Friday, October 29, 2010

Elizabeth Warren at Berkeley

I went to see the Mario Savio Memorial Lecture on campus last night, and I think I’m in love.

But I’m getting ahead of myself. Because when I stood in line to get tickets to hear Elizabeth Warren speak, I was thinking about how the financial crisis and the economic fallout are a perfect illustration of the need to be able to think about and explain problems on multiple levels.

It is not the mark of a sophisticated mind to be able to explain a very complicated process or phenomenon in very complicated language. As many of us know, teaching something is the best measurement of how well you know that something, and that the chances are that someone who can’t explain or teach something very well doesn’t understand it as well as they should.

Warren, who has been asked by President Obama to oversee the creation of a Consumer Protection Financial Bureau, was amongst the most trenchant progressive critics of the skewed benefits of the bailout. The video in circulation showing her interrogating Geithner (who looks and sounds frighteningly out of his depth) in her role as chair of the Congressional Oversight Panel on the Troubled Assets Relief Program (TARP) shows someone with a keen grasp of the economics that lie behind the bailout, and a keen moral sense of the dangers posed by deregulation.

Warren has been the recipient of fulsome praise for her ability to explain the complexities of our economy with a clarity that is refreshing, given the muddle that most commentators find themselves in. Ironically, this is where the Obama administration at large is weakest. The man known for his stellar oratorical skills struggles to present both the details of specific policy and the broader agenda to which those policies are tied in a coherent way.

Many of us arrived in the MLK Student Center early, and the crowd was an eclectic one. There were hoary hippies, wearing tucked-in collared shirts bedecked with protest buttons. There were eager-faced students, in bad need of a hero, troubled by the way that the embodiment of hope had become a symbol of political timidity and ineffectiveness. There were leather jackets and knitted caps alongside North Face and Nike. What people shared, besides a desire to hear someone speak to them in a progressive language, were the loud cheers when the moderator came on-stage and announced that the San Francisco Giants had taken a 6-0 lead.

There was an even bigger cheer when Warren stood up at the lectern and outlined her ambitions for the new consumer protection financial agency, which boiled down to “looking out for people as they interact with the financial system”. Warren has put irresponsible and immoral lending at the heart of the financial crisis, and has identified the rectification of the unbalanced power and informational relationships between the consumer and the lender as a central part of both the antidote to our current ills and the preventative medicine necessary to stave off future abuses.

Warren comes across as the kind of professor who would be friendly and open in office hours, but who has a mind like a steel trap and a spine of steel. And she seemed as yet unused to the idea of wielding the kind of power she does, and the potentially suffocating trappings that entailed. She noted that the administration had vetted her remarks, but promised to deviate from her prepared notes! At one stage she started to say, with reference to the format that her agency’s presentation of information would take, that it wasn’t her call, before catching herself with a rueful laugh, ‘Crap, it is my responsibility!’

It was striking to hear Warren repeat, again and again, the centrality of the economic and social well-being of American families. Her story was of the “steady deterioration in the economic circumstances of middle class families”. But she was not invoking family as the exclusive, defensive bulwark envisioned by Republicans, but as a unit that it makes good social and economic sense to protect.

“Seldom”, Warren remarked, do we “stop to think of what government has done for us through the quiet agencies that work on our behalf”. And our failure to make the connection between the safety laws and business regulations, the clean water, breathable air and decent working conditions that many of us enjoy stems from the distance between us and the processes that improve our lives on a regular basis. The impetus for these changes and the agencies that enforce their implementation has often (though not always) come from outside of government, but it is government that makes them work when they do, over the howls of indignation emanating from polluters, corporations, financial interests, disinterested employers and their Congressional lackeys.

But Warren sees the creation of her agency as more than an opportunity to shore up the defences of consumers against the relentless assaults by the immoral thugs of the financial world: she regards it as a chance to create an agency that interacts in new ways with the public. She has set herself the task of not only delivering as much information as possible into the public record (something she believes will lead to a more open and vibrant exchange of ideas), but of actually listening to what people have to say about their experiences of bankruptcy. It is also an opportunity to “show that government can do it right, can fix one part, can belong to the people”.

It is Warren’s hope that, by leveraging technology and the knowledge of consumers themselves, the Agency can become a kind of neighbourhood-watch, tracking the movement of the economic gangsters who have been roaming our financial highways and byways with comparative impunity. And the victims, the people who have been “mugged by contract”, could be characterised by zip-code, ethnicity, age-group or income-level in an effort to combat predatory lending.

No wonder the Republicans hate her viscerally. She is making a powerful argument about the utter failure of their economic system. “There are three historical periods of usury laws”, she deadpanned. The first stretched from the Code of Hammurabi in 1700 B.C. until 1980, and was structured such that “consumer credit wasn’t a place to get rich”. The next, beginning with Ronald Reagan’s deregulation regime, and ending with the financial catastrophe of 2008, turned relations between consumers and financial profiteers into the “Wild West. Whatever you can shoot you can keep”. The third period starts “now, in 2010, with this agency”.

And she puts real teeth into her argument, pointing out that once upon a time, economic booms meant real gains for the working- and middle-classes. During the economic boom of the 1960s, there was 37% real growth in income for working people. In the boom of the past decade, there was a paltry 1.9% growth in real income. This was accompanied by a massive increase in worker productivity, demonstrating that something is seriously wrong—there is a real imbalance in who is reaping the benefits of families’ hard work.

Above all, she is working day and night, by force of intellect, of personality and of conviction, to make government something that works for the people who ought to matter most in our country, while the Republican Party labours with equal diligence to ensure that they sustain a narrative of endemic government failure. But the failures they want to talk about derive from their period of control of the levers of power, and their use of those levers to make government work only for the very same wealthy and irresponsible classes who drove our economy over the brink. In other words, they are rooting for failure, something that Senate Minority Leader Mitch McConnell is appallingly frank about.

In Q&A, someone asked Warren what she would say to those who suggest that the real need isn’t for more regulation, but rather for better-informed consumers. She replied that whilst we could all stand to improve our financial literacy, the point is that credit contracts are not drawn up honestly with the intention of being comprehensible. They are designed to deceive, which is a fundamental break from what contracts have traditionally been about—mutual comprehensibility and trust. “If toasters were exploding”, she snapped in the kind of voice that made Secretary Geithner look like he wanted to wet his pants, and in my favourite Warrenism of the night, “you would not say that more people need engineering degrees”.

Warren also conveyed a real sense of the urgency that is strangely lacking amongst progressives in Congress at such a pivotal moment. Many candidates for re-election are putting themselves through a series of contortions to explain why they’ve been voting over the past two years for things that the American public overwhelmingly voted for in 2008. Instead of being forthright, going on the offensive, and making an unapologetic argument about why the working- and middle-classes are more important than lenders and bankers (there will be moments, Warren declared, when we’ll cut into lending companies’ revenues, sure, but “when we’re doing that, we’re leaving money in the hands of American families”...the people whose labour earned them that money), Democrats are backing away from the progressive agenda that we badly need.

Warren, on the other hand, reminded us of what’s at stake: if we don’t get this right, “we really blow a big opportunity here”. For her, it’s about creating an agency that is outside of the financial industry’s control, which shares data with the public, and which keeps itself independently working for families. It is an argument about the government (that if democratic, it can work effectively for the public), about political office (it shouldn’t be bought), and about democracy (people and their voices should matter more than dirty money).

The urgency is personal for Warren, too, who is all-too-aware of the power of the political and financial forces arrayed against her. “I know”, she said, voice trembling with frustration, “that any day working on the agency could be my last one. But”, she went on, “we’re scrappy”. The political and financial interest is fusing into a powerful obstacle that she suggested will attempt to dismember rather than destroy her agency, removing its power to work for consumers in any meaningful fashion. “I will fight it and I will ask everyone in this country to fight it”. The universality of her message, and the sustained applause from the audience at this point suggested that there are more people in the country than Obama and Democrats believe who need to hear this kind of language, with its clear exposition of the unequal power relations in which working families struggle to survive, and its unapologetic prioritisation of the people whose labour makes our country work.

I suspect that I was not alone in being prepared to vocally declare my eternal devotion to Warren at this stage in the proceedings. She ended with a pledge to retain the qualitative element that has characterised her academic and professional work on the consequences of bankruptcy for families. The stories, she contended, are important. She suggested, to a rapt room, that these personal stories demand that we meditate and reflect on our qualities as a people, and on how our ideals about democracy and accountability, about hard work and its rewards, and about our individual and collective characters measure up to reality. We came to hear someone appeal to our better angels, something all too rare in this election cycle, and we got exactly such an appeal from the kind of progressive hero who is in equally short supply today.

No one doubted Elizabeth Warren when, asked explicitly about the attacks that Republicans and their allies in the financial sector are mounting on her infant agency, she declared “What fights are coming are what fights are coming, and I’m ready”. The real question is, are we ready to back her in this fight for our future?

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