene in the free market to keep rates lower than what the market was setting. Those low rates helped fuel a housing bubble, exactly as his own research years before predicted. The man researched creating housing bubbles via the manipulation of interest rates! Then he blew a housing bubble by manipulating interest rates while talking about a free market that he himself squashed.

Compare this to our accounting laws, tax laws, etc.

Compare this to the Federal Department of Education (not states, which, save Texas, seem to benefit education).

Heck, compare this to the Justice Department.

We have a severe lack of competent regulators.

Incidentally, I don’t actually expect to disagree with all of her actions. She has an honest interest in exposing and eradicating fraud, the absolute best motivations for a regulator. She strikes me as quite intelligent and uncompromising.

I also have reservations for the CFPA after Warren’s tenure ends. What happens when she’s gone? In all likelihood, we’ll get another incompetent regulator sitting on top of an agency that makes people feel safer while undermining those very goals. I think FinReg will be a massive, expensive disaster. But I believe in benign despotism for as long as the benign despot remains. I think that the CFPA will be a net benefit under Professor Warren even when I disagree with her actions. But let me relax that endorsement a little to put things in perspective: As long as she’s in charge, I’ll be significantly more worried about the IRS, the Department of Homeland Security, the FAA, the FCC, the FDA, etc. Overall, the quality of government will be improved, however slightly, by the addition of Warren as a regulator.