CAMBRIDGE, Mass. — How has an earnest 64-year-old Harvard professor with a specialty in bankruptcy law emerged as a progressive hero and presidential prospect?
For one thing, listen to what Massachusetts Sen. Elizabeth Warren says when asked if some bankers should have gone to jail in the aftermath of the financial crisis of 2008. “You always want to be careful about this as a lawyer,” she begins in an interview with USA TODAY, sounding every bit a senator. Then she stops herself. “Actually, no, let me start that one over. Yes!”
Warren is discussing her unlikely political journey and her new book, A Fighting Chance, over a lunch of fried flounder fingers and corn bread at the Summer Shack, a fresh-fish place and her favorite local joint back home. To the surprise even of herself, less than two years after being elected to her first political office, she has become the leading voice of a populist movement shaping the Democratic message for this year’s elections and perhaps beyond.
She has done that with a peculiar combination of professorial data points and plainspoken language. She mixes decades of study into what drives people to financial ruin — more likely to be a lost job or failed marriage than profligate spending, she concluded — with outrage over a system she argues is rigged against ordinary folks in favor of plutocrats.
Plus a dose of political karma.
Consider this: Some Republican senators made it clear they would block her confirmation for the job she wanted, heading the new Consumer Financial Protection Bureau she had helped create. So she challenged Republican Sen. Scott Brown and returned to Washington as a senator herself. She says some of her GOP Senate colleagues still haven’t gotten over it.
“Every time I walk past one of them and they say harrumph,” she says, imitating a growling noise, “it makes me laugh.”
Or this: When she led the congressional oversight board for the bank bailout, then-White House adviser Larry Summers invited her to dinner at the tony Bombay Club to explain what she calls the one unbreakable rule for the town’s insiders — that is, insiders don’t publicly criticize other insiders if they want to keep their influence. She declined to take his advice. Last year, she was among those who helped engineer the appointment of Janet Yellen instead of Summers to lead the Federal Reserve Board.
Warren’s willingness to confront the powerful and question the system has fueled her rise as a sought-after speaker and fundraising phenom for Democrats; the Progressive Change Campaign Committee describes itself as part of the Elizabeth Warren wing of the Democratic Party. Her actions have also made her a red flag for Wall Street, a target for free-market conservatives and a concern for some moderate Democrats. There is her send-them-to-jail response about bankers, for instance.
“I was thinking, you never want to comment about an ongoing investigation; (then) I thought, shoot, there aren’t any,” she says, explaining her initial hesitancy. “Look, let me put it this way: It is not possible for a corporation to break the law without someone inside the corporation breaking the law. If we want real deterrence in the system, it has to be that individuals are held accountable whenever they break the law.”
She has struck a chord with the populist left, energized by alarm over growing income inequality and the struggle by some to regain their financial footing even as the economy recovers. When Warren is being interviewed in front of the Reflecting Pool on the west side of the Capitol, an admiring worker from the Department of Health and Human Services, heading to Union Station to catch a train home after work, stops to watch.
“Sen. Warren, you make me go to work every day,” Christi Dant calls out with a smile when the interview ends.
“You make me go to work every day,” Warren calls back.
IS SHE RUNNING?
Not since Barack Obama has a freshman Democrat faced so many questions about a potential presidential race. In another parallel with Obama, the question is whether the new senator might challenge Democratic front-runner Hillary Rodham Clinton for the nomination.
The New Republic put it this way: “Hillary’s Nightmare? A Democratic Party That Realizes Its Soul Lies With Elizabeth Warren.” In The Washington Post‘s political blog, The Fix: “There’s only one person in the Democratic party who has a credible path to beating Hillary Rodham Clinton in a 2016 Democratic primary. And her name is Elizabeth Warren.”
The working theory is that Warren not only can raise money — she amassed more than $40 million for her first race — but also excite passions among liberals, labor unions and other core Democratic supporters who have been disappointed by Obama. She lacks Clinton’s broad experience in government but she also lacks the considerable baggage the Clintons have accumulated during more than three decades in the public eye.
Is she interested?
“I’m not running for president,” she says. “We have races in 2014 that we have got to focus on. We have issues that can’t wait.”
And after 2014?
“I am not running for president. I’m working on these issues, right now.”
Whether or not she ever seeks the White House — her demurral is not exactly a Shermanesque denial — Warren already has had an impact on the Democratic Party. She has energized the left in a way it hasn’t been in a generation, since before Bill Clinton was elected president touting himself as “a new kind of Democrat” willing to support the death penalty and overhaul welfare. She has helped shape a message for the 2014 midterms centered on such pocketbook issues as raising the minimum wage and easing the burden of student loans. When Obama was ready to sign on to a modest curb in Social Security benefits as part of a now-defunct “grand bargain” with Republicans, Warren countered that retirement benefits ought to be increased for those who depend on them most.
That prompted warnings from Jon Cowan and Jim Kessler, leaders of the centrist Democratic think-tank Third Way, about the danger of Democrats being lured over a “populist cliff.” In a Wall Street Journal op-ed that brought liberal protesters to Third Way’s office building in downtown D.C., they called the idea of raising Social Security benefits rather than addressing the system’s long-term financial stability a “populist political and economic fantasy” and predicted that approach would be “disastrous for Democrats.”
She alarms strategists who argue that the Democratic Party — after electoral routs when liberals George McGovern, Walter Mondale and Michael Dukakis won its presidential nomination — has to hew toward the center and appeal to moderate independent voters to win national elections. They note that the only two Democrats to win the White House in the past half-century were Jimmy Carter and Clinton, neither initially the preferred candidate of party liberals.
Then there are conservative and Republican critics who accuse her of lacking allegiance to capitalism and an understanding of markets. When the U.S. Chamber of Commerce endorsed Brown in the Massachusetts Senate race, national political director Rob Engstrom declared, “No other candidate in 2012 represents a greater threat to free enterprise than Professor Warren.”
She argues that on issues such as the minimum wage and student loans, Americans overwhelmingly agree with her. “This is not far to the left,” she says. “This is mainstream. This is where America is.” She likens the moment to the Progressive Era at the turn of the 20th century, when Teddy Roosevelt and others challenged the power of the railroads, the banks and the political machines.
“America’s middle class has just been hammered for a generation now, and I don’t mean over just one thing,” she says. “It’s been everywhere. It’s been over income. It’s been over education. It’s been over housing. It’s been over retirement. It’s just bang-bang-bang, where the big guys just keep pulling in more and more of the profit and leaving families struggling. People get it that this system is rigged. I just give it voice.”
To the critique that she doesn’t recognize the importance and role of, say, big banks, she replies, “Their problem’s not that I don’t understand what they do. Their problem is I understand exactly what they do.”
‘ATTORNEY AT LAW’
Her district office is Boston is on the top floor of the John F. Kennedy Federal Building, which has a spectacular view of the city’s downtown and harbor. The first time she stepped into the office, almost 16 years ago, she was lobbying then-senator Edward Kennedy to oppose a bankruptcy law — never imagining she would one day fill his Senate seat. She shows off mementos on her bookshelf, including a chipped black wooden sign with white lettering that reads, “Elizabeth Warren, Attorney-at-Law.”
Finishing Rutgers Law School had been a stretch. Growing up in Oklahoma, her family struggled to stay in the middle class. She was able to go to college only by winning a debate scholarship, at George Washington University, but she dropped out after a year to marry her high school boyfriend, Jim Warren. In her new book, which will be published Tuesday by a division of Henry Holt, she describes the difficulties of juggling her responsibilities as a young wife and mother of two with her ambitions to do more.
Her first marriage ended; her career as a law professor launched. She married a fellow law professor, Bruce Mann, deciding to keep her first husband’s last name because she said it would help make life easier for their two children. She became an expert on bankruptcy, which eventually led her to government: First appointed to the National Bankruptcy Review Commission during the Clinton administration, then to the congressional oversight panel appointed to oversee the federal bailout. That put her at regular odds with policymakers at the Treasury Department and White House who, in her view, rescued the banks without doing the same for regular citizens. (That chapter in her book is titled, “Bailing Out the Wrong People.”)
She proposed creation of an agency devoted to protecting consumers from predatory practices and corporate deceit — the Consumer Financial Protection Bureau. Much of the book chronicles the uphill battle against political opposition and an army of well-paid lobbyists to create the bureau and get it running, although in the end, she had become such a lightning rod that Obama, to her dismay, decided against appointing her to head it.
At the end of each week, exhausted after “beating my head against a brick wall,” she would fly home to Boston and head to the Summer Shack with her husband for fried clams, light beer and a recounting of the week’s setbacks and breakthroughs. They have been coming here since before the current owners, when it was a Polynesian restaurant. She recalls when the carved 6-foot statue of a lobsterman at the entrance was a Tiki, now disguised with a fisherman’s pipe and beard.
She returns whenever she can. “It makes me feel grounded,” she says. “Washington can be such a bubble, and it’s not my place. This is my place, here, at the Shack.”
Courtesy of USA Today