Tuesday, June 03, 2014

Elizabeth Warren: "A Fighting Chance": More about policy, less about personal values

Author: Elizabeth Warren
Title: “A Fighting Chance

Publication: 2014, Metropolitan Books, ISBN 978-1-62779-052-9, 366 pages, hardcover, heavily endnoted and indexed

Amazon link

On the Washington DC Metro, Sunday afternoon, going in to see an independent film, boarding at Ballston in Arlington, I was fortunate enough to sit by (in a crowded car) an attractive young man who noticed the book I was reading, and said, “that’s who should become president, rather than Hillary Clinton”.  It turned out he had been interning for another Democratic Senator and was about to look for real jobs on the Hill.

There are always two sides to the question of inequality question.  (Warren insists that nobdoy makes it completely on his own.) One side (as does Warren in most of the book) advances policy changes to level the playing field – and Warren argues quite persuasively in this book that it is much harder for “average people” to maintain traction on the treadmill than it was for my or her generation (I am six years older than her).  Policy changes often include rolling back tax shelters and breaks for the rich, and particularly more regulations on corporate America (especially, in this book, banks and financial institutions) to prevent deceiving ordinary consumers and tricking them into “irresponsible” personal financial decisions and investments (like overpriced homes with subprime loans).

The other side says that helping the poor is an individualized, personal responsibility, part of one’s karma.  Volunteer more.  Sacrifice.  Take turns in the soup kitchens.  Or make it personal.  Adopt disadvantaged children.  Get real.  And some of the more conservative churches (especially LDS) are very good with resilience, and with helping everyone after real disasters (like Hurricane Katrina in 2005).  Warren’s coverage of the personal vulnerability of many families – to one illness, natural disaster, or even crime victimization, would seem to underscore this view.  All of this melds with the view of equality of opportunity and collective resilience as moral imperatives.
Warren goes through her early like quickly.  But when he dad had heart trouble, the family care was repossessed and mom had to work.  She won a scholarship at George Washington University (from which I graduated in 1966) but dropped out after two years to get married.  Fantastically, while a mom, she finished her degree in Houston, went to graduate school, and eventually (and rather quickly) became a law professor.  That simply shows to me old fashioned ambition and hard work – a conservative virtue.  She notes that when she taught bankruptcy, she actually had students who didn’t take the subject seriously and flunked the course.  She gives a lot of personal anecdotes, like vomiting from nerves before going onto television.

She explains what led to the 2008 bust well.  It’s true, it was a vicious cycle.  The banks had won the deregulation they wanted, and Wall Street went wild with securitizing loans (and inventing default swaps).  With looser regulation, buyers could be approved with subprime interest rates and weak credit.  When the introductory rates expired, they couldn’t make payments.  Anyone with any sense would see this couldn’t be sustained.  But there was a whole system.  Because houses were temporarily overpriced, buyers had to go for it.  Mortgage salesmen had to make cheesy pitches to make quotas.  But were the individual homonwners “personally responsible” for trying to get something for nothing?  Should they have known better, if they thought ahead five years?  Oh, yes, real estate would go up forever, right? 

Warren makes some comparisons to the SL crisis at the end of the 80s, which was regulated more closely with a lot more prosecutions and lawsuits.

She talks about her work with COP (the Congressional Oversight Panel) and the creation of a CFPB (Consumer Financial Protection Board).  She makes the point that financial arrangements should be regulated as “consumer products” rather than as “contracts”, buried in legalese.

The last part of the book concerns her run for the US Senate.  As a “pundit” or amateur journalist, I personally find it very difficult to contemplate volunteering for any particular partisan candidate.  Yet, it was with campaigns, volunteers, and solidarity that policy, collectively, used to get changed.  Would Warren really run for president? 

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