Elizabeth Warren on Corporations
Massachusetts Senator; head of CFPB
When Roosevelt said we could do better, he reined in the big banks and giant corporations in ways that had never been done before. Government became a more active participant in keeping markets honest. Over time, we built economic stability and growth. In the 1980s, Reagan turned that around. He declared that government was the enemy and began unraveling the regulatory net, and he led the country down a path that ultimately resulted in the greatest economic crash since the Great Depression.
Trickle-down is a lie. But 37 years after Reagan's election, it's the lie that won't die. Donald Trump has clearly embraced Reagan's voodoo economics. Trump clearly believes that he can ignore all the analysis that showed that trickle-down economics was pure fiction. Why? Because Trump knows in his golden gut that once the tax cuts kick in, the economy will grow so fast that the new tax revenues will more than make up for the money lost from tax cuts. There it is, the same old trickle-down lie.
I'd laugh, except this is deadly serious. If we don't put a stop to this nonsense, trickle-down economics will eventually wipe out our middle class. It will complete the job of turning America into a country that works for a narrow slice of economic royalty at the top while the peasants live on the crumbs carelessly tossed off the banquet table
Think about it: just a few years after a major crash, bank lobbyists wrote a provision that blasted a hole in a crucial financial regulation. Then the banks muscled it through Congress.
WARREN: I've made it clear--I've been working on for the last 25 years--that I'm worried a lot about power in the financial services industry. And I'm worried about the fact that basically starting in the '80s, you know, the cops were taken off the beat in financial services, these guys were allowed to just paint a bull's eye on the backsides of American families. They loaded up on risk. They crashed the economy. They got bailed out. And what bothers me now is they still strut around Washington. They block regulations that they don't want. They roll over agencies whenever they can.
Q: Did they roll over Hillary Clinton?
WARREN: Well, they break the law, and still don't end up being held accountable for it, and going to jail.
In fact, the price of Too Big to Fail is still weighing on our economy. Concentration in the banking industry was one of the principle problems cited at the time TARP [the bank bailout] was passed, and yet, the largest financial institutions are now 30% LARGER than they were before the financial crisis and the 5 biggest banks now hold more than half of all banking assets in the US. This is based on our calculation of assets for the top 4 banks, which grew from a combined $6 trillion to $7.8 trillion between 2007 and 2013. Similarly, one report in 2012 showed that the top 5 banks are about twice as large as they had been a decade earlier relative to the economy.
All 3 of us knew what this photo shoot was really about: it was an opportunity to deliver a message to a lot of people about why Wall Street needed to be held to a higher standard of accountability. And what I suspect each of us felt that the cover story raised a question we'd all thought about, even if we didn't dwell on it: Given that women were so conspicuously absent from the ranks of top executives in high finance, how was it that 3 women had ended up in leadership positions when it came time for the badly needed cleanup?
So what is it about finance that makes women so scarce in the corner offices? And why indeed were 3 women now the sheriffs of Wall Street? I do have a thought about why I had ended up in this position: I was an outsider.
I was surprised when a "Daily Beast" headline blared, "Warren Takes Credit for Occupy Wall Street." Why on earth would I have said that? When asked about the activists involved in Occupy Wall Street, I'd said that I understood their frustration but I had no connection to the protests.
[But I checked my] recording of the interview: the sentence was there. Incredibly, I'd said: "I created much of the intellectual foundation for what they [Occupy Wall Street] do." I was trying to say that I'd worked on these issues for a long time and felt really angry about what the banks had done to families. But the quote didn't come out that way at all.
I was deeply embarrassed. My words sounded so puffy and self-important, and they made it seem as if I were trying to take credit for a protest I wasn't even a part of.
"No, Governor Romney, corporations are not people. People have hearts, they have kids, they get jobs, they get sick, they love, and they die. And that matters. That matter because we don't run this country for corporations, we run it for people.
"People feel the system is rigged against them. And here's the painful part. They're right. The system is rigged. Look around. Oil companies guzzle down billions in subsidies. Wall Street CEOs--the same ones who wrecked our economy and destroyed millions of jobs--still strut around Congress, no shame, demanding favors, and acting like we should thank them.
"Middle class families, people who run small businesses and struggle to meet payroll, people who worry about having enough money to make it to the end of the month. These folks don't resent that someone else makes more money. We're Americans. We celebrate success. We just don't want the game to be rigged."
After I left the case, a lower court held that the insurance company didn't need to pay as much money as it had offered, and the case was again appealed.
Factcheck.org stated: "Warren's version of the case has been publicly backed by several attorneys representing the asbestos victims, as well as leaders of an asbestos workers' union. `[Brown is flat out misrepresenting the facts,' Francis C. Boudrow, business manager for the International Association of Heat and Frost Insulators and Asbestos Workers Union, Local No. 6 told the "Boston Globe." `It's offensive to all these people who've lost lives' to asbestos-related illness, he said."
The Globe's conclusion after an extensive examination: Warren was paid $212,000 by Travelers from 2008 to 2010. Warren helped Travelers win a case that gave the company immunity from most asbestos lawsuits, and a $500 million trust fund has not been paid out because of a court order that Travelers won after Warren's work on the case ended.
But at the time, most asbestos victims were actually on Warren's side of the issue. She was fighting, she says, to unlock the $500 million trust, which Travelers said at the time it was willing to pay out in order to gain immunity and settle all the outstanding claims.
Anyone here have a problem with that? Well I do.
The reality she found, however, traveling from one courthouse to the next, was altogether different from the one she'd expected, and far more complex: the filings came overwhelmingly from working people who had suffered mishaps and bad luck--illnesses, deaths of family members and spouses, divorces, and economic downdrafts that often swallowed communities whole.
We need a 21st century manufacturing base and expanded service capacity. We need a set of workable rules that don't tangle up those trying to create something new. We need to be able to invent things, make things, and sell things to the rest of the world. We did that once, and we can do it again.
A crackdown on credit cards was one of the president's early and almost entirely unnoticed victories. In May he signed sweeping legislation that limited fees, required disclosure of rate hikes before they were imposed, and ended the industry's practice of preying on college student before they were 21. But Congress erred badly in not making it effective immediately, which meant that Americans saw unconscionably higher interest rates on their credit card until 2010.
Excerpts from Letter from 35 Senators to the CFPB: We write to commend the Consumer Financial Protection Bureau (CFPB) for its proposed rule to limit the use of mandatory, pre-dispute ("forced") arbitration clauses in consumer financial product and service contracts. Every day, Americans across the country are forced to sign away their constitutional right to access the courts as a condition of purchasing common products and services like credit cards, checking accounts, and private student loans. Binding arbitration is a privatized justice system that studies show consistently produces results that favor large corporations and offers no meaningful appeals process. As a result, consumers are left without redress, and companies are unaccountable for their unscrupulous behavior.
Opposing freedom argument: (Cato Institute, "ATLA monopoly," May 2002): The trial lawyers new goal is to tighten their monopoly grip on the court system, and prevent the rest of us from choosing a more efficient means of resolving our disputes. Arbitration is simply private court. Lawyers with a vested interest in a monopoly court system are trying to stop the arbitration business from developing. But there's nothing forced or mandatory about it. Contracts are the result of choice. People should be free to choose for themselves what contracts to make and what rights to give up.
Opposing economic argument: (Heritage Foundation, "The Unfair Attack on Arbitration," July 17, 2013): Any study by the Consumer Financial Protection Bureau should examine whether a limit on arbitration would:
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