All Things in Moderation

Maybe I’m wrong, it sure wouldn’t be the first time, but I think the middle class has finally woken up to the fact that the deck is stacked against them. I hope we’ve realized we don’t need a savior, we’re on our own, that much is clear. But people are finally expressing their anger and frustration outside of the voting booth so maybe someone will get the hint. I’m a little cynical, they just passed another free trade deal that most Americans didn’t want, so who knows what’s really going on. A Liz Warren in the Senate may be able to level the playing field a little, that’s the hope anyway.

People are frustrated with Washington, Republicans and Democrats alike. Congressional approval hovers below 15% and Obama’s not faring all that well in the polls himself. Whether, as some claim, we believe the so-called liberal media blitz blaming “Wall Street” for our woes or you believe the conservative claim that “government” was largely to blame, it’s tough to deny that we’re having trouble climbing out of this recession. While the economy would undoubtedly have been worse without TARP, “Main Street” isn’t in recovery yet. The Tea Party and the OWS protesters aren’t characters in a children’s book, an Ayn Rand novel or science fiction, they’re real people with real concerns for their future. It’s pretty obvious conservatives are worried about Liz Warren. Scott Brown’s campaign coffers have grown substantially since she announced her Senate run.

She had gained millions of supporters. With her passionate defense of America’s beleaguered middle class, under assault today from seemingly every direction, she had become like a modern-day Mr. Smith, giving voice to regular citizens astonished at the failure of Washington to protect Main Street—and what increasingly appeared to be its abandonment of middle-class America.

If you read this piece in Vanity Fair you’ll discover why she appeals to many of us, and also why she might just be a little different from the usual beltway corporate sponsored politician. I know, I know, corporations are people too, but oddly enough, so are people.

Arrayed against Warren, and today against the very existence of the C.F.P.B., was the full force of what many, most notably Simon Johnson, the M.I.T. professor and former International Monetary Fund chief economist, have called the American financial oligarchy: Wall Street firms and banks supported mainly by Republican members of Congress, but also politicians on the other side of the aisle, along with members of Obama’s own inner circle.

She has enemies in the White House and particularly at Treasury. There’s no love lost between Warren and Geithner, especially after her questions during heated oversight hearings. Chris Dodd wasn’t particularly thrilled having her in charge of setting up the CFPB, he wasn’t all that enthusiastic about bringing transparency or consumer protections to the banking industry in the first place. Does anyone miss Chris Dodd?

Reid asked Warren to head the congressional panel overseeing the $700 billion bailout. The job was vague, with no clear goals, but Warren would turn it into a tough, prosecutorial committee. She did real investigations, grilled government officials, and issued blunt monthly reports demanding more accountability from banks and better returns for the taxpayer. She held public hearings that were televised, asking the questions that many taxpayers wanted asked—and questions that bankers and Treasury officials did not want to answer. Perhaps the most widely watched hearing is the one that took place in September 2009. A video of part of that hearing can still be found on YouTube, under the title “Elizabeth Warren Makes Timmy Geithner Squirm.” It opens with Warren asking the question that was on the minds of many taxpayers: “A.I.G. has received about $70 billion in TARP money, about $100 billion in loans from the Fed. Do you know where the money went?” What followed during the rest of the hearing was the spectacle of the Treasury secretary tripping over his words, his eyes darting around the room as Warren, calm and prosecutorial, kept hammering him with questions.

She wasn’t always a Democrat. Her first big foray into bankruptcy, via a study she conducted to uncover fraud, had a much different result than she expected.

In 1978, Congress had passed a law that made it easier for companies and individuals to declare bankruptcy. Warren decided to investigate the reasons why Americans were ending up in bankruptcy court. “I set out to prove they were all a bunch of cheaters,” she said in a 2007 interview. “I was going to expose these people who were taking advantage of the rest of us.” What she found, after conducting with two colleagues one of the most rigorous bankruptcy studies ever, shook her deeply. The vast majority of those in bankruptcy courts, she discovered, were from hardworking middle-class families, people who lost jobs or had “family breakups” or illnesses that wiped out their savings. “It changed my vision,” she said.

And of course the vigor with which the banking sector and Republicans continue to vilify, demean, and label her will only increase the support and campaign donations she receives in response.

In those speeches, sometimes using slides filled with numbers and graphs, she would, as she did at a speech in Manhattan in early June, outline the impact on middle-class Americans of rising health-care costs, burgeoning debt, and the depletion of not only their savings but also, with the rise in joblessness, their confidence. She spoke of “the Wild West” conditions deregulation had created, where banks could sell virtually any product they wanted, on any terms: mortgages they knew consumers could not pay off, credit cards whose rates they could raise at whim, products that came with a mind-boggling array of penalty fees, many of them not fully disclosed. But it was her final remarks that brought down the standing-room-only house in June. “We cannot run our country without a strong middle class. We cannot run a democracy without a strong middle class,” she said, her voice quavering slightly. “If we hollow out the middle class,” she said, “then the country we know is gone.”

But while audiences applauded her, Warren’s opponents lacerated her. She was called incompetent, power-hungry, ignorant, a media whore, and, in a widely televised moment, a liar, by a Republican congressman during a hearing in May. “It was like she was the Antichrist,” says Roger Beverage, the president of the Oklahoma Bankers Association and one of the few bankers who publicly supported her. She had become the lightning rod for the opposition to the C.F.P.B.

Her critics characterize her as an elitist or a shark in school marms clothing, but while she speaks the language of the middle class, she also knows the secret handshakes and tricks of the trade of the financial elite. It’s no wonder they’ve spent so much money trying to keep her away from the levers of power.

That bluntness was evident in an interview even in late May, when Warren, who learned only in July that she wouldn’t get the job, still believed that Obama might ask her to run the C.F.P.B. “It’s money and power, the only two things we are talking about here,” she said, speaking of the people who were trying to kill the C.F.P.B. “in the back alleys,” as she put it. “There are many who are rich and powerful who say the system works fine as it is,” she continued. “America had been a boom-and-bust economy going into the Great Depression—just over and over and over, fortunes were wiped out, ordinary families were crushed under it. Coming out of the Great Depression we said, We can build a structure that makes us all safer. And notice, it’s from the end of the Great Depression to the 1980s that we built America’s middle class. That’s when we got stronger as a country. That’s when that big, solid, boring, hardworking, play-by-the-rules group in the middle emerged and defined what America was. You still had the ability to become a billionaire, but the center stayed strong and, notice, provided opportunity for growth, opportunity for getting ahead, opportunity that your kids were going to do better than you did. That was what defined America. And then we started, inch by inch, pulling the threads out of that regulatory fabric, starting in the 1980s.”

We’ll see how tough she is, she’ll need it, but I believe she’s got what it takes to both win and make a difference. There will be a lot of eyes on the Senate race in Massachusetts.

Filed under: Liz Warren, OWS, Tea Party | Tagged: MA Senate | 122 Comments »