Elizabeth Warren: Not Ready for Presidential Prime Time

Sorry, lefty pundits. You got this one wrong.

WASHINGTON, DC - JULY 11: U.S. Sen. Elizabeth Warren (D-MA) questions witnesses during a Senate Banking, Housing and Urban Affairs Committee hearing on 'Mitigating Systemic Risk Through Wall Street Reforms,' on Capitol Hill, July 11, 2013 in Washington, DC. The committee heard from the panel about the progress being made on reform provisions that improve financial stability. (Photo by Drew Angerer/Getty Images)
National Journal
Michael Hirsh
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Michael Hirsh
Nov. 14, 2013, 7:52 a.m.

Gutsy, smart, and hy­per-ar­tic­u­late, Eliza­beth War­ren is quickly be­com­ing the voice of pro­gressiv­ism in Wash­ing­ton. Along with de­part­ing reg­u­lat­or Gary Gensler, War­ren prob­ably did more than any­one in Wash­ing­ton to bulk up Dodd-Frank from its rather flimsy be­gin­nings and turn it in­to a fin­an­cial-re­form law with some weight. She also speaks out elo­quently for the be­lea­guered middle class and on the deep­er prob­lem of in­come in­equal­ity.

But the idea that some­how this grow­ing repu­ta­tion trans­lates in­to a com­pet­it­ive bid for the 2016 pres­id­en­tial nom­in­a­tion — The New Re­pub­lic re­cently sug­ges­ted on its cov­er that War­ren rep­res­ents the “soul” of the Demo­crat­ic Party more than Hil­lary Clin­ton — is pretty over the top.

Here’s why. As im­press­ive and quot­able as she is as a sen­at­or — “I’m really con­cerned ‘too big to fail’ has be­come ‘too big for tri­al,’ ” War­ren mem­or­ably de­clared at her very first Bank­ing Com­mit­tee hear­ing — she is ba­sic­ally a one-is­sue polit­ic­al fig­ure. And that doesn’t get you in­to the White House in this era. (OK, fine, Barack Obama first came to na­tion­al at­ten­tion by de­clar­ing Ir­aq a “dumb” war, but more on that later.) War­ren’s pun­d­ito­crat­ic boost­ers, like Jonath­an Chait of New York magazine, have tried to com­pensate for her one-is­sue­ness by sug­gest­ing that the is­sue that War­ren be­came fam­ous for is still, as Chait put it, “the most po­tent, un­tapped is­sue in Amer­ic­an polit­ics.” 

And what might Chait be talk­ing about? Get ready: fin­an­cial re­form. That’s right. An is­sue al­most no one talks about any­more and far few­er people un­der­stand. I ought to know be­cause I’ve spent tens of thou­sands of words try­ing to get people to talk about it since I pub­lished a 2010 book called Cap­it­al Of­fense: How Wash­ing­ton’s Wise Men Turned Amer­ica’s Fu­ture Over to Wall Street. I fully agree that Obama failed miser­ably to ex­ploit a po­ten­tial pop­u­list is­sue that, once upon a time, might have made him the second com­ing of FDR. “Sur­veys show that both Left and Right, lib­er­als and con­ser­vat­ives, were united in want­ing to see fun­da­ment­al change to Wall Street and big fin­ance,” I wrote in 2011. “Yet rather than seiz­ing the chance at the kind of lead­er­ship that might have uni­fied a good part of the coun­try, Obama threw him­self in­to an is­sue that di­vided Left and Right as nev­er be­fore, and which was not dir­ectly re­lated to the his­tor­ic crisis at hand — health care.”

But that mo­ment has long passed. War­ren has con­sist­ently been a power­ful, pos­it­ive voice on fin­an­cial re­form, and it got her the party nom­in­a­tion in Mas­sachu­setts. But that’s Mas­sachu­setts. A Har­vard Law pro­fess­or who be­came an ex­pert in mort­gage fraud and bank­ruptcy and later con­ceived of one of Dodd-Frank’s most sig­ni­fic­ant re­forms, the Con­sumer Fin­an­cial Pro­tec­tion Bur­eau, she’s nev­er done much of any­thing else in pub­lic life, oth­er than chair the TARP over­sight com­mit­tee. And her “is­sue” has faded in pop­u­lar ima­gin­a­tion. Re­mem­ber the Oc­cupy Wall Street move­ment? You’re for­giv­en if you don’t. It petered out without a trace (while the tea-party move­ment doesn’t seem to go away, demon­strat­ing that you can have a suc­cess­ful move­ment these days; OWS just wasn’t it).

And with each passing year the caus­al con­nec­tion between Wall Street’s un­pro­sec­uted per­pet­rat­ors and the ter­rible re­ces­sion and na­tion­al PTSD they set in mo­tion has grown more dis­tant, drain­ing the is­sue of its pop­u­list po­ten­tial. In 2012 when Mitt Rom­ney prom­ised, and then failed, to pro­pose an al­tern­at­ive to Dodd-Frank, al­most no one cared. Polls con­sist­ently show that while the U.S. pub­lic is still mainly con­cerned about the eco­nomy (al­though the num­bers have been stead­ily fall­ing), Wall Street is way down the list, be­hind health care, im­mig­ra­tion, edu­ca­tion, guns, and a host of so­cial is­sues. By the time the 2016 race rolls around, nearly eight years will have passed since the fin­an­cial crisis.  

But that’s not even the main point. Chait finds it “odd” that fin­an­cial re­form hasn’t be­come a big­ger is­sue des­pite sur­veys show­ing that large num­bers of people are still angry about Wall Street (when they’re asked about it: big dif­fer­ence). Here’s why: It’s booorrring. And in­cred­ibly eso­ter­ic. Yes, the banks are huger than ever and over-the-counter de­riv­at­ives are be­ing traded again in the hun­dreds of tril­lions — one reas­on why Gensler, the out­go­ing head of the Com­mod­ity Fu­tures Trad­ing Com­mis­sion, may be one of the great un­sung her­oes in Wash­ing­ton thanks to his lonely fight to reg­u­late de­riv­at­ives in­ter­na­tion­ally. But only a hand­ful of people in the en­tire world truly un­der­stand de­riv­at­ives reg­u­la­tion. “Bash the Bankers” works as a slo­gan, but when you get down to what really must be done about them you would have to talk about cap­it­al and li­quid­ity ra­tios on the stump.

“Too big to fail?” Again, it’s a vi­tal is­sue. But it comes down to the scin­til­lat­ing de­bate over wheth­er “res­ol­u­tion au­thor­ity” will really work to li­quid­ate (rather than bail out) a bank in trouble, or wheth­er, as pro­gress­ive Fed­er­al Re­serve Gov. Dan Tarullo has ar­gued, “a set of com­ple­ment­ary policy meas­ures” is needed to go with Dodd-Frank that would lim­it banks’ sources of short-term fund­ing.

Nev­er heard of Dan Tarullo? That’s my point.

OK, though, let’s say for the sake of ar­gu­ment that the is­sue does play. Re­call that Hil­lary en­tirely sat out the Dodd-Frank de­bate, and with good reas­on: She was sec­ret­ary of State. She can ba­sic­ally write her own plat­form, make it as pro­gress­ive as she wants, without wor­ry­ing much about bag­gage. If War­ren gets the big cheers at AFL-CIO ral­lies, Hil­lary can move left in a way she could nev­er do on Ir­aq, where Obama eas­ily out­flanked her on an is­sue that had be­come truly tox­ic by the time 2008 rolled around and her vote for the Ir­aq War res­ol­u­tion looked very un­pres­id­en­tial. I mean, if even Larry Sum­mers, the Great De­reg­u­lat­or, can re­in­vent him­self as a cham­pi­on of the middle class, Hil­lary Clin­ton can make a bet­ter case. Re­mem­ber, she was push­ing Hil­lary­care on the na­tion­al agenda back when War­ren was still teach­ing in ob­scur­ity in Cam­bridge, Mass. Oth­er po­ten­tial Demo­crat­ic big names, like Gov­ernors An­drew Cuomo and Mar­tin O’Mal­ley, are also pretty cre­den­tialed up.  

And now let’s get to the heart of the ques­tion: What is the soul of the Demo­crat­ic Party? Is it really that left­ward and pro­gress­ive, or is that simply an agenda that old war­ri­ors like John Lewis talk about with nos­tal­gia? The last two Demo­crat­ic pres­id­ents both had pop­u­list in­clin­a­tions but went straight to the cen­ter in or­der to win two terms. For both Bill Clin­ton and Barack Obama, that ap­par­ently also meant go­ing easy on Wall Street. And Bill Clin­ton, at least, later pub­licly ex­pressed re­gret for per­mit­ting the Alan Green­span­iz­a­tion of his views on fin­an­cial re­form. No doubt his wife has taken that par­tic­u­lar les­son on board.

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