Dear Sen. Warren,
I’m not particularly interested in rehearsing old critiques of your life and work for their own sake. But I think it’s important that voters, just a few months away from the all-important Iowa and New Hampshire contests, get a better sense of your policy priorities and values. In the ongoing debates in the Democratic primary campaign, it’s become easy to perceive you as Bernie-lite, one of the more progressive candidates on offer, distinct from Julián Castro, Cory Booker, Kamala Harris, et al., yet safely within conventional American political discourse. I think it would be better for your own prospects if there were more clarity about certain things you’ve said and done. With that in mind I pose some questions trying to get at your ultimate belief system.
1. In “Bankruptcy Law,” your linchpin 1987 Chicago Law Review essay, you write: “Because the bankruptcy system relies on private parties to initiate proceedings, it necessarily presumes information and transaction costs are sufficiently small to permit rational choices.” Your scholarship is said to have moved on from the laissez-faire “law and economics” approach upon which you cut your teeth during the early Reagan years, toward a viewpoint more sympathetic to the failings of the market.
But even in this essay, which adheres closely to your thinking from that point on, your emphasis remains on making better information available to consumers in order to make markets stronger and more efficient. In light of the three decades of market abuses that have since then come to light, both at the micro and macro levels, do you now hold a more skeptical view of markets? On health care, education, infrastructure, climate change and other critical issues of public policy, have you abandoned faith in the market? Some of your opponents in the Democratic primary are clear about what should fall within the market’s purview, and what should fall outside it. Where do you stand? Is there anything you would now definitively exclude from the market?
2. In your 2003 book “The Two-Income Trap: Why Middle-Class Parents Are Going Broke,” your sympathies lie with the middle class playing by the rules yet often falling by the wayside because of errors in judgment. Your financial planning advice to this fraught middle class presumes the economic playing field as a given, with the individual players needing to be astute and sharp in dealing with forces more powerful than they are, so they can have “more breathing room.” As you write: “We haven’t suggested a complete overhaul of the tax structure, and we haven’t demanded that businesses cease and desist from ever closing another plant or firing another worker. Nor have we suggested that the United States should build a quasi-socialist safety net to rival the European model. All of the solutions we have proposed thus far — creating tax incentives for saving, expanding state-funded disability coverage, and encouraging families to insure themselves against an uncertain future — can be implemented within America’s current blend of public and private systems without drastic changes or massive tax increases.”
The major thrust of your advocacy in the early 2000s was the idea that the “stay-at-home mom…[was no longer] the family’s safety net,” so toward that end you suggested staying at home or having no children as possible options, while holding that “it is quite possible that the biological drive to pass on your genes will continue to win out over seemingly more rational financial calculations.” Do finances have to be the ultimate arbiter of life choices? Why not change the rules rather than expect families to learn to better play the rules.
3. Should the Democratic Party, as some of its more progressive leaders have articulated recently, return to an emphasis on the working class, as was true during the New Deal era, or should it mostly try to alleviate the anxieties of the middle class, as has been true of the centrist wing of the party in recent decades? You admit that you grew up in the pre-feminist outlook represented by the Betty Crocker Homemaker of Tomorrow Award, which you won in high school. How far have you really moved from the money management emphasis of that course?
You cut your teeth on the “value-neutral” philosophy of the law and economics school, but your later thrust toward regulation seeks to impart precisely that quality of neutrality to the economic sphere, rather than accepting the inherent biases of a neoliberal economy, which no amount of regulation can overcome. Though you often recite the financial difficulties your own middle-class family faced when you were growing up, how was it possible for you to start off the study of bankruptcy law believing that you were going “to expose…[those] people who were taking advantage of the rest of us by hauling off to bankruptcy and just charging debts that they really could repay?”
This insight, that the middle class does not game the system, has remained the foundation of your political philosophy. But is that too narrow a base from which to provide the kind of leadership the country seems to yearn for? For example, does your hesitation to forgive all student and medical debt stem from this ethic of responsibility, which is also the foundation of neoliberal economics? In 2009, you told Newsweek that the role of government should be to “help families directly, or help markets in ways that help families,” implying an equivalence between the two, when such may not be the case with the way our economy has evolved in the neoliberal direction.
Similarly, your daughter Amelia Warren Tyagi, with whom you have co-written books and who is clearly a full political partner, has set herself up as a headhunter by founding the company Business Talent Group for freelancing consultants and top executives. This company represents those who have the resources to do well under the gig economy. But can one profit from that while simultaneously being sympathetic to the plight of those left behind? The same question applies to Amelia’s founding of a venture capital-backed health benefits company called HealthAllies, which was later acquired by UnitedHealth Group, currently the largest for-profit managed care provider in the world.
4. Your current reputation was made on the popular mantra of “too big to fail,” on which many critics harped following the 2008 economic crash. But is that the problem, which you seek to address by way of regulation, or is a more structural analysis of the economy required at this point? James Surowiecki wrote of you, in the New Yorker, that “the core principle of Warren’s work is also a cornerstone of economic theory: well-informed consumers make for vigorous competition and efficient markets.” For example, when you were at the Consumer Financial Protection Bureau (CFPB), one rule pushed mortgage lenders to make “good faith efforts” to help homeowners in trouble. As we now know, that didn’t do much to prevent massive foreclosures, though the CFPB is said to be your highest achievement. To present the case that the economy is “rigged,” as you persistently do, is to assume that unrigging it will somehow free up its resources for everyone. This suggests the kind of naïve faith in markets that doesn’t seem too far from your original law and economics mindset.
In the Senate, your Bank on Students Emergency Loan Refinancing Act, seeking to lower student loan interest rates, failed to pass, though you did succeed in passing the Smart Savings Act, which improves the returns federal government workers receive on their retirement benefits, and the Over-the-Counter Hearing Aid Act, which lowers prices. The confidentiality of biomedical information also received your attention in the Genetic Research Privacy Protection Act. It seems that this small-bore regulatory effort is where you best find your métier, but that when opportunity comes calling for big ideas you go missing. You’re well known for grilling Wells Fargo CEO John Strumpf in televised hearings, but when it came to TARP (the Troubled Asset Relief Program), one of your primary criticisms was the fair valuation of troubled assets. To lambast a wayward executive is one thing — and very crowd-pleasing at that — but to question that the rules themselves may be set up unfairly requires a different order of courage, which cannot be solved by identifying certain corrupt individuals and getting rid of them.
5. I take your explanation of why you declared yourself Native American on job applications and other professional contexts at face value, namely that this is what you were told by your family. At the same time, you had to have been aware since the beginning that this was a contentious claim to make, especially given the tragic history of Native American treatment in your home state of Oklahoma. Your admiring biographer Antonia Felix, in “Elizabeth Warren: Her Fight, Her Work, Her Life,” absolves you by claiming that “oral history…[carries]…weight in genealogical circles,” which would seem to be your position today. But what interests me more is not what you claimed then on that particular issue, but how it seems to fit into a pattern of latching on to whatever seems popular at the moment.
After Occupy found resonance, you claimed that you “created much of the intellectual foundation for what they do,” yet later retreated from the movement, declining to sign a petition by the Harvard chapter of Occupy. In apologizing for your exaggerated claim for the intellectual birthing of Occupy, when you admitted that your assertion “made it seem as if I were trying to take credit for a protest I wasn’t even part of,” your words sound eerily reminiscent of the way you distance yourself today from being a “Cherokee wannabe,” as your biographer has put it.
In like vein, your view of bankruptcy evolved from holding debtors responsible to being more sympathetic to their plight as we moved past the Reagan era. When you arrived at Harvard in 1995, that’s also when you switched your registration from Republican to Democratic. In the 2000s, you appeared on popular talk shows like “Dr. Phil” to offer advice that strengthened the middle-class value system of personal responsibility, while asking viewers not to blame themselves. In the Obama years, you reincarnated as an advocate for consumer financial protection, lending a more activist gloss to your earlier views on bankruptcy, but adding castigation of Wall Street fat cats to your resume. You stayed on the sidelines in the vigorously contested 2016 Democratic primary, when voting for the first potential female president seemed to be the most glamorous option of the day. Finally, amid a Democratic electorate that has rapidly moved left in the last four years, you’re now signing on to many of their signature proposals, including the Green New Deal and student and medical debt cancellation (partial, in your case). Which is the true Elizabeth Warren, and which one can we expect to see as president?
Your close friend and legal adviser of 15 years, Vanderbilt law professor Ganesh Sitaraman, seems to uncannily echo the rollout of your various plans in his forthcoming book “The Great Democracy: How to Fix Our Politics, Unrig the Economy & Unite America.” Of the four alternatives on offer — reformed neoliberalism, nationalist populism, nationalist oligarchy and the great democracy — he clearly sees the last as the best option, as do you. But although Sitaraman admits that neoliberalism can no longer be reformed, he seems to retain a lot of faith in the existing economic system to accommodate high-minded reforms such as the Patriot Corps program of national service to unify all Americans, fixing the media and big technology with renewed antitrust enforcement, and a Welcoming America Program to help transition immigrants into our economy.
Each of these initiatives seems to require a corresponding new regulatory framework, such as a new Anti-Monopoly Agency, the new FedAccounts (making Federal Reserve bank accounts available to everyone), a new Department of Economic Growth and Security to coordinate trade policy, and new public options for everything from internet provision to health care. The public option, rather than a universal program available to all such as an undiluted Medicare for All, didn’t seem to go anywhere in the Obama years. So why put so much faith in it now? Both Sitaraman and you seem to be defending Progressive-era democracy, whereas the world in recent years has already moved beyond neoliberalism toward a consolidation of nationalist oligarchy, which won’t easily bend to regulation.
In short, Sen. Warren, you have a job to do to explain to the Democratic voters of Iowa, New Hampshire, Nevada and elsewhere exactly where you stand and how and to what extent you have evolved. You’ve spent so much time at black churches in Boston that the associate pastor for the Twelfth Baptist Church says, “We sort of consider her a member.” Can the same be said about your recent alliance with the left populism burgeoning amid the grassroots of the Democratic Party? What is your answer to the argument that elite-driven regulation can easily be reversed, as Trump has done with what remained of the CFPB and even the Dodd-Frank Financial Reform Bill?
Exactly what kind of a movement — if it can be called a movement — are you trying to lead? Is it enough to fight Trump, who has a consistent if loathsome nationalist economic agenda, with a technocratic insider’s faith in regulation to balance the economic playing field? If not, do you then run the risk of dissipating populist energy by channeling it into an affirmation of things as they are, rather than as they should be? Are you the reality-defining idealist we need at this crucial moment, or a true believer retaining faith in the system against all odds?
I look forward to an invigorated clarification of ideas between you, Vice President Biden, Sen. Sanders and the other Democratic contenders than we have seen so far. The country needs such illumination, regardless of whom the voters eventually choose. That’s much better than deflecting such clarity through unfocused anger against Trump, or the potentially worse disservice of spreading the impression that the Democratic contenders are all more or less on the same page.