Warren is positioning herself as a pragmatic advocate for the middle class. “I believe in markets,” she says. She simply wants to make them work better for more people.
On June 14, 2019, Shellac Kolhtkar writes on The New Yorker:
On September 20, 2016, John Stumpf, the C.E.O. of Wells Fargo, appeared before the Senate Banking Committee to defend his company’s role in one of the biggest financial scandals in recent memory. Wells Fargo employees, who were under pressure from senior management to meet overly aggressive sales targets, had opened more than two million bank and credit-card accounts for customers who had never asked for them.
The tone of the questioning was initially courteous. Then Elizabeth Warren spoke. Peering over her glasses, she launched into a series of questions so scathing that the Senate chamber fell silent. “Since this massive, years-long scam came to light, you have said repeatedly, ‘I am accountable,’ ” Warren said to Stumpf. “But what have you actually done to hold yourself accountable? Have you resigned as C.E.O. or chairman of Wells Fargo? . . . Have you returned one nickel of the millions of dollars that you were paid while this scam was going on?”
Warren pressed Stumpf on whether he had fired any senior executives over the revelations (he hadn’t); paraphrased his comments, on an earnings call, about how lucrative the sales-quota strategy had been; and asked him to tell the audience how much money he had made personally as the company’s share price shot up during the years of the fraud. When Stumpf declined to answer, Warren supplied the number: two hundred million dollars.
“A cashier who steals a handful of twenties is held accountable, but Wall Street executives almost never hold themselves accountable,” Warren said. “Not now, and not in 2008, when they crushed the worldwide economy. The only way that Wall Street will change is if executives face jail time when they preside over massive frauds.” She declared that Stumpf should be criminally investigated, accusing him of “gutless leadership.”
A video of the exchange, posted on YouTube, became a sensation. One news site called it an “epic takedown”; another described Warren “verbally destroying” Stumpf. In May, when I met Warren on the campaign trail, she told me that she was “furious” as she went into the hearing. “He was building a business model for a huge financial institution that was built on knowingly cheating people,” she said. “I figured that he deserved every punch he got.”
The episode was a pointed demonstration of Warren’s ability to tap into public anger about economic unfairness. Warren is one of the country’s foremost critics of Wall Street firms and big banks, which make much of their profit, in her view, by abusing consumers and taxpayers. It’s a perspective that has grown out of Warren’s work as an academic and has shaped her ideas as a politician, propelling her from Harvard Law School, where she was a professor specializing in bankruptcy law, to the Senate, where she has represented Massachusetts since 2013.
On many economic issues, Warren has been remarkably prescient. She has spent decades warning Americans about the pernicious effects of income inequality, predatory corporations, and consumer debt, and about the failures of our financial system—issues that are at the heart of the 2020 Presidential campaign. Now, as one of twenty-three candidates seeking to become the Democratic nominee for President, Warren is betting that the energy behind her ideas can appeal to enough swing-state voters to get her into office. At the same time, she is trying to expand her brand beyond that of a Wall Street critic. She is attempting to position herself as a pragmatic advocate for the middle class, someone who can bring systemic reforms to education, health care, and democracy itself. But, unlike the Presidential candidate Bernie Sanders, Warren doesn’t describe herself as a “democratic socialist,” and says that she isn’t trying to do away with capitalism. “I believe in markets,” she says, over and over. She says that she simply wants to make them work better for more people.
Warren, who is sixty-nine, is thin and sprightly, with bright-blue eyes and flushed cheeks. On campaign trips, she often makes three or more appearances each day, sometimes in different states. She rarely shows signs of fatigue. In March, a videographer for the gossip Web site TMZ captured Warren and three campaign staffers sprinting into Penn Station, in New York, to catch an Amtrak train. “You’re the fastest Presidential nominee I’ve ever seen!” the camera operator said, sounding breathless, as Warren streaked past wearing a small backpack, her purple jacket flapping.
I met Warren two days later, in Washington, D.C., at her apartment, a few blocks from the National Mall. The space has the spare feel of a hotel suite, with a beige couch and spotless surfaces. Warren’s husband, Bruce Mann, a law professor at Harvard, was working at the kitchen table, papers spread around him. Warren looked relaxed, dressed in sneakers, yoga pants, and a zip-up sweater. While we waited for water to boil for tea, she showed me a video on her phone of Bailey, the couple’s golden retriever, bounding through deep snow during a campaign trip to New Hampshire. Bailey, who is named for the community banker played by Jimmy Stewart in “It’s a Wonderful Life,” features prominently on Warren’s campaign stops and in her social-media feeds, where his escapades help offset the more intimidating aspects of her persona.
In person, Warren is animated and folksy. As we moved to the living room, she spotted, on her coffee table, an Op-Ed in the Times titled “The Fleecing of Millennials,” about the dim financial prospects of young Americans. “This was going to be my next project, if I hadn’t run for office,” Warren said. “I was going to write a book about generational theft.” Warren’s campaign staff is emphasizing face-to-face encounters with voters. At coffee shops, she has been meeting with people who have donated sums as small as five dollars. At large events, she has been staying as long as necessary to take pictures with anyone who wants one. (According to the campaign, she has posed for more than thirty thousand photographs; the media-intelligence firm Zignal Labs recently described her as the candidate “most associated with the term ‘selfies.’ ”) “Is she knock-it-out-of-the-park every single time? No. But she has some gifts,” one of Warren’s former campaign staffers told me. “She can make someone feel like she has heard them, and has been responsive to their questions, in a way that no other politician I’ve heard can do.”
After being portrayed as a Presidential front-runner for much of 2018, Warren launched her campaign at an especially weak moment. Republicans had created a media tempest over revelations that Warren had claimed to have Cherokee ancestry. She’d also made a principled but politically risky decision not to hold high-dollar fund-raisers or to seek contributions from wealthy donors during the primaries. The strategy had prompted her finance director to leave the campaign, after voicing concerns that she might run out of money.
Since then, Warren’s poll numbers have steadily climbed; in early June, two polls, one national and one in Nevada, had her in second, behind Joe Biden but ahead of Sanders, for the first time. With the help of advisers working from her headquarters, in Boston, Warren has been releasing a torrent of detailed policy proposals. She has issued a plan to dramatically reduce student debt and to offer free tuition at public colleges; a plan to unwind large agriculture conglomerates in order to make the market more equitable for family farms; a plan to require large corporations to pay more in federal taxes; a plan to dismantle the behemoth technology companies and regulate them like utilities; and new legislation to address opioid addiction, modelled on a bill passed by Congress in 1990 to combat the H.I.V./aids epidemic. She has announced an “Economic Patriotism” plan, intended to create opportunities for American workers, and has issued proposals targeted at Donald Trump, including one that would make it permissible to indict a sitting President.
Together, the proposals promise a new level of government intervention in almost every aspect of economic life. Some of the ideas are pragmatic; others seem aimed more at marketing than at implementation. Regardless, “I have a plan for that” has become a rallying cry for her campaign—an echo of the way that “Nevertheless, she persisted” became a tagline for Warren supporters after Mitch McConnell, the Senate Majority Leader, used it to describe Warren’s refusal to stand down during the confirmation hearing for Jeff Sessions, Trump’s former Attorney General. In May, the comedian Ashley Nicole Black wrote, on Twitter, “Do you think Elizabeth Warren has a plan to fix my love life?” Warren responded, “DM me and let’s figure this out.” Even Tucker Carlson, the right-wing Fox News host, recently opened his show with an eight-minute monologue touting Warren’s Economic Patriotism plan, saying that she sounded like “Donald Trump at his best.”
Warren has trailed Biden and Sanders in fund-raising. She faces comparisons to Hillary Clinton, and questions of “electability”—concerns that running another brainy, older white woman against Trump would be a mistake. In reality, the resemblance between Warren and Clinton is largely superficial. Warren doesn’t hesitate to show anger and frustration, relishing her reputation as someone who “knows how to fight.” The adjectives that are often affixed to women with strong opinions—“angry,” “strident”—are labels that Warren would embrace. “Gentle and soft-spoken she isn’t, on anything,” Charles Fried, one of Warren’s former colleagues at Harvard Law School and a Solicitor General in the Reagan Administration, told me. “She either doesn’t speak or it is high voltage.”
Many voters saw Clinton as flip-flopping and opportunistic; Warren comes across as straightforward. She rarely brings up breaking the “highest and hardest glass ceiling,” as Clinton often did, although she acknowledges its existence. She told me that, when she was considering running for the Senate, in 2012, people advised her against it because of her gender. In the previous election, Martha Coakley, the Massachusetts attorney general, had been beaten by an inexperienced Republican, Scott Brown. “Massachusetts is not going to elect a woman. It’s just not going to happen,” Warren was told again and again. “Every time I heard that,” she said, “I’d think, I’m definitely getting in this race.”
When I asked Warren what lessons she had drawn from Clinton’s loss, she tried to be diplomatic. “I can’t relitigate 2016,” she said. “All we can do is learn how to go forward. In 2020, it’s not going to be about Donald Trump. I know that sounds surprising, because Donald Trump gets lots and lots of attention. But we win when we talk about what’s broken, how to fix it, and how we have the power to make real change.
“You know who agrees with that, by the way?” Warren continued. “Steve Bannon. It just hit me as I was telling you this.” She paraphrased something that Bannon, the adviser who helped engineer Trump’s victory, had said in 2017: “If the Democrats are talking about what’s happening in the lives of working people—if they’re talking about the economics of America—they’re going to win.”
Warren first made this appeal in September, 2013, when she spoke at the A.F.L.-C.I.O.’s annual convention, in Los Angeles. It was one of the first important addresses that she gave after being elected to the Senate, and she was nervous. “I still remember writing this speech,” she told me, recalling that her grandchildren rode with her to the venue. “You’re in a big warehouse,” she said. “It felt like a zillion people were there.” The pitch of the speech, she told me, was “There are a lot of things as a country that we disagree on. We’re just different! And we have strongly held views that are in conflict over many issues. But on economic issues? On the question of how we build a future for ourselves and our children? Americans are surprisingly united.”
Warren had collected polling data—from people of both parties, living on the coasts as well as in the center of the country—that showed a remarkable consensus on issues such as raising the minimum wage, increasing Social Security benefits, and reducing student-loan debt. “Every core progressive economic issue was supported by somewhere between sixty and seventy-five per cent of America,” she said. “My tagline in that speech was ‘The progressive agenda is America’s agenda.’ ” She said that this realization had put her on the “runway” to her Presidential campaign. “This is not only how we win Democrats and energize Democrats,” she said. “It’s how we win independents and some Republicans.”
The Democratic candidates have many months of campaigning ahead of them. The Iowa caucuses aren’t until February, after which there will be five months before the Democratic National Convention, in Milwaukee. “There are two meat grinders you have to get through if you want to be President,” the former Warren campaign staffer told me. “You have to handle the media, the news cycle, and the background proctology examination of the primary. And if you get through that then you have to get through the Trump meat grinder, and the vast-right-wing-conspiracy meat grinder.”
In early June, two polls showed Warren in second place, behind Biden and ahead of Sanders, for the first time.
Photograph by Brian Finke for The New Yorker
When I asked Warren how she would survive all that, she said, “I know how to fight and I know how to win.” She pointed to two of her major accomplishments in Washington: the creation of a new regulatory agency, the Consumer Financial Protection Bureau, in 2010, and her Senate campaign against Scott Brown.
“After the financial crash, I knew that we needed a consumer agency to keep big banks from cheating people,” she said. “People told me two things: ‘It’s a great idea’ and ‘Don’t even try it. You can never get it passed into law. The big banks will never permit this. They’ll fight you every inch of the way.’ ”
She paused. “But we got organized. We fought for working people. We built a grassroots movement. And President Obama signed the Consumer Financial Protection Bureau into law.”
A little more than a year later, Democrats encouraged Warren to challenge Brown for his seat, despite considerable odds. “I decided that I was not going to wake up on the day after the election and he would still be my senator, voting against my values, and I would have done anything less than everything I could to stop that from happening,” she said. “And I went from down seventeen points to beating Brown by seven and a half points.
“The same will be true in 2020,” Warren went on. She leaned forward, her eyes gleaming: “People all across this country understand that government works great for the rich and powerful, and isn’t working for them. We’ll get organized. We’ll fight for working people. We’ll build a grassroots movement. And that’s how I’ll be the first woman elected President of the United States.”
In Dubuque, Iowa, in early March, a crowd of people in sweatshirts and padded coats filled the Stone Cliff Winery, an airy space with exposed-brick walls, situated near the banks of the Mississippi River. Warren hopped onto a stage wearing a crimson sweater and black pants. “Hello, Dubuque!” she shouted to an almost entirely white crowd. There were men in Carhartts, clusters of gray-haired women, and some young attendees wearing “Mt. Nasty” T-shirts, which showed the faces of Hillary Clinton, Ruth Bader Ginsburg, Warren, and Michelle Obama superimposed on Mt. Rushmore.
“This is a very dangerous time for our country,” Warren said. “The direction we go in 2020 is going to determine the America we become.” She pivoted around the stage, addressing each quadrant of the room and jabbing the air with one long, lean arm. Warren doesn’t generate the hysterical fandom that politicians like Trump and Beto O’Rourke provoke at rallies. But her performance was a reminder of how much she has changed since she first arrived in Washington. During the A.F.L.-C.I.O. speech, she seemed less sure of herself. Now she’s quick on her feet, giving the impression that she has an answer for everything. This charisma doesn’t always translate to television.
Warren usually begins events with her biography. She grew up in a series of towns in Oklahoma and had three brothers who were significantly older. “I was what used to be called a ‘late-in-life baby,’ ” Warren said on the stage, eliciting laughter. “My mama always referred to me as ‘the surpri-i-ise.’ I was about thirty before it hit me what that meant.”
All three of her brothers joined the military. One flew two hundred and eighty-eight combat missions in Vietnam; another, now in his seventies, served as a combat medic, and still carries a pocketknife in case he has to perform an emergency tracheotomy. Warren’s father had dreamed of being a pilot but ended up in various unrelated jobs, including one selling carpeting at Montgomery Ward. When Warren was in middle school, he had a heart attack. “We thought he was gonna die,” Warren said, her voice low. “He pulled through, but he couldn’t work for a long period of time.”
The medical crisis sent the family into a financial crisis. In her 2014 autobiography, “A Fighting Chance,” Warren describes the moment when she learned that her parents’ station wagon had been repossessed, and writes of accompanying her mother to look at rental houses. Warren’s father eventually went back to work, in a commission-based position selling lawnmowers and fencing. At night, when she was supposed to be asleep, Warren would listen to her parents talk. “That’s when I learned words like ‘mortgage’ and ‘foreclosure,’ ” Warren said. One morning, she walked into her parents’ bedroom and saw something spread out on the bed. It was, Warren said, “the dress.”
“Now, some of you will know ‘the dress,’ ” Warren went on. “It’s the one that only comes out for weddings, funerals, and graduations. And there it was. And my mama was in her slip and her stockings, and she was pacing back and forth. ‘We will not lose this house. We will not lose this house. We will not lose this house.’ ” Warren’s mother was fifty years old and had never worked outside the home. Eventually, she “wrestled” the dress on, along with a pair of high heels, and walked to the local Sears, Roebuck store, where she got a job answering phones. “That minimum-wage job saved our home. And it saved our family,” Warren said. “If you want to know who I am, you just heard it. ’Cause that’s the story that’s written on my heart.”
Warren has told the dress story countless times. Gradually, she says, she realized that many families had a version of the experience. “It was years later than that that I came to understand, it’s also a story about government,” Warren said. “Because when my mama walked off to the Sears and got a minimum-wage job, a minimum-wage job in America would support a family of three. It would pay a mortgage, keep the utilities on, and put food on the table. Today, a full-time minimum-wage job in America will not keep a mama and a baby out of poverty.” Her voice grew hard: “And that is why I am in this fight.”
Warren says that, as a girl, she dreamed of being a schoolteacher. “I used to line my dolls up and teach them,” she said. She wanted to go to college, but there was no money to pay for it; her mother encouraged her to find a husband. “I didn’t have the highest grades in my school,” Warren writes in “A Fighting Chance.” “I didn’t play a sport, couldn’t sing, and didn’t play a musical instrument. But I did have one talent. I could fight—not with my fists, but with my words. I was the anchor on the debate team.” At the age of sixteen, she began secretly applying to schools that had debate teams. When she got to the financial-aid forms, she realized that she needed her parents’ help. They agreed to hand over their tax returns so that she could fill in the relevant information. “I divided their income by 52 and saw how little money they earned each week,” she writes. “I knew money was tight, but were we poor?”
Warren and her husband, Bruce Mann, eating lunch before a meet and greet in Cedar Rapids, Iowa. At events, Warren generally avoids speaking about Donald Trump directly. “Our job is to make clear what our vision is and not just say, ‘Not him,’ ” she said.
Photograph by Brian Finke for The New Yorker
George Washington University offered her a scholarship, but, in her sophomore year, Warren reunited with her high-school boyfriend, Jim Warren. In campaign appearances, she describes with self-deprecating humor what followed. “At nineteen, I fell in lo-o-ove,” Warren says, with an exaggerated eye roll. She got married, gave up her scholarship, and dropped out of school so that she could move with Jim to Houston, where he had a job with I.B.M. She completed her degree at the University of Houston, where tuition cost fifty dollars a semester. (She notes that she never would have finished if she had needed huge student loans.) The couple later moved to New Jersey, where Warren taught at a public school. She says that after she got pregnant with her daughter, Amelia, she wasn’t invited back. Warren went to law school at Rutgers and graduated in 1976, when she was pregnant with her son, Alex. She soon got a job at the University of Houston.
When Warren talks about her early years as a working mother, she sounds like a comedian doing a bit. She jokes about bribing Amelia with M&M’s to get her potty trained in time to start day care, and about jiggling Alex on her hip while frying pork chops and fielding a job offer over the phone. She felt guilty about the patchwork of babysitters, neighbors, and subpar childcare centers that helped take care of her kids. “The new job was hard, and at home my world was stretched to the breaking point,” she writes in her memoir. “I felt as though I had this giant pile of duties balanced on my head as I rode a wobbly bicycle on a high wire stretched across a canyon.” Warren would have given up on her career if her aunt Bee hadn’t flown in from Oklahoma City to help out. (One of Warren’s most impassioned issues is universal childcare, which she connects directly to the economic well-being of women, especially women of color.) Warren split from her husband not long afterward.
In 1981, the University of Texas at Austin invited Warren to teach at its law school, which was considered one of the best in the country. Warren was thirty-one, and had recently married Mann, who was likewise offered a job at the school. Informed by her family’s experience, Warren was interested in teaching a course on bankruptcy law. Most academic research on bankruptcy centered on corporations, but Warren wanted to find out how it affected individuals. “When a family goes bankrupt, it is a moment of great defeat and, often, personal shame,” she writes in her memoir. In 1978, Congress had passed a major revision to the bankruptcy code; between the early eighties, when Warren began researching the subject, and the mid-eighties, the number of personal-bankruptcy filings doubled. Warren partnered with Jay Westbrook, a law professor specializing in bankruptcy, and Teresa Sullivan, a sociologist who later became the president of the University of Virginia, to investigate what was happening.
The commonly held belief was that people who filed for personal bankruptcy had been irresponsible. The debate in Washington around poverty was racially charged and highly partisan. A few years earlier, Ronald Reagan had popularized the concept of the “welfare queen,” a derogatory term for a single, often black, mother who supposedly had babies in order to collect government benefits. In 1982, the School of Management at Purdue University published a study arguing that thirty-three per cent of bankruptcy filers could have paid off their debts, reaffirming the prevailing conservative view that the system was being abused.
Westbrook told me that he, Warren, and Sullivan often talked heatedly about policy ideas but that they rarely discussed politics. Warren was for a time registered as an independent, and later as a Republican, although she has said that she thought little about party affiliation. Westbrook told me that she was “moderately conservative”—a “straightforward, Midwestern girl, a ‘You ought to pay your debts’ kind of person.”
That began to change as the team examined more than fifteen hundred bankruptcy filings. The data showed that most of the debtors had earned middle-class incomes before encountering a financial calamity, such as the loss of a breadwinner’s job, and that they often spent months trying to recover while incurring more debt. The personal stories were harrowing: “Wife died of cancer. Left $65,000 in medical bills after insurance” or “Lack of full-time work—worked five part-time jobs to meet rent, utilities, phone, food and insurance.” Westbrook told me, “I think all of us were affected when we went through the files and began to see the stories and began to talk to the lawyers and the debtors.”
In 1989, Warren, Westbrook, and Sullivan published their research in the book “As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America.” Their conclusion—that bankruptcy primarily affected people who had worked hard all their lives—became a seminal finding in the field, and the book won an award from the American Bar Association. “It blew away this myth that there were all these people who were just immoral and irresponsible, that after they left Neiman Marcus for the day they went to bankruptcy court to get rid of it,” Westbrook said. “Bankruptcy was there to help middle-class people.”
Perhaps nothing has shaped Warren more than the ten-year battle that she refers to as the “bankruptcy wars.” In 1992, Warren and Mann moved to Massachusetts, where Warren took a job at Harvard Law School. According to former students, she was a demanding and dynamic professor. Joe Kennedy III, the congressman and the grandson of Robert F. Kennedy, has spoken of being publicly humiliated by her on his first day in her class. She asked him to define a fourteenth-century legal term; when he didn’t know the answer, she said, “Mr. Kennedy, do you own a dictionary?”
Elizabeth Warren Can Win The Presidency By Empowering Every Child, Woman, And Man To Become A Productive Capital Asset Owner
Revisiting Donald Trump’s rallies and press conferences following his primary wins in 2016, he stressed that he OWNS this and that business or real estate property, and that these productive capital assets are debt-free. Of course, anyone with a sense of how businesses operate knows that this is an attribute of a successful business. Trump has not and does not use his own money savings to finance his ever-expanding business interests (the accumulation of productive, wealth-creating, income-producing capital assets), but instead uses capital credit loans, which are paid back by the earnings produced by the investments, or if not, he files for bankruptcy protection for any particular failed business venture. If his past savings are used at all it is as collateral to guarantee the bank loans, should an investment fail to produce the anticipated earnings to be used to pay off the loans. As such, in the event of failure, his assets can be confiscated. This is the logic of corporate finance, in which investments must pay for themselves — by earning profits, which are first pledged to pay off a capital credit loan, and once paid off to produce an income stream to the owner(s). This is how people in business get richer and richer and how the already wealthy capital ownership class continues to monopolize the ownership of virtually ALL FUTURE wealth-creating, income-producing capital asset expansion.
In the same 2016 election period, Hillary Clinton was increasingly advocating for companies to “profit share” with their workers. This is not actual ownership but a tax credit carrot to encourage corporations to share their profits with their workers. Of course, because the workers do not actually gain ownership of the companies that employ them under this approach, the profit sharing can be arbitrarily suspended at any time and the workers still have no legal or effective say in the management of the companies that employ them.
Neither Trump nor Clinton, or for that matter none of the present crop of presidential candidates, have EVER advocated for workers to OWN the corporations that employ them or more significantly, for every child, woman and man to be a capital OWNER in the corporations, both established and viable start-ups, that are growing our economy. As is the usual case, their focus is on JOB creation or, as in Elizabeth Warren’s case, a focus on rebuilding the middle class, which does not mean capital asset ownership creation for the vast majority of Americans. In the case of Warren, she, as with Bernie Sanders and all the other announced candidates for the presidency, she has not come to the realization that what makes the top 1 percent wealthy is because they OWN productive capital assets, the result of progress in the technologies of production.
The reality is that all government economic policies are argued or justified in the context of how many JOBS will be created or saved, completely ignoring that those who already OWN the corporations receiving tax breaks and incentives are empowered by the system to continually enrich their personal ownership of capital asset wealth.
Warren is advocating for guaranteeing workers 40 percent of seats on corporate boards of directors and requiring them to serve goals beyond profit maximization. She is also an advocate for an additional non-escapable 7 percent tax on corporations
Warren has yet to acknowledges the importance of workers owning the corporations that employ them, nor has she expressed any understanding of how an ownership concept can be extended to empower EVERY child, woman, and man to become a productive capital asset owner along with the responsible growth of the economy.
Warren should realize that the core reason the top 1 percent receives virtually ALL FUTURE income gains is because the top 1 percent are the very people that OWN America, with the bulk of the capital asset owenrship concentrated among the top .1 percent of the American population.
What Warren needs to do is to aggressively advocate for unrigging the system with reforms that will empower EVERY child, woman, and man to acquire personal ownership stakes in the FUTURE productive capital assets that will propel our economy’s growth. I am not referring to unproven small business or entrepreneurial endeavors, which, however would be significantly strengthened as the overall economy produces an expansion of “customers with money” to create demand. The primary focus needs to be on the already successful businesses growing our economy. I believe that if Warren fully embraces this policy direction, as she has underlying understanding of concentrated capital asset ownership and its corresponding political power as the cause of economic inequality, she will win the primaries and the presidency, while more effectively realizing the political revolution that is long overdue to put all Americans on the path to inclusive prosperity, inclusive opportunity, and inclusive economic justice.
Warren needs to stretch her thinking much farther, to think in terms of empowering workers to become owners of the business corporations they are employed by, using the proven financial mechanism known as the Employee Stock Ownership Plan (ESOP), which provides a pre-tax pay-back mechanism to finance worker ownership (as individuals) without ANY loss of wages or benefits or requirement of past savings, and with the newly issued stock purchase-financing paid for with the full earnings of the investments in a corporation’s growth. (See http://www.cesj.org/learn/capital-homesteading/ch-vehicles/employee-stock-ownership-plans-esops/)
But we must not limit broadening capital asset ownership to employees of corporations as there are tens of millions of Americans who do not work for a for-profit business corporations, such as workers in small businesses or government positions, or who are unemployed, under-employed or unproductive, on welfare or who are senior citizens with only meager Social Security income, which effectively reduces their life to a struggle to meet day-to-day, week-to-week, and month-to-month demands.
Instead of the OWN the FUTURE or BE OWNED issue being presented, all one hears from both sides of the political spectrum is: “We will provide JOBS and put Americans back to work and raise the minimum wage!, and redistribute the earnings of the rich.” While that sounds good, it is, in fact, terribly shortsighted. With the U.S. population continuing to climb and the rate of job-devouring automation and robotics exponentially skyrocketing, along with the job-destroying and wage-devaluation forces of globalization due to American businesses outsourcing or off-shoring their parts and finished products manufacturing, an individual’s or family’s 100 percent reliance on “JOBS” for subsistence will soon be totally outmoded. This means that your children and their children will be faced with unimaginable economic insecurity in the FUTURE, regardless of educational achievement, if the system is not reformed to empower them to become productive capital owners, and prevent those who already hoard the capital asset ownership of America from monopolizing ALL FUTURE ownership of America’s capital asset growth.
This is not to say that education, and tuition-free public colleges and universities is not an important mission, but except for a relative few, the majority of the population, no matter how well educated, will not be able to find a job that pays sufficient wages or salaries to support a family and purchase a home or prevent a lifestyle which is gradually being crippled by near poverty or poverty earnings. Thus, education is not the panacea, though it is critical for our future societal development to innovate and invent future technologies of production. Furthermore, younger, as well as older people, will increasingly find it harder and harder to secure a well-paying job — for most, their ONLY source of income — and will find themselves dependent on taxpayer-supported government welfare, open or disguised, or concealed.
Our visionary politicians would best serve us by devising plans that involve ownership of the capital asset producing corporations of the United States economy, in particular the large corporations responsible for producing the bulk of the goods, products, and services bought by Americans, without penalizing the wealthy class to do so. The Center for Economic and Social Justice (www.cesj.org) has solutions that make sense and which cross party lines quite easily. One of CESJ’s core policy proposals is to enact the Capital Homestead Act, also known as the Economic Democracy Act and adopt the Unite America Platform. This will empower EVERY child, woman and man to acquire personal ownershi[ stakes in the FUTURE capital asset wealth of the American economy, without the requirement of past savings or ANY reduction in wage earnings or benefits, using insured, interest-free capital credit, repayable with the FUTURE full earnings of the investments in the viable corporations growing the economy. (See http://www.cesj.org/learn/capital-homesteading/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-a-plan-for-getting-ownership-income-and-power-to-every-citizen/, http://www.cesj.org/learn/capital-homesteading/capital-homestead-act-summary/ and http://www.cesj.org/learn/capital-homesteading/ch-vehicles/). Also see the Unite America Platform, published by The Huffington Post at http://www.huffingtonpost.com/gary-reber/platform-of-the-unite-ame_b_5474077.html.
These proposals clearly demonstrate that most people are wrong to take for granted that the only way to finance new capital asset formation (not risky investment in already-owned stock speculation) — and thus widespread capital asset ownership and control — is through cutting consumption and accumulating money savings, thus assuring that ONLY the already rich can afford to finance new capital formation, and as a result the richer they will get. “Past savings” are by definition, the virtual monopoly of the rich. The solution is saving in the future to finance new capital asset formation now. In other words, we need to switch from financing with money withheld from consumption in the past, to financing with the present value of what is reasonably expected to produce in the future. That way, nothing is taken out of anyone’s pocket now, and anybody who comes up with a financially feasible project should be able to get financing for it.
We don’t need the rich to finance new capital formation. To finance new productive capital using “future savings,” it is only necessary to have a feasible capital project ready to start building. The present value of the project can be put into contract form (a “bill of exchange”) and either used directly as money to finance the new capital formation, or taken to a commercial bank and discounted, using newly created bank promissory notes as new money in the form of demand deposits (“checking accounts”). To make things less risky and ensure a uniform, stable, and elastic asset-backed reserve currency, the Federal Reserve Bank would rediscount such qualified paper, with the central bank’s promissory notes substituted for or backing the commercial bank’s promissory notes.
In other words, all that is necessary to finance new capital formation without the rich is feasible capital projects that can pay for themselves out of their own future earnings, and a banking system to provide media of exchange that are recognized as uniform and stable. Significantly, if new capital asset formation can be financed without using past savings, that means the rich are not needed in order to become an owner of productive capital…and that means that every child, woman, and man — regardless whether she, he, or it has savings now — can use “future savings” to become an owner without taking anything away from “the rich” or penalizing success, while at the same time becoming good “customers with money” to create demand for the responsible and “green” growth of the economy.
Using this method of finance is preferable to form new capital assets using the present value of the anticipated future stream of income and wealth embodied in a “bill of exchange” contract. Present value can be turned into “money” by contract, and this contract can be used to purchase new productive capital that repays its purchase price — “self-liquidating.” This will enable corporations with “feasible capital projects” (meaning they pay for themselves out of their own profits) to grow without having to retain earnings — instead, earnings can be fully paid out to the people to whom they belong: the shareholders. The new capital wealth creation, represented by new issues of stock (directly tied to ownership and control sharing) can be financed to benefit anyone (whether employed or not) without first having saved. This should be an equal opportunity right to interest-free capital credit.
The role of capital credit insurance facilitated with private insurance or a government reinsurance agency (ala the Federal Housing Administration concept) would serve as the replacement for past savings collateral to protect the commercial bank in the event of a failure of the capital project to produce the expected FUTURE earnings that would be used to pay off the capital credit loan. Thus, national capital credit insurance would replace the requirement for pledged security, allowing employees and non-employees (EVERY citizen within the system) to become new capital asset owners simultaneously with the growth of the economy, while eliminating the sole ownership of America by the few.
To win the presidency, Elizabeth Warren needs to advocate for the enactment of this proposed legislation that will effectively empower EVERY citizen to become a productive capital OWNER without the requirement of past savings or ANY reduction in wage earnings or benefits.
If our politicians would, for a moment, bury their hatchets and open their minds and examine the ideas outlined by the CESJ, the voters in our country would be getting far more than just jobs and increased minimum wages, or falling into dependency on the State and whatever elites control the coercive powers of government for their economic well-being, and benefit from a long-term policy direction that will provide economic security to EVERY citizen and their heirs, as we build a FUTURE environmentally responsible economy that can support general affluence for EVERY child, woman, and man.
For a more in-depth presentation of solutions see “Economic Democracy And Binary Economics: Solutions For A Troubled Nation and Economy” at http://www.foreconomicjustice.org/?p=11.
