Elizabeth Warren and consumer rights – FAIL!

Elizabeth Warren claims to be an advocate for consumer rights.  The mere mention of the phrase ‘consumer rights’ brings to me visions of Ralph Nader and his one-man full-frontal assault on the automobile industry.  Ralph Nader, also an elitist Harvard snob wrote articles titled: “The safe car you can’t buy” and then later books attacking the auto industry such as “Unsafe at any speed”.  Ralph Nader never met a US car company he didn’t hate – or file suit against!

Elizabeth Warren is cut from that same radical left cloth.  She finds fault in almost every interaction with private enterprise, and somehow she feels it is her job to build a government bureaucracy to fix it.  

Ralph Nader has never worked for any car company that I know of, and his radical left-wing nanny Elizabeth Warren has never worked for any big bank that she wants to throw rocks at.  They are the type that stand outside and point fingers at the efforts of young entrepreneurs and business leaders and yell ‘shame’, ‘shame on you’.

That aside they both claim to fight for ‘consumer rights’.  What exactly consumer rights are needs to be defined.  In the 1950’s and 1960’s the federal government began a movement to search out and make right companies they thought were unfair to consumers.  The efforts culminated in The Consumer Bill of Rights in 1962, which established standards that products and companies must meet.  They include the right to safety, information, choice and to be heard.  The ‘rights’ have since been expanded to include the right to redress.

These aren’t really rights in the truest sense of the word because nobody has the ‘right’ to demand a company satisfy their needs.  I have no right to demand McDonalds make a hamburger for me that is healthy, tastes great and is reasonably priced.  I can either take what they offer or walk away.  That is known as ‘caveat emptor’ or buyer beware.  In other words, it is incumbent upon the purchaser of a product or service to make a reasonable inspection before making the transaction.  A purchase is a shared responsibility and agreement between two parties.  Each being honest and up front.

The idea of ‘caveat emptor’ is unknown to Elizabeth Warren.  Warren feels it is the federal government’s responsibility to monitor the transactions of everyone so that nobody ends up being burdened with a bad purchase.  Her creation of the Consumer Financial Protection Bureau’ was to impress upon people the evil money-hungry horrors of the financial world.  If not, then why do they need to be protected?  

If you go to the CFPB webpage you can see this:

The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans – whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.

Strange isn’t it, that a bureau of the federal government has been created to make sure the consumer has ALL the power in the private transaction in the marketplace.  Remember, the market place is for both purchaser and provider!  This federal bureau does not at all respect or represent the provider!  In Elizabeth Warren’s eyes – the purchaser has ALL the power.  

Why is this bad?  Easy, it prevents the buyer from truly having the freedom to purchase as they sought in the original Consumer Bill of Rights.  Companies at a competitive disadvantage will generally not offer anything more than what is dictated by the federal government.  Haven’t you heard companies making claims that their product meets all government safety standards, or meets all the recommended daily allowances of this or that?  Sure, there will be some companies that break away from the pack and market themselves or their products as elite or premier, but then they charge a much higher price, which in essence, creates a marginalized marketplace.  It creates a marketplace where you have only two choices: either you can buy the product that fulfills the lowest common denominator of the federal government, or you can buy the better item.  (Gee, sounds like healthcare!)  In either case, the cost of meeting the federal government standards, and having the goods inspected to be sure, will ALWAYS result in higher prices for all.  And, it will also result in lesser variety in the marketplace.  

Had Ralph Nader and Elizabeth Warren just left the free market to determine what products, including what features are wanted in the marketplace things would be a lot better.  Banks that give out bad loans would be quickly discovered using ‘caveat emptor’ and they would be run out of town.  People would read the 15 pages of legal documentation included in a mortgage application, instead of assuming that a federal regulator would be watching over everyone’s shoulder.  The consumer would voluntarily educate themselves!  The consumer would never assume they are getting the best deal!  They would be better shoppers and more prudent spenders of the resources they have!

The concept of ‘caveat emptor’ is amazing and powerful.  It both protects the purchaser and the provider in the transaction.  It maximizes the product offerings in the marketplace making it easier for shoppers to find what truly fits their unique need.  That is what consumer rights are all about!

Luckily we have ‘caveat emptor’ in the world of politics.  The voter/consumer gets to make informed decisions about the candidates.  We get to review the wide assortment in the marketplace – even if Elizabeth Warren refuses to acknowledge her competition in Marisa DeFranco and James Coyne King.  If Elizabeth Warren’s idea that the federal government has to be involved in all transactions were true – then they would want to tell us who to vote for.  

Elizabeth Warren’s dogged efforts to limit the equality of the provider in financial transactions weakens the marketplace.  It unduly restricts banking institutions from offering anything but what some federal ‘know nothing’ bureaucrat imagines as fair and in the best interest of the shopper.  

I am hoping that Elizabeth Warren will be as well received in the world of politics as her mentor Ralph Nader.  The free market has told Nader to stay out of politics many times.  Now its time for the free market to send Elizabeth Warren the same message.

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