“The CFPB has more than 1,300 employees, yet so far its chief accomplishments are a rule that lets taxpayer-backed Fannie Mae and Freddie Mac stay in the subprime mortgage business; research that attacks arbitration (which pleases the trial bar); and a ginned-up campaign to label bankers unintentionally racist for not lending enough to minorities. It is a thoroughly politicized bureaucracy with a distinctly antibusiness bent.”, Mary Kissel, Wall Street Journal
Book Review: ‘A Fighting Chance’ by Elizabeth Warren
The story of how a middle-class girl rose to the Senate—and came to see the market economy that gave her the chance as ‘rigged.’
April 24, 2014 7:24 p.m. ET
As Americans reeled from the housing bust and recession in early 2009, some 75 like-minded activists from “civil-rights organizations, consumer groups, labor unions, and religious groups” had a powwow at AFL-CIO headquarters in Washington to coordinate their political agendas—a vast left-wing conspiracy of sorts. Democrats had control of both houses of Congress and the White House, and everyone sensed that this was the chance for historic financial reform. Elizabeth Warren, a Harvard law professor and bankruptcy expert, was the guest of honor, seated next to labor chief John Sweeney. She pitched the idea of a new “consumer agency” that would “rein in the financial institutions that were taking advantage of families across the country.” Though the banks “would almost certainly hate it,” the agency would “streamline government and make it more efficient,” she writes in “A Fighting Chance,” her memoir.
Fast forward five years. The Consumer Financial Protection Bureau sits in the heart of the capital in a rented building that it is paying $114 million to renovate. The agency has more than 1,300 employees, yet so far its chief accomplishments are a rule that lets taxpayer-backed Fannie Mae and Freddie Mac stay in the subprime mortgage business; research that attacks arbitration (which pleases the trial bar); and a ginned-up campaign to label bankers unintentionally racist for not lending enough to minorities. It is a thoroughly politicized bureaucracy with a distinctly antibusiness bent.
Yet you’d never know any of this from “A Fighting Chance,” which uses the CFPB to showcase the Massachusetts senator as a dogged fighter for the middle class. She seems to genuinely believe that government can tax, spend and regulate the country to prosperity.
Ironically, her life experience might have taught her the opposite lesson. Elizabeth Ann Herring was born in 1949 to an Oklahoma family that struggled to make ends meet. But young Betsy was a striver, and thanks to her success on the debate team, she won a full scholarship to George Washington University, though she dropped out to marry her high-school boyfriend. She finished college in Houston and landed on the idea of law school “somewhere between diapers and breast-feeding” her baby daughter. By 1976, she had a law degree and a son and, two years later, a job teaching at the University of Houston Law School. Her marriage failed, but Ms. Warren’s parents and aunt moved nearby to help with child care, and she soon remarried.
A Fighting Chance
By Elizabeth Warren
When she moved to the University of Texas at Austin, Ms. Warren volunteered to teach bankruptcy law because the subject felt personal. “I knew what it was like to be afraid, to fear that whatever you had built could be taken away,” she writes, seemingly unwilling to credit her own prudence and hard work. “I wanted to know that the work-hard-and-play-by-the-rules people might not get rich, but they didn’t need to be afraid.” Bankruptcies started to rise dramatically in the 1980s, and through her books and speechifying Ms. Warren became a key advocate for debtor-friendly laws. Along the way, she cultivated powerful political allies, such as Sen. Ted Kennedy and Rep. Barney Frank.
Her politicking scored her a spot on the Clinton-era National Bankruptcy Review Commission, which was supposed to give Congress recommendations on how to reform the bankruptcy code but devolved into partisan rancor. “The whole process made me gag,” Ms. Warren writes. She boycotted the report’s ceremonial release and says that she had “had enough of Washington.” Sort of: The professor returned to Harvard and co-wrote “The Two-Income Trap” with her daughter, a “quant jock” at McKinsey. The popular book, which argued that two-income couples with children are especially vulnerable to unmanageable debt and bankruptcy, landed her on TV and gave her a new public profile. She continued fighting for more lenient bankruptcy laws—
a battle she lost. In 2005 President George W. Bush signed into law a bipartisan reform that tightened requirements and led to a sharp fall in bankruptcy filings.
For Ms. Warren, the “industry-backed” bill was “death by a thousand cuts” for struggling families. “David really did get the slingshot shoved down his throat sideways. It hurt then, and it still hurts now,” she writes. “Even before this grinding battle, I had begun to understand the terrible squeeze on the middle class. But it was this fight that . . . taught me the squeeze wasn’t accidental.” Thus in 2008, when Senate Majority Leader Harry Reid asked Mr. Warren to oversee the Bush-era Troubled Asset Relief Program, which used taxpayer money to bail out banks, she was quick to blame deregulation of the banking industry for encouraging the explosion of subprime lending that led to the financial crisis. She wondered why there were “no mass indictments” of bankers, and her reports paid little attention to the role that housing policies played in encouraging banks to lend to people who couldn’t afford to buy homes. Her populism resonated: “The system is rigged” was the unofficial slogan of her successful 2012 Senate campaign.
Ms. Warren’s descriptions of herself may be the most interesting part of “A Fighting Chance.” To judge by her own account, she seems prone to bullying: She demands that Kennedy fight a bankruptcy bill she dislikes, orders Treasury Secretary Timothy Geithner to wear a seat belt and even picks an hour-long fight with President Obama in the Oval Office. “You’re jamming me, Elizabeth,” he says, exasperated. Yet she also portrays herself as a small-town gal with an aw-shucks demeanor. She vomits backstage before appearing on “The Daily Show,” and on the campaign trail walks “straight into a pole.”
Perhaps Elizabeth Warren is both of these personalities: the down-to-earth Okie and the Washington power broker with far-left views. That’s what makes her interesting, troubling and, for Hillary Clinton, a potential political threat.
Ms. Kissel is a member of the Journal’s editorial board.Copyright 2013 Dow Jones & Company, Inc. All Rights Reserved This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com