Elizabeth Warren on the Shaking Down of the Middle Class

Below is a YouTube clip featuring Elizabeth Warren, the chair of Congress’ oversight panel of TARP (the Troubled Asset relief Program), the bailout started by Hank Paulson and passed by Congress. In it she talks about her fears regarding the lack of real regulatory reform in the world of finance and how this is setting up the destruction of the middle class in America.

Her argument about the shaking down of the middle class is the same one I made in the post about greed. She has long been a champion of the middle class. I recommend the compelling book she wrote with her daughter called “The Two Income Trap,” which gets at the heart of why middle class families have become so indebted in the United States.

I don’t think Warren is out to score political points (at least not against the Obama Administration as she is a Democrat). But, she is not convinced the Administration is committed to reform and has decided to speak out to help encourage a greater will to reform. To be fair, I should point out that progress on this front was made Thursday in OTC derivatives. And Larry Summers has been waxing prosaically about the middle class as well. But, her depiction of earlier conversations with Tim Geithner are telling in regards to her worries (H/T Zero Hedge).

Comments

[Michael Clark]

Good for her. Obama missed his chance. He can still turn it around, by not re-appointing Bernanke, by appointing someone like Simon Johnson as the new Fed chair...but time is running out.

2009 Oct 16 04:20 AM

[Leftfield]

Anyone with a couple of brain cells to rub together could see this freight train coming at us: TARP money was handed out like party favors on Wall St. by our "representatives" and no one knows what happened to it. It was paired with other backstops and guarantees totaling at least 10 $trillion.
Elizabeth Warren is rare in Washington for speaking out forthrightly for the middle class. With that size of wealth transfer coming after decades of middle class decline, all signs are that mere voters can always be hoodwinked and rolled for anything Washington and Wall St. deem important. This is accelerating down a dark hole where an America that was a land of opportunity may never emerge again.

2009 Oct 16 06:05 AM

[Dialectical Materialist]

From the Amazon link: She states that middle class bankruptcies and foreclosure notices have gone up dramatically... and this was in 2003. Some people obviously saw the writing on the wall.

2009 Oct 16 10:58 AM

[notsosmart]

the dumb-dumb sheeples deserve the fleecing they got & will keep getting.most of the so called middle class are a joke.they treated the roof over their head as a atm machine.they think for some unknown reason that they deserve a vacation every year on borrowed money.my house paid off in 20yrs(30yr mortgage.)my cars(one 18yrs,other 11yrs)paid in cash.never a home equity loan.credit cards paid in full all the time.saved thousands in fees & interest.they reelect the same fools to congress for the most part & then rate them @ app 20%.a lot will have to eat their granite counters.the rich dont care.they have the good life.the wall st ponzi/casino game goes on.keep filling the stadiums dumb dumbs as the romans filled the coliseum.

2009 Oct 16 05:25 PM

[Value Added]

I share Elizabeth Warren's fears about the destruction of the middle class. However, I don't feel that a lack of regulatory reform ranks in the top three contributors to that destruction. In order, I believe the middle class is disappearing due to 1) the offshoring of manufacturing, and all the skilled and professional occupations related thereto; 2) increasingly heavy tax burdens on the middle class; and 3) government regulation and legislated burdens on small businesses. Compared to those three, reforming Wall Street doesn't begin to rank.

The above notwithstanding, however, I am in hearty agreement with Ms. Warren's efforts to bring about regulatory reform. It's desperately needed to prevent destructive bubbles in our economy, which are destructive to all income brackets.

2009 Oct 17 07:54 PM