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The Republican Case for Elizabeth Warren - The Wall Street Journal

Sen. Elizabeth Warren speaks in Claremont, N.H., Jan. 18. Photo: Scott Eisen/Bloomberg News

A cardinal rule of politics is don’t let your opponents define you. This has been a particular challenge for Sen. Elizabeth Warren, whose critics continue to insist that she is a left-wing radical. I am a Republican and have known and worked with Ms. Warren for many years. She is a capitalist and prairie populist, in the tradition of William Allen White and Teddy Roosevelt. She believes in a market economy. She just wants it to work for everyone.

Like me, she grew up in an economically depressed community in the rural Midwest—she’s from Oklahoma; I’m from Kansas. She attended public schools and was raised with heartland values: hard work, self-reliance and a belief that the government’s job is to help society’s most vulnerable, not the rich and powerful. She moved to the East Coast to compete—and succeed—in government and academic circles dominated by elites skeptical of anyone born west of the Mississippi who doesn’t have an Ivy League degree.

Throughout our working relationship, including the 2008 financial crisis and battles over financial reform, Ms. Warren always took a market-based approach to the issues. She abhorred the generosity of the bank bailouts not because she was a Wall Street-hating socialist, but because she knew that markets can’t work without accountability. She championed the creation of the Consumer Financial Protection Bureau not because she was a bureaucratic regulator, but because she knew that markets need level playing fields, and the field was tilted against working families and in favor of sophisticated banks.

The media has obsessed over Ms. Warren’s plans to nationalize health care, but the press has ignored elements of her platform that are focused on market-generated growth. She wants to break up the big banks by restoring the separation of commercial and investment banking. This would encourage competition and end the implied taxpayer subsidies that too-big-to-fail institutions enjoy. She wants to tackle monopolistic practices of Big Tech, preventing companies from abusing their platforms to pilfer the ideas of entrepreneurs and wrongly appropriating personal data for their own profit.

Ms. Warren wants to even the tax treatment of workers and rich investors by eliminating preferences for capital gains and dividends. She would impose a small tax on enormous accumulations of wealth enabled by those preferences. A 2% tax on fortunes above $50 million and 6% on those above $1 billion won’t break a Bill Gates or Jeff Bezos, who can surely generate returns far in excess of those modest assessments. And by making it more expensive to stockpile wealth, the tax would give the rich an incentive to spend their money, which helps the economy.

Ms. Warren also supports deregulation that promotes competition and lowers costs for consumers. A prime example: She co-sponsored a law with Sen. Chuck Grassley (R., Iowa) that will soon allow hearing aids to be sold over the counter, which will reduce average costs for consumers. She also favors rolling back state and local zoning laws that restrict upward mobility and drive up housing costs.

These are examples of proposals that don’t replace markets with government dictates but align incentives for broadly shared economic gains. And all poll well with the public, including among Republicans.

While Ms. Warren’s ambitious plans for an expanded government role in health care and higher education will be met with skepticism by Republicans, many will support her goal of making such basic services broadly accessible, while eliminating the profiteering that has made them so expensive. Her challenge will be to convince swing voters that she can achieve better outcomes at a lower cost. That would require her administration to stand up to the lobbying interests that have defeated past efforts at reform.

But this underscores Ms. Warren’s greatest strengths: her integrity, independence and commitment to helping working families. She understands their challenges because that is how she grew up. Most voters understand that fundamental change requires a president with both the know-how and moral fortitude to recapture government for the public.

There are many fine Democratic candidates, but Ms. Warren would have strong crossover appeal. Indeed, she is more market-oriented than the incumbent president, whose economic policies rely on near-trillion-dollar budget deficits, aggressive monetary policy, more tax loopholes, and government-managed trade. Ms. Warren promises structural reforms to strengthen the long-overlooked middle class. President Trump promised that in 2016. Ms. Warren might deliver.

Ms. Bair was chairman of the Federal Deposit Insurance Corp., 2006-11.

Watch Bernie Sanders and Elizabeth Warren clash over her claim that he said a woman could not be elected President, CNN moderator Abby Phillip's rejection of his denial, and the candidates leaving the stage. Image: Shannon Stapleton/Reuters

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The Republican Case for Elizabeth Warren - The Wall Street Journal
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