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One more reason to expect that, should she be appointed head of the CFPB, Elizabeth Warren would be less a disinterested regulator than she would be a nakedly partisan hack: she obfuscates the data in studies she conducts, in order to arrive at a pre-determined, politically correct conclusion. That’s what happened last year, at any rate, when, in the midst of the healthcare debate, Warren and colleagues miraculously produced a paper that found that soaring medical expenses accounted for fully 70% of bankruptcy filings, up from 50% in 2001. The Atlantic’s Megan McArdle ain’t buying it:
What Warren et. al. neglect to mention is that bankruptcies fell between 2001 and 2007 [because of the more creditor-friendly bankruptcy law passed in 2005]. In fact, they were cut in half. Going by the numbers Warren et. al. provide, medical bankruptcies actually fell by almost 220,000 between 2001 and 2007, a fact that they not only fail to mention, but deliberately obscure.
Are Warren, et. al. unaware that bankruptcies fell by half? No bankruptcy analyst could possibly be unaware of this fact; it has been the most talked-about phenomenon in the bankruptcy area since the 2005 law was passed.
So medical bankruptcies weren’t zooming, as Warren and her co-authors wanted people to believe in order to convince them to support health are reform. The opposite was happening. The absolute number of medical bankruptcies was falling.
If Liz Warren wants to play dilettante health researcher and put out bogus studies to support her partisan viewpoints, that’s fine. (Actually, it’s not fine. But somehow her paper got peer-reviewed and published, anyway.) But hijinx like that aren’t evidence of the kind of temperament one expects to see in an effective regulator. Should Elizabeth Warren be appointed head of the CFPB, she can be counted on to stick it to the banking industry regardless of the merits of the issue at hand, and bend over backwards for the consumer lobby. In the end, that won’t be good for the banks, or consumers, or the economy as a whole. . . .
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