SOMEHOW THE COUNSEL OF THOMAS JEFFERSON doesn’t seem too dated anymore: “The end of democracy and the defeat of the American revolution will occur when government falls into the hands of lending institutions and moneyed interest.” It’s an insight Elizabeth Warren would readily adhere to over two centuries later. And who can blame her, given the troubling rise of Wall Street again.
The crippling economic crisis of only a few years ago, largely precipitated by Wall Street’s incompetence, was supposedly a wake up call to all of us. Those initial attempts at regulation to keep it from happening again have been the object of numerous complaints from financial executives who claim that such constraints only serve to keep the economy from effectively recovering.
For financial institutions, however, the times couldn’t be better. The federal government forwarded Wall Street hundreds of billions of dollars of new capital, and trillions of dollars of credit were made available to keep capital flowing. At the height of this spree, the Fed was buying $85 billion in bonds each month, in what became a massive windfall for Wall Street. All of it happened without Wall Street having to significantly change anything in how it operated. Even worse, the market for risky financial practices is booming again. Huge bonuses to CEOs continue to rise. It’s now assumed that any urgent and necessary reform will have to come after the next great crash.
But don’t tell Elizabeth Warren that. For her the time is now and the need for political reform to effectively match any kind of economic change is essential before it’s too late. Here it is in her own words:
“I know everyone is wringing their hands about the recent election. What went right, what went wrong, what we could have done better, what we need to do now, and these are all very important questions. But one thing has not changed: the stock market and GDP continue to go up, while families across the country are getting squeezed harder and harder. Dealing with this problem requires an honest recognition of the kinds of changes we need to make if families across the country are going to get a shot at building a secure future. This is not about big government or small government. Rather, it’s the deep down concern over who government works for. Say what you like, people across the country, everyday folks with bills to pay and kids to raise, know that this government does not work for them.”
This isn’t new stuff, but it’s powerfully presented and courageously proclaimed. To the great discouragement of many, Warren has opted not to run in the upcoming race for the presidency. Many Democrats, fearful of another elitist candidate like Hillary Clinton or other challengers, are pressing her to jump into the race; she refuses. And the Republicans? Well, Elizabeth Warren is their worst nightmare – a populist with punch. For now at least, she is contented to align herself with the citizen side of politics and in doing so she is gaining some remarkable credibility in an awfully pessimistic time.
She’s come by her financial perspective honestly. A former Harvard Law School professor, she’s an expert on how Wall Street and the financial industry is, in her words, “destroying the middle class.” That intelligence sees her rapidly becoming the most articulate voice in Washington D.C. In fact, Vanity Fair finished a column on Warren titled The Woman Who Knew Too Much.
Another title would also have been appropriate: “The Woman Who Experienced Too Much.” Read her book, A Fighting Chance, as I did over the holidays, and you’ll immediately pick up the narrative of a young girl (Warren) personally witnessing her normal middle-class family decline in income, stature, and hope. A sad tale, it is also the story of millions of families who looked to government for a sense of balance and who came to the understanding that they were alone. It was that experience, unfolding over difficult years, that lit the fire of challenge that eventually wound its way to the U.S. Senate. That mix of the personal, the passionate, and the principled, is what makes her a modern force to be reckoned with – her story is like that of millions.
At a time of record corporate profits, a time when 14 million Americans are out of work, when millions have lost their homes and, according to the Census Bureau, the ranks of those living in poverty has grown to one in six, Warren has turned this development into a just cause. She has become the living embodiment of advocate Elie Wiesel’s observation that, “There may be times when we are powerless to prevent injustice, but there must never be a time when we fail to protest.” And protest she does – a voice to the voiceless, an oracle to the outcasts, and an enemy to the elites. But she’s intelligent enough to know that unless millions of others follow suit she will remain a voice crying in the wilderness.