Elizabeth Warren’s Two-Income Trap

NElizabeth-Warren-Sheriffew Orleans With the passage of Dodd-Frank and the advent of the coming Consumer Protection Finance Agency there was a huge hubbub from business and others opposing the appointment of Harvard Law Professor and bankruptcy expert Elizabeth Warren to run the agency.  Supposedly she was opposed by Treasury Secretary Timothy Geithner, the bank bailout Wall Street buddy-boy, which made me like her in a kneejerk sort of way:  anyone who was his enemy was surely my friend!  She had a hardscrabble personal story that started in red dirt Oklahoma with a father pushed over the financial edge, and knowing that country also biased me towards her, even though her being at Harvard stuck in my craw.  All of that is over now.  I read the book she wrote with her daughter, Amelia Tyagi, called The Two-Income Trap:  Why Middle-Class Mothers & Fathers are Going Broke, and now I’ve gotten my head together on the true facts and her core arguments, and I totally get it.  Count me as a fan!

I also get why so many were lined up against her:  first, she’s an equal-opportunity offender zinging left, right and in-between on the issues whether banks or unions, and, secondly, she’s an iconoclastic feminist arguing a totally womanist line with women and children in front, but questioning the normally unchallenged assumptions about women in the workplace.  That’s a deadly set of variables for any political calculation.  No doubt she only got this far because most people – like me! – didn’t ever bother to read the book!

Some examples:

  • She zings Citibank before the meltdown for an average mortgage interest rate of about 17% and in a tell-all story relates the tale of a one-day consulting gig she did for them about bankruptcy and families in which she argued that Citi should simply not lend to people overstretched, and a senior executive dismissed the entire argument because jacking the overextended with more products and predatory interest rates was essentially their golden goose and business model.
  • She tells a moving story of a meeting with Hilary Clinton as a former First Lady and how quickly Clinton got the importance of opposing the passage of a proposed new corporate-backed bankruptcy law and committed her support to the fight, but then once elected as a U.S. Senator from New York, turned around completely to support her new constituency on Wall Street rather than women.  She everything but says that Clinton and senior Senator Chuck Schumer were bought and paid for by campaign contributions.
  • She comes out for universal school vouchers and total school choice for good reasons perhaps, but based on the fuzziest of political and economic premises about what would really create “equity” in school offerings, all of which must have driven the teacher unions up a wall.

Generally she drives the hammer hard on the nail.

Over-consumption is roundly dismissed as the economic trigger of the debt crises, which she argues sprang directly from middle class parents trying to find two critically essential things for their children:  good schools and safety.  In the midst of a national education crises and too often random urban crime, both parents were not only forced to work, but also ended up doubling down on inflated house mortgages in the best school districts:  the two-income trap.  Unfortunately, doing so eliminated in the Warrens argument, the historic bench strength of having a reserve worker ready (the wife) that could go to work in a crisis brought on my job loss, medical bills, or family breakups.  Folks were already stretched over the line so tautly that the least twist and they were pulled under.

I can’t say how happy I was to read this book and find out that Elizabeth Warren is fellow traveler on the citizen wealth bus.  I could go on and on, but every once in a while it’s such a pleasure to go back to the first sources and find with total surprise that someone is even better than I could have imagined.

Props to President Obama for stepping up and finding a way for Warren to work in the White House and make the Consumer Financial Protection Agency happen!  The beginnings always prejudice the ends, so she’s in the right space, regardless of whether or not she can run the show.  Better to have a toe smasher than a tiptoe dancer protecting the financial futures of desperate families!

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Diplomats and Democracy Need Wikileaks: Tunisia Case Study!

Reuters+Tunisia+protesters+posters+480New Orleans As organizers we learn to accept the fact that even when our members don’t win exactly what they demanded, change often comes behind the lines of our demands, because of our active and aggressive pursuit of the issues:  a half-a-loaf cannot be won without a fight for the whole loaf.  But in the struggle for political change not every actor in the great drama of life can play the same role.  I would argue that what we are now witnessing in Tunisia is a case study of an emerging opportunity for popular change, maybe even an eventual people-driven democracy, that could not have been accomplished through diplomacy or persuasion of the contemporary powers of imperial America with our conflicted interests, but was triggered by new tools of internet transparency through the revealed cables by Wikileaks and its journalistic partners.

The State Department, Hilary Clinton, Eric Holder, and scores of others should properly continue to howl at the moon in protest at the affronts and embarrassments of Wikileaks, but they have to be celebrating the “people power” in Tunisia that was unleashed only by the release of their cables by Wikileaks and its buddies.  Lord knows they could never do this and have to suck up, lick legs, and apologize for every word of every cable, but they had better also be studying Tunisia and trying to figure out how to use the transparency tool in the future.  We need less of diplomats whispering to each other about corruption and the excesses of autocrats in fancy five star hotel barrooms and more of them figuring out how to slip the information and the solid goods of proof positive to activists with mad internet skills.

Some of the rallies were organized using Twitter and Facebook to get out the word.  That’s nice, but that’s not news.  The National Endowment for Democracy funded flash mobs and cell phone texting rallies for years all over Eastern Europe with abandon, even though in the name of leadership development or youth participation or whatever.  A filmmaker friend sent me a note about Facebook having moved to protect its users in Tunisia from discovery as the temperature heated up there in the wake of the Wikileaks revelations, which is something to LIKE!

The point is that everybody wants and might even be willing to do the right thing, if they have the facts and can move with the conviction of being morally right and therefore politically enabled.  We don’t need a George Bush set of wars for democracy, but we do need a politics and diplomacy that puts solid information in the hands of in-country organizers and activists which is even more powerful than bullets in the guns.

Nothing about the Wikileaks cables has yet shown that the State Department could find such real “freedom fighters” anymore than they could find their asses with two hands or keep their yaps shut in their messages back home to Foggy Bottom, but if they start really studying what is happening in the “Wikileaks Revolution” in Tunisia, maybe they could learn how to use some new tools, work with some different partners, and find a new way to advance the causes of democracy around the world from the bottom up for a change rather than from the top down one level, as the cables are showing over and over.

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