Wonk & Roll: Will Obama pick balance the scales?
We get to meet and work with a lot of very talented people here at MassINC. But over the years (nine for me and counting) no one has impressed me more than Elizabeth Warren, named on Friday by President Obama to lead the newly created Consumer Financial Protection agency.
CommonWealth interviewed Warren in 2003 about her book The Two-Income Trap and she participated in a CommonWealth forum on the debt crisis facing middle class families the following year. Simply put: she gets it.
Warren saw a pattern in her research. For many middle class families, the American Dream meant buying a good house in the best school district that you could get into. And that meant easy credit, more debts, higher profits and catastrophe when the bubble burst. Here’s an excerpt from that 2003 interview:
Families that feel increasing pressure financially to get into those homes and good school districts meet the lenders, who have every incentive to dole out as much credit as they humanly can. When the two run into each other, the result is a wreck for the economics of the American family and high profits for the consumer credit industry—profits now measured in the tens of billions of dollars. That’s tens of billions of dollars that are drained out of the pockets not of the wealthy—and not of the poor, interestingly enough—but drained out of the pockets of middle-income, hardworking families.
As I see it, she has made it her mission to balance the scales so that the regular guy or gal might have a fighting chance when navigating the complex system of consumer debt that is the backbone of the economy these days. Washington Post opinion writer Matt Miller writing about Warren’s appointment put it best, “Shouldn’t there be someone with the power to look after the little guy in a complicated world?” YES, and Warren is that someone.
It’s no surprise then that she is viewed unfavorably by the consumer credit industry. Warren’s nomination is controversial—so controversial in fact that the President is skirting the confirmation process to let her take the top job by naming her assistant to the President. That’s too bad and a lousy way to launch the new agency. We need more, not less, transparency, and what may appear to be a short-term victory for the President, could backfire as questions are raised about the legitimacy of Warren’s powers. Why not have a confirmation fight and lay before the public the arguments for and against her appointment to lead the new agency? It would be nice for a change to see someone in DC standing up for all of us who play by the rules, pay the bills, and keep our economy going. Time to hire a lobbyist I guess—but first, I got another fee to pay.
An after thought: One more tidbit from Warren in light of today’s Globe’s story about school segregation. In our 2003 interview she said:
Don’t you think it’s time to have this debate—especially when education is so crucial to economic mobility? See our report on Springfield here.
Decouple school assignment and zip code. If there were metropolitan-wide school choice for all parents and if schools were permitted to admit children based on test scores, talents, lotteries —anything but zip codes—then the economic pressure on families would be released almost immediately.
Wonk & Roll is a regular blog post by MassINC Executive Vice President John Schneider on policy topics of interest to the MassINC community. Now let’s get to work.