Elizabeth Warren: Keynoter on the “money” issues

Elizabeth Warren‘s race for the Senate in Massachusetts looks like what Harold Macmillan had in mind with the famous quip — when asked what actually changes the direction of things: “Events, dear boy, events!” If the lady law professor from Oklahoma and Harvard in her first run for office can re-take the lost “Kennedy” seat, it could mark a moment and place when the second Gilded Age was called to account by a one-issue candidate. If, on the other hand, the upset winner in 2010 of Ted Kennedy’s unfinished term, Republican Scott Brown, can win as a photographer’s model of suburban contentment, on likeability and slogans like “He’s for us,” the event will mark something else — unflappable composure, perhaps, or psychic numbing.

Elizabeth Warren has been the cutting edge of the Democratic Party on the “money issues” since Barack Obama took office, often resisting and goading him. She’s still hot as a pistol on YouTube — berating Timothy Geithner back in 2009 for pampering Goldman Sachs in the AIG bailout, explaining to Michael Moore why you can’t buy exploding toasters in the USA but exploding mortgages are okay. Her campaign is a lot cooler than that and can sound blandly repetitive on the theme of rebuilding the middle class. But the drift of her books, teaching and regulatory career is clear: public investment empowered American life, while abusive private power, specially since the 1970s, has bankrupted the American dream. She could hardly have imagined the drum-beat of summer scandals — the Barclay’s bust, LIBOR rate gaming, JPMorgan-Chase’s disappearing billions, the torrent of unattributed campaign money — that might be taken to reinforce her point.

We’re in conversation at the JFK Library overlooking Boston Harbor. Senator Brown declined the Library’s invitation to this session, but everybody’s left doors open to another. The notion was somewhere between campaign stop and an open seminar — maybe a park-bench conversation before 600 people on the state we’re in — and how the researcher of works like The Two-Income Trap: Why Middle-Class Parents are Going Broke sees it differently now on the main streets of Massachusetts. On the day we met she was celebrating the second birthday of the Consumer Finance Protection Bureau which she designed for the Obama administration — and where many friends, including Ralph Nader, expected the President to put here in charge. Instead the White House encouraged her to try out her ideas (and some of theirs) on the hustings.

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  • Robert Zucchi

    What a valuable discussion this was for those who are seized by perplexity and fear when contemplating the drastic turn of events they’ve witnessed since “the defeat of Communism” twenty-odd years ago. Many believed then with Francis Fukuyama that liberal capitalist democracy had proved to be, pragmatically and morally, the superior system for ordering society, and that it had irrevocably superseded all competing systems.

    However, there were more things than were dreamt of in his philosophy, to coin a phrase.

    I am Mr. Lydon’s age, and I share his palpable unease when I reflect on the succession of Americas he and I have lived in (particularly since 1970, more than half our lives-to-date). Victory in WWII. Generalized postwar prosperity and an expanding middle class. Global superpower. Cultural tastemaker. But subsequently or simultaneously: long economic stagnation. Growing political antagonism and sectionalist estrangement. And in this new century, military adventurism. Severe economic contraction. Politics as civil war by other means (to stand Clausewitz on his head). And, yes! Proletarianization.

    Mr. Lydon asks Elizabeth Warren, in so many words, why the much put-upon working American is susceptible to the sententious analyses of our predicament put forth by the moneyed elites and their dogsbodies. Well, everybody’s happy to have a promotion. When working people began to be flattered by politicians and the media as “middle class,” even as their prospects eroded, they responded humanly enough by identifying their interests with those of their fellows who enjoyed a higher status and income. Reinforcing that behavior was the folklore of America as a land of opportunity, the world’s richest country, etc. In short, it is an article of faith with many ambitious American that they are, by virtue of: nationality alone, or contrived appearance, or killing themselves striving to be, or going seriously into debt to simulate being, *prosperous,* lest they be condemned to suffer a drastic loss of face and a kind of civic death. (A billionaire like Warren Buffet is exempt. He is so rich that he may without risk to his reputation drive an old car and live in a modest house. Would that he had the power to convey the dispensation granted him and the values that attend on it to the rest of us.)

    Another question raised by indirection in this discussion is the validity of the American variant of capitalism. Money is fiction, says one sage. Silver certificate? History. Redeemable in gold? Insert joke here. There are not enough of these precious metals in the vaults or in the ground to underpin the major currencies anyway, even if the metals themselves had an absolute, unchanging value, which plainly they don’t. So, just as with the peer-driven obligation to prosper, or at least to present a simulacrum of same, money has been revealed, for your and my brief moment in the cosmos anyway, to be just one more dodgy, reified abstraction. (Don’t despair. Of course these delusions will reassert themselves. They have to.)

    It seems capitalism is inherently inflationary, and never more so than when an economy is white-hot. (Ask the Chinese, or a Norwegian trying to buy an airshaft “condominium” for two million kroner.) In many respects this is explicable. Years ago a housing contractor said to me, “They’re not making any more land.” So a diminishing vital commodity is sure to be more expensive. But in other respects the genesis of inflation is much less explicable. For example, the recent news that college graduates owe a trillion dollars in student loans. This is sure to create a few heretics among the faithful in the Church of Higher Education, which preaches that a degree is a meal ticket engraved on sheepskin.

    When the postwar boom ended in the 1970s, owing in part to our seriously underfunded spasm of bloodlust in Southeast Asia, and in part to the Arab oil boycotts, the Republicans had already settled on a strategy to counter the electoral advantage of the Democratic Party. They had a ready-made constituency among the eternally disaffected denizens of our lower latitudes (and their Copperhead brethren elsewhere), who’d been recently outraged by the Johnson administration’s initiatives on civil rights. Just as appealing, from a plutocrat’s point of view, was the region’s long, long history of economic feudalism (free or nearly free labor, all profits to Massa). Since our moneyed elites suspected what we did not: that postwar prosperity was at an end, and that to preserve their advantages the elites had to nudge the U.S. in the direction of Latin America (a tiny middle class, lots of campesinos, and latifundistas ventriloquizing behind the scenes), what more valuable ally could they cultivate than a folk who largely acted as if the latter-day planter class ruled by right of God’s preferment, and that the lower orders derived their circumstances from the just workings of Predestination? (You could pay King Richard’s Faire a visit, but it’s more useful to head for where the quaint workings of the l’Ancien régime de l’Angleterre are still operative.)

    Since this subculture’s belief system is in so many ways at variance with small-d democratic norms, how could this alliance prove to be so competitive? I think that as general anger mounted over the insults and setbacks suffered by average Americans saddled with joblessness, a wayward government and a failing economy, the vulgar energy that is the perverse strength of a subculture born irascible, contrary, and disputatious began to attract adherents. Predictably, as in 1930s Europe, partisans of scapegoating and uncompromising doctrinal rigidity began to drown out voices calling for a more measured discourse. (To be progressive is mostly to want to be reasonable, not an advantage in 2012.)

    It pleases us to think that the kind of democracy we’ve historically championed is the default form of government in this new century. And in fact, every day brings fresh evidence that a zeal for democratic governance is driving people in the unlikeliest places to risk their lives in the streets in protest against authoritarianism. Their courage should hearten us. But these rebellions are unpredictable as to their outcome. Revolutionaries always invoke freedom, but are usually chary about granting it.

    Seen in this light, it’s clear that democracy is one ideology among many, and far from prevalent in the world at large, as a few minutes of the daily news grimly demonstrate. A yearning for liberty is surely in the aspirational nature of man; but there are countervailing forces too in the human heart, like brutishness and sadism, and the most enlightened civilizations have not wholly extinguished them. Not for nothing did the Founders invoke the warning that eternal vigilance is the price of liberty. (They were not being alarmists … they were, as so often, prescient.)

    Mr. Lydon and Ms Warren clearly believe in values that I want to see upheld. But we’re past the time for waiting for “events,” or for moderation to reassert itself. We have a fight on our hands. As I’ve said elsewhere on this site, small-d democratic values are not merely desiderata. Insist on them. Ideologize and internalize them. Proselytize for them. Adopt democratic nominism as your personal credo, and measure opposing views against it. The price of our liberty is not just the vigilance of a watchman, but the ardor and courage of a patriot.

  • The Parrot

    Enjoyable conversation. I am dubious about Ms. Warren’s good intentions. The political hegemony appears to be structurally unsound in terms of the following criteria: are we governed or ruled? It’s constructed and fortified to avail itself essentially to the perversions of money. Power and clout follow money, not the citizenry (Can you spell NRA?). That said, it would be great to see Senator Warren, along with Senator Sanders, leading various quixotic missions in which their adversaries claim they are tilting at windmills (Don Quixotic for all his faults, acted foremost out of love, care, generosity, personal legacy). The middle class (a term of art-of-the-cannard) has become the windmills with big chubby targets pasted across our collective. Targets are located in phrases such as, consumer (price) index and its martial repetition creates a psychological gap between consumerism (herd mentality for consumption) and citizenship(rights & responsibilities). We can feel the collateral damage while we wait for Godot; we can’t go on, we will go on, we’ll worsen and fail better whilst the affluent amass more-and-more. Ms. Warren’s moral energy and clarity of mind is refreshing, and part of the Emersonian world spirit. I wish her well in her tilting at the plutocracy, managerial, shareholder classes … until we all finally huddle up after some future collapse, environmental catastrophe, military adventure gone amok, fundamentalist wrath from some hometown god, etc, etc, etc, peace to one and all …

  • orangescissor

    Great conversation – the LIBOR scandal is as close to a smoking gun as there is for financial collusion and racketeering, so hopefully there will be some major SEC cases and new regulations. Also, from what I understand “Citizens United” is not just a Supreme Court issue. Like gun control, it is up to congress and politicians, not just the courts, to create better laws. Ultimately this might help in creating reforms, because citizens can lobby Congress and the House to pass better laws but they have no effect on the courts.

    Finally, it might be possible that the shadow financing of the campaigns becomes counterproductive in the 2012 election. Negative Super PAC ads might ultimately cast a shadow on the candidate the are supporting, because the public will know that the candidate is beholden to special interests. I hope the democratic party embraces Warren and takes decisive positions on the issues you are discussing.

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  • Sean McElroy

    “we’re past the time for waiting for ‘events,’ or for moderation to reassert itself”

    Kudos for Chris for injecting Tony Judt into the conversation with a Senatorial hopeful even if it echoes impotently.

    And yet one has to consider the pragmatic approach that he might espouse. I could be wrong but I don’t recall TJ being a stalwart for radicalism, indeed he seems to be skeptical of all extemisms while hoping for a reasonable, sustainable middle that supports a majority of living beings. If there is any latitude here it is along the lines of acceptance of radical views while they move the current zeitgiest toward the center and rejecting with critical vehemence when they show their true colors.

    And yet I can see how this may seem harsh and that is indeed a sad summary and does no credit to one of the great thinkers of our time. Let us hope that a new age of great thinkers can move us beyond our biases.

  • The Parrot

    Enjoyable conversation. I salute Ms. Warren and her good intentions towards populist governance and regulations with pragmatism. Yet, I remain dubious as to their ultimate efficacy. The parable of Senator Clinton being a painful example as to why I’m cynical.
    Here’s my speculation: the political hegemons may be incapable of providing high quality governance that serves the citizenry. We are largely ruled by the decree of money, and not governed by consent of the electorate. The political system is constructed and fortified to avail itself to the perversions, distortions, and demands of money. Power and clout are synonymous with money, and the political class is consumed both in the task of scrounging for it and not offending it. To quote Walter Wriston: capital goes where it’s welcome and stays where it’s well treated (NRA, PhRMA, and the financial services lobbies have spent wisely). The D.C. group-think, where mind and gut exist on money, finds its collective tongue therein: Money is speech. And so the ancient problem solved, the circle has been squared by a distinguished group in benighted black robes.

    Putting my cynicism and pessimism aside, I would find it terrific, if not entertaining, to watch and listen to Senator Warren, along with Senator Sanders, leading various quixotic missions in which their adversaries claim they are delusionally tilting at windmills (Don Quixotic for all his faults, acted foremost out of love, care, generosity, personal legacy. The windmill did exist!). It is likely that this would be treated as background noise by the media sector, whose main service they provide is to keep their interests aligned with shareholder returns and happy clients from the country club class.

    And so, it turns out that it is probably that ill-defined, amorphous, monumentally bloated blob called the middle class (a term of art-of-the-canard devoid of content) that has become the windmill for assualt by the chummy hegemon posse from the political-economic-media cartel. It is us who wears a big chubby target pasted across our collective hides and not those from a lobbyist enabled caste. A bulls-eye is struck in a variety of messaging, in terms such as, consumer price index and other measures of production-consumption. The coup-de-grace is the martial repetition that creates a psychological gap between consumerism (a herd mentality with an inexhaustibly relentless appetite) versus citizenship (individuals and collective accorded rights, responsibilities, respect). As citizens, many of us sense the collateral damage while we wait for Godot; we can’t go on, we will go on, our fate worsens, we fail better, drift provided by boom-bust cycles, production-consumption cycles, another jobless recovery cycle (3 in 20 years), numbed out on facebook and twitter, or other distractions du jour. All the while, the affluent amass more-and-more assets, purchase invest in more-and-more political clout, while the rest of us scrounge around bewildered for the merest whiff of goods and services, pondering the intent of the phrase one-person one-vote.

    Ms. Warren’s moral energy and clarity of mind are refreshing, and part of the Emersonian world spirit that swims compulsively against the difficult tides. I wish her well in her tilting at the plutocracy, managerial, shareholder classes that she (and I) sees, though her adversaries will claim she’s delusionally spooked by figments from the leisure caste and must hate the freedoms afforded to us by the free enterprise system. I suspect she will either bend or break or be neutralized by a system which swims in money and drowns out all other considerations. So, until we all finally huddle up after some future collapse, environmental catastrophe, military adventure gone amok, fundamentalist wrath from some hometown god, and suggest to ourselves that enough is perhaps enough, that maybe we should be demanding something else from ourselves and our government, peace to one and all.

  • Sean McElroy

    There was once a line of thought regarding the Kennedy’s that having a pile of money provided immunity to “the political class [that] is consumed both in the task of scrounging for it [power, clout, money] and not offending it.” To their credit there did seem to be some (perhaps too modest) truth to this assertion (at least in as far as Latter Day Robert and Edward the Lion eventually evinced.)

    It’s hard to say, based on their own individual wealth, which of the current Senatorial hopefuls might be more fully vaccinated. But the disease of monetarism is rampant, infectious and difficult to diagnose until the damage is morbid. For what it’s worth, I give Warren the edge of survival over Brown.

    Moreover, I think the country will fare better with an advocate for the Consumer Financial Protection Bureau among the ranks of the Senate than yet another run-or-the-mill Armed Services Committee member.

  • Potter

    It takes someone with such idealism and such determination about what she thinks is right to be able to say that she has not had to move from that idealism, those postions, one iota in this race… to her credit. I think Scott Brown appeals and makes this race even because he is so personally likable, and as you say “laid back”. She comes on exuberant. Get beyond that and listen folks. For me Brown does not seem to have half as much between his ears, half as much of of a grasp on ground level urgent problems.

    Elizabeth Warren can’t be other than who she is, and she knows that. No doubt to some perhaps the more cynical she is hard to believe. The Boston Herald (Howie Carr) sold a lot of papers, or they tried to (they have given up by now) with front pages screaming about this Cherokee heritage business.

    Full disclosure, we are of the 40,000 relatively small (and ongoing) contributors to her campaign frankly because we don’t see anyone to give our designated campaign contributions to as good (we budget for this).

    About education– many more than just 30 years ago- I went to a public college- part of the City University of New York. Were it not for that my parents could not have afforded to send me– nor could I ever have worked for the kind of money needed today for such an education and still kept up with my studies. Those years I cheerfully had lunches of ketchup in hot water with those free oyster crackers. Breakfast was tea with cream and a plain biscuit. I needed to lose a little anyway. I was so grateful for the loan- a small one to pay for books and subway fare- at 3% due well after I graduated. But my tuition was nothing… the bursar’s fee $24 dollars. I don’t know it’s equivalent in today’s dollars.

    How we cheat ourselves by making a college education so difficult.

    I would love to hear you, Chris, interview Scott Brown. Perhaps his refusal to debate in this venue was a good thing. We got a chance to hear Elizabeth Warren unopposed.

  • Potter

    Okay it. My bursar’s 1961-1965 would be roughly $175 per semester today. No tuition costs.

  • nother

    “Sacrifice?” Hmmm, I haven’t heard that word in quite awhile…

    Franklin D. Roosevelt:
    ‘A Call for Sacrifice’, 28 April, 1942
    “Yesterday I submitted to the Congress of the United States a seven-point program, a program of general principles which taken together could be called the national economic policy for attaining the great objective of keeping the cost of living down.
    I repeat them now to you in substance:
    First, we must, through heavier taxes, keep personal and corporate profits at a low reasonable rate.
    Second, we must fix ceilings on prices and rents.
    Third, we must stabilize wages.
    Fourth, we must stabilize farm prices.
    Fifth, we must put more billions into war bonds.
    Sixth, we must ration all essential commodities which are scarce.
    And seventh, we must discourage installment buying, and encourage paying off debts and mortgages.”

  • nother
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  • I have really enjoyed your stuff, Mr. Lydon, over the years. Great conversation, some cutting edge topics. But the fact that you take Elizabeth Warren seriously is a stunner. She can repeat certain shibboleths but an intellectual heavyweight she is not. Her record of using the deeply American concern for racial oppression for her self-advantage is deplorable and demonstrates a hollowness at the center of her mantras. She is part of that class of people who use race as an industry, not a truly moral challenge that requires personal integrity.

    • Potter

      There is no such record of Elizabeth Warren using whatever Cherokee heritage she has to gain entry or position anywhere. There is no evidence at all, despite the storm (a tempest in a teapot) stirred up the Boston Herald until it didn’t sell newspapers anymore. The charge was hollow and so conclusions based on it are also not rational.

      I wish the American concern for racial oppression to be as pervasive or deep as you suggest.

  • i agree with you potter
    you’re right