Elizabeth Warren was an independent and then a registered Republican in the early 1990s. She seems to have been a bit non-political, but her research created a transformation that brought her from moderate Republican to left-wing Democrat. How’d did she get here (a good place in my view) and what led her here? It was bankruptcy law. She was a law school professor whose research field was bankruptcy law.
She went into her research expecting to find that most bankruptcies were caused by personal irresponsibility, for that was the common wisdom. But she let the data guide her, instead of guiding the data to a preconceived conclusion. And the data showed something else. Medical bills were the chief cause, and bank actions exacerbated people’s financial problems.
Warren was an independent and then a registered Republican until 1996. But the more Republicans sided with Wall Street, the less Republican she felt. She registered as a Democrat. And by the time she wrote The Two-Income Trap, she knew the policies, and she knew the players. And while whacking myths—“The Over-Consumption Myth,” “The Myth of the Immoral Debtor”—she also minced no words.
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The numbers in the book were shocking: The foreclosure rate was up 255 percent. Bankruptcy filings were up 430 percent. Credit card debt was up 570 percent. The middle class was shriveling, and it had been for a good while, and it wasn’t mainly because of reckless spending but rather drastic increases in prices of housing and health care and preschool and college. At base the book was a shift in blame. These economic straits, Warren argued, were not the fault of the people who were suffering, nor was it the moral failure of a growing share of spendthrifts. No—a deregulated credit industry preyed the most on the stressed and the strained. The game was rigged.
Politico: The Making of Elizabeth Warren, 11/30/18
Republicans and a few Democrats had been trying to make bankruptcy law more bank friendly for several years. In February 2005, Elizabeth Warren was an expert witness before a Senate Committee opposing the 2005 Bankruptcy Bill:
On a February morning in 2005 in a hearing room in the Dirksen Senate Office Building, Joe Biden confronted Elizabeth Warren over a subject they’d been feuding over for years: the country’s bankruptcy laws. Biden, then a senator from Delaware, was one of the strongest backers of a bill meant to address the skyrocketing rate at which Americans were filing for bankruptcy. Warren, at the time a Harvard law professor, had been fighting to kill the same legislation for seven years.
Politico, 3/12/19
What happened? The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was passed in April, 2005 by the U.S. Senate in a 74-25 vote.
The bill, which was signed in to law by George W. Bush two months after Biden and Warren tangled, made it harder for Americans to discharge the debts they accrue from things like credit cards and medical bills. According to one study, the law “benefited credit card companies and hurt their customers.”
Politico, 3/12/19
The Bankruptcy Bill made it more difficult to people to file for Chapter 7 bankruptcy and made it virtually impossible to discharge private student loans. See wikepedia
Senator Obama voted against it. Senator Teddy Kennedy also opposed it. Here’s part of a CSPAN video of Senator Kennedy that I cannot embed:
This legislation that we have before us cracks down unfairly on large numbers of hard-working families that are in dire financial straits because of a sudden serious illness…Yet, this bill blatantly ignores the real abuses in our bankruptcy laws: the corporate abuses that have become epidemic in recent years…Current law on corporate bankruptcy is grossly inadequate in dealing with these problems. Often, the very insiders whose misconduct brought the company down do very well in bankruptcy. The people who suffer the most are the innocent victims, the employees, the retirees.
CSPAN
In the House, Sherrod Brown, Bernie Sanders, Raul Grijalva, and Adam Schiff are names you may recognize among the 126 members who voted NO. [Jay Inslee and Nancy Pelosi also voted NO.] Most NO votes were Democrats. House Vote
The “bad blood” over this issue has continued since 2005. In March 2006, Elizabeth Warren lambasted a chief Democratic supporter of the bankruptcy bill:
In March of 2006, Warren wrote that Biden's 2005 vote in favor of the bankruptcy bill that spurred her foray into blogging made him part of "a bi-partisan coalition to prefer powerful corporation [sic] over hard-working families."
"For years, Senator Joe Biden vied with Republican Senators Charles Grassley and Oren [sic] Hatch for head cheerleader for this bill," Warren wrote. “Even as he tried to position his national image as a strong supporter of women, Senator Biden was twisting arms to get the bankruptcy bill through Congress.”
NBC News, 1/6/19
In a 2015 interview, Joe Biden accused Senator Warren of trying to punish the rich:
“It’s not about punishing the rich, which is the fundamental premise of Elizabeth — who’s smart as hell and a good person,” Biden said.
Yahoo News
I’m looking forward to the debates. I have no doubt Elizabeth Warren will continue to persist.
Elizabeth Warren is a fighting Democrat, fighting for working people. If you can afford a few dollars, please Donate to Elizabeth Warren Campaign Here.
Update I: You can see Elizabeth Warren tonight on CNN at 9 p.m. eastern time in a town hall with Jake Tapper.