“I’m a capitalist to my bones,” Senator Elizabeth Warren this week told a New England Council audience of business leaders, adding, “We have to make markets strong so everyone can do better.”
Addressing an arcane and often dry subject, she made an impassioned pitch that good bankruptcy laws are essential to well-functioning markets. She was intent on showing she could meet the needs of big business as well as those of what she usually describes as the “hammered” middle class.
Did she pull it off? That depends on which constituency you identify with. One banking lobbyist told me, “Never let the facts get in the way of a good political rant.” He particularly noted the absence from her speech of any mention of the vast regulatory changes imposed on banks by the Dodd-Frank law. Still, the general thrust of her presentation was most compelling.
Warren is one of the nation’s leading experts on bankruptcy law, and stressed that bankruptcy has far-reaching implications even if it isn’t your own business that’s going under. All markets have winners and losers, and bankruptcy law is about protecting losers. She opposes bailouts, especially those with no strings attached. A lot of big banks, she said, believe in free markets – but not for themselves.
The goal should be preserving money to protect creditors, resolving disputes affecting all constituencies at the same time. That means owners, investors, creditors, employees, pensioners, buyers, sellers. Division of assets should be as fair as possible. Those who take the risks and reap the benefits of success should also pay the price of failure. And, finally, Warren wants an end to gaming the system by forum shopping, seeking judges in Delaware and the Southern District of New York. To that end, Warren is joining forces with former Enron-scarred Texas General and now Republican Senator John Cornyn to require such cases to be heard by the closest jurisdiction.
On a range of related issues, Warren has stood up to the banks, credit card companies, and student loan companies, the big guys with armies of lawyers and lobbyists. Warren’s expertise in financial areas combined with her passion for the underdog makes her a considerable force, which is why the Republicans love to use a caricature of her to spur donations to the GOP. Donald Trump loves to beat up on her, calling her goofy and deriding her claim to Native American ancestry from her Oklahoma family. While she rests in the Bernie Sanders wing of the party and has passionate enthusiasts who hope she’ll run for President in 2020, it’s hard to see at this time how this former Harvard professor from the 02138 zip code could garner wide support in the red state swath of the heartland, which tends to vote against their own economic interests.
Then again, I’ve been wrong before, and Warren would certainly bring vigorous and informed debate to a presidential race… if the electorate had an appetite for substance over slogans.
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