Elizabeth Warren Has a Radical Plan to Beat Trump at His Own Game
@JoshuaGreen
More stories by Joshua Green
July 25
31-39 minutes
Last fall, Elizabeth Warren got an email from Klaus Schwab, founder of the World Economic Forum,
inviting her to speak at the group’s annual meeting in Davos in late
January. He was taken with Warren’s sweeping moral critique of
winner-take-all capitalism and looking to jolt the heads of state and
global financial titans at his glittering conference in the Swiss Alps.
Would she come to Davos and address them?
The Massachusetts
senator, who was then preparing to run for president, understood
immediately the attention such a showdown would bring and thought she
needed an idea big enough for the moment. A few weeks later, she settled
on one: an annual “wealth tax” of 2% on fortunes over $50 million,
slightly higher on billionaires. Working with Emmanuel Saez and Gabriel
Zucman, the eminent University of California at Berkeley economists,
Warren’s staff calculated that her tax would hit the richest 75,000
people in the U.S. while raising $2.75 trillion in a 10-year period.
Featured in Bloomberg Businessweek, July 29, 2019. Subscribe now.
Photographer: Ryan Lowry for Bloomberg BusinessweekIt
was a characteristically big, bold idea that would revolutionize how
government taxes the rich, shifting the basis from income to the much
broader category of wealth. These “ultramillionaires,” as she calls
them, would no longer pay only on what they earn, which clever
accountants can minimize, but on the entirety of what they have. This
massive infusion of revenue would fund even the most zealous package of
liberal programs with billions to spare.
But the proposal’s
principal attraction, in the moment, would be the sheer spectacle of
Warren’s unveiling it at a gathering of Davos plutocrats—one imagines
horrified gasps and a Champagne flute shattering on the floor. At a time
when U.S. politics and electoral fundraising are increasingly driven by
viral media moments, here was one guaranteed to make everyone sit up
and notice. Schwab thought so, too.
“He was going to give us all
of the CEOs in a room,” Warren told me recently, with a twinkle, over
homemade mango lemonade at her Washington condominium. Schwab even
dropped by her Senate office to lobby her personally.
But after a long period of consideration, she decided not to go.
Her presidential campaign was set to launch on New Year’s Eve with a
swing through rural Iowa, and her staff fretted about the optics of
leaving the trail to go join a gathering of bankers, even to challenge
them. As it turned out, though, Schwab’s conference still focused on
capitalist inequity and still featured a dramatic confrontation over
taxing the wealthy that instantly went viral. It just didn’t involve
Warren. Instead, Rutger Bregman, a young Dutch historian, scolded the Davos crowd
for studiously ignoring the one measure guaranteed to mitigate wealth
inequality—the very thing Warren had identified. “Taxes, taxes, taxes,”
Bregman declared. “All the rest is bullshit.” Within hours, he was
hailed as “the folk hero of Davos,” and a clip of his remarks drew
millions of views.
The missed opportunity seemed to symbolize a
candidacy that looked destined to fail. In her first weeks on the
campaign trail, Warren didn’t generate nearly the excitement or
fundraising other candidates did. The activist progressives who once
hung on her every word appeared to be shopping for someone else. And she
was dogged by her decision to take a DNA test to determine her American
Indian ancestry, which offended potential supporters and drew a fresh
wave of “Pocahontas” taunts from President Trump. Joe Biden and Bernie
Sanders led the polls and the news coverage, while Warren languished in
single digits. “I hit her too hard, too early,” Trump crowed to Fox News in March. “Now it looks like she’s finished.”
He spoke too soon. Since then, Warren has not only put
herself into the top tier of Democratic hopefuls but forced the others
to follow her lead. Although she missed her star turn at Davos, Warren
made the wealth tax
the centerpiece of her campaign. It’s part of a fusillade of proposals
that are more aggressive, far-reaching—and expensive—than any previous
Democratic front-runner would have dared venture: break up big tech companies like Google and Facebook; abolish private health insurance and give everyone Medicare; start a $2 trillion industrial policy built on “economic patriotism” to boost exports; crack down on private equity’s “Wall Street looting”; overhaul corporate governance by putting workers on boards; eliminate the filibuster; cancel student loan debt; and establish free public college and universal child care.
Together, Warren’s platform amounts to a giant leap in Democratic
ambition—some would say radicalism—that dwarfs the steady but safe
achievements of the Clinton and Obama eras.
Warren supporters at a Chicago town hall on June 28.
Photographer: Ryan Lowry for Bloomberg BusinessweekIf
Warren is a revolutionary, she sure doesn’t look the part. When I
arrived at her sleek, sunny Washington condo on a scorching July
afternoon, she was wearing a striped Vineyard Vines button-down and
tinkering with her lemonade recipe. “How ya doin’?” she greeted me. Her
husband, Bruce Mann, a Harvard Law School professor, was tapping on a
laptop and excused himself so we could get down to business.
When
the conversation turned to politics and her campaign, Warren snapped
into a whole different gear: evangelist for a Democratic revolution. Her
wealth tax and all that’s followed is her attempt to apply shock
paddles to a party that she believes has lost its way. “You could wake
somebody up in the middle of the night and ask them what a Republican
stands for, and you’d get pretty consistent answers,” Warren said. “Ask
what Democrats stand for, and it’s always a more difficult explanation.
That makes it harder to pull people into the fight, because they’re less
sure it’s their fight.”
One way to understand her urgency is as
the result of a radicalizing moment: Trump’s victory. Four years ago
there was talk of a Warren presidential campaign, but she decided not to
run, wagering that the best shot to enact her agenda was by working
through a powerful Democrat she believed could win—Hillary Clinton.
People close to her say Trump’s surprise election left her shocked and
filled with regret. “If you went back to 2014 and told Elizabeth that
Donald Trump would be elected president as a right-wing populist,” a
close adviser told me, “there’s no question she would have run for
president.”
It’s one of very few topics that leaves Warren short of words.
Sitting on her sofa, she rebuffed any attempt to get her to revisit her
thinking and what she’d have done differently. “I can’t,” she said. “I
just can’t.”
Friends say what’s driving her now is a desire to
correct that mistake and a conviction that Trump’s election showed
voters want change on a scale most Democrats don’t comprehend. She
believes Democrats lost in 2016 because they were timid. Trump ditched
Republican orthodoxies and brought along union members, blue-collar
workers, and other traditionally Democratic voters in the bargain.
Warren is making a big bet that taking Trump down requires beating him
at his own game: go big and bold or risk losing again on warmed-over
incrementalism. That’s why the sweep of her agenda aims for the New Deal
or the Great Society. “We need to fight harder for what we believe in,”
she told me.
If Trumpism is a hypertrophied version of
conservatism, then Warrenism is, by design, liberalism jacked up on
steroids. “It’s all a response to Trump,” says former Massachusetts
Representative Barney Frank, a Warren ally who’s neutral in the race.
“It’s meant to be earthshaking.”
Until now, few Democrats would
have embraced such an agenda for fear of being branded radical,
tax-and-spend liberals. For many party regulars, that remains a live
concern. House Speaker Nancy Pelosi spends much of her energy trying to
contain the progressive exuberance Warren and other Democrats to her
left have eagerly unleashed. Right now, the central strategic divide in
Democratic circles is between Pelosi’s desire not to spook voters and
jeopardize her party’s chance to beat Trump and Warren’s conviction that
they won’t show up unless Democrats aggressively reclaim their historic
mantle. Wake someone up in the dark of night during a Warren
administration, she seems to promise, and they’ll know damn well what
the Democrats stand for.
Her push for enormous changes to the structure of the U.S.
political economy is taking not only her party out of its comfort zone,
but also Warren herself. For all her provocations, she has long been a
believer in institutions who spent her career as an academic, government
regulator, and senator carefully working within those systems. Her
considerable success came because she taught herself to master the
establishment, not blow it up.
That’s changed. Her decision to
abandon the constraints and conventions of how a Democrat traditionally
runs for president has revivified a campaign many observers, not just
the president, had written off. Suddenly, she’s one of the hottest
candidates in the field.
“What I’ve seen in the last six weeks for
Warren in terms of grassroots energy is like a rocket ship taking off,”
says an independent digital strategist closely tracking the Democratic
campaigns. More than anyone else, Warren has set the terms of the race
and forced other candidates to respond as a matter of strategic
necessity. As the first primary debates
in Miami showed, Democrats’ plans for a post-Trump future are far more
sweeping than just about anybody expected them to be even a few months
ago. Kamala Harris, a supposed moderate, has endorsed “Medicare for
All,” and even Biden was compelled to produce a far more robust health-care plan than the one he helped pass as Obama’s vice president.
All
of this raises a thorny question: Is Warren prophetically right or
tragically wrong? For many Democrats, her decision to throw caution to
the wind and run on a full-dress liberal agenda of vaulting
ambition—dragging the whole party along with her—is both thrilling and
scary. It offers the promise of an historic advance and a rebuke of
Trump and all that he stands for, but couples it with the possibility
that vowing to raise taxes and eliminate private health insurance might
frighten voters into delivering the one thing Democrats fear most: four
more years of Trump.
Warren waits in the wings before the town hall.
Photographer: Ryan Lowry for Bloomberg BusinessweekMidnight
was approaching when Warren and a small entourage wandered into the
Miller Time Pub & Grill in downtown Milwaukee in mid-July. She’d
just finished a rally at a high school, then grinned and chitchatted her
way through a line of hundreds of people waiting to have their picture
taken with her. Warren does this after every event as part of an
Olympian commitment to be warm and approachable, to fend off the charge
of “chilly Harvard professor” before it can be uttered. When she arrived
at the pub, it took her several minutes and several more selfies before
she could slide into a booth, skip over the fancy craft beers, and ask
the waitress, “Do you have Miller Lite on tap?”
Like her choice of
beer, Warren’s stump speech is simple, straightforward—and very
self-aware. It’s an allegory about how government rescued her family in
hard times, then provided her opportunities to advance—opportunities it
no longer offers. When she was a middle schooler in Oklahoma, Warren’s
father had a heart attack and couldn’t work. Her parents feared losing
their home. Her mother, who’d never worked outside the home, got hired
at Sears. “That minimum wage job saved our house—and more important, it
saved our family,” Warren told the Milwaukee crowd.
After marrying
at 19 and quitting college to move to Texas, Warren finished her degree
by attending “a commuter college that cost $50 a semester.” A few years
later, as a young mother with another child on the way, she was able to
graduate from a state law school without relying on student loans, and
then was hired to teach at another one. These were the steppingstones in
a career that eventually led to Harvard, the U.S. Senate, and the
presidential campaign trail.
The purpose of this tale, besides
softening her image and establishing her populist bona fides, is to make
the case that while government once served the needs of poor and
middle-class families like her own, by providing a solid minimum wage
and affordable public schools, it now operates chiefly in the service of
those who are already well off. “When corporations get so big that they
can start to squeeze the government,” she said, “then democracy no
longer works.” Her life’s story, juxtaposed against the much direr
options a struggling family faces today, is the windup to her campaign’s
declaration of purpose, which she practically shouted across the
Milwaukee high school gymnasium: “We need big, structural change in this
country!”
Warren’s great talent as a politician is her ability to
make her left-wing economic agenda sound like plain common sense that
any ordinary person would agree with. Traveling with her through Iowa,
New Hampshire, and Wisconsin this year, it was clear she was connecting;
voters would nod along and say afterward they appreciated her diagnosis
of what ails the U.S. economy and her detailed plans to fix it.
T-shirts emblazoned with “Warren Has a Plan for That” were popular
fashion items at her events.
Her speech also offers a clue about
her professional and political success, because it’s the story of
someone perceptive and capable enough to thrive in every environment she
encountered by studying the rules and figuring out the game. One of her
least recognized attributes may be her skill at getting noticed.
Warren’s
academic career is celebrated both for its commuter-college-to-Harvard
trajectory and for her pioneering work in the field of consumer
bankruptcy law. But it’s also noteworthy that she managed to succeed in
two realms at once—the academy and the broader popular culture.
When
Warren began teaching law at the University of Texas in the early
1980s, most academic research focused on corporate bankruptcies. Seeking
to explain the spike in personal bankruptcies, Warren and her partners,
Jay Westbrook and Teresa Sullivan, spent years traveling to courthouses
studying bankruptcy filings. Their conclusion, laid out in their
influential 1989 book, As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America,
was that most bankruptcies weren’t driven by lazy profligacy, as was
commonly assumed, but by financial and medical catastrophes from which
respectable middle-class families simply couldn’t recover.
Professors
tend to be poor public salesmen of their own work. Warren is an
exception. At the same time her academic star was rising, her ability to
communicate her ideas to lay audiences won her media exposure and a
public profile that vastly extended the range of her influence. In 2003
she teamed up with her daughter, Amelia Warren Tyagi, to write The Two-Income Trap,
a book aimed at a general readership that caught the eye of Dr. Phil,
who made Warren a repeat guest on his talk show as an empathetic
financial expert and life coach.
Warren’s telegenic flair drew the notice of top Democrats, who
began calling on her to provide congressional testimony. Her clash with
Biden at a 2005 hearing over a bankruptcy bill, recently resurfaced on social media,
was an early glimpse of her talent for creating a public spectacle
around an issue that was important to her and getting the better of
whichever eminence she was pitted against. Warren spent a decade
fighting to stop the credit card industry, based in Biden’s home state
of Delaware, from winning more onerous bankruptcy rules. She ultimately
lost the fight. It was, she told me, “a big part of my early education
about power in Washington.”
Through repeated visits to Capitol
Hill, she learned how influence works—and how to work the system.
Politicians love experts who confer credibility and help them look
smart. Warren was eager to lend academic ballast to others’ ideas. When I
profiled Senator Charles Schumer in 2008, he practically dragged me to
meet her, because he believed The Two-Income Trap validated his economic program. Warren, he assured me, “knows how to get a point across.”
At
the same time, she also became a relentless popularizer of her own
ideas through channels few others were thinking about at the time. Josh
Marshall, the founder of the influential liberal blog Talking Points
Memo, was surprised when Warren offered to write about bankruptcy reform
for the site in 2005. Warren had deduced that congressional staffers
were more digitally inclined than their bosses and instrumental in
shaping their views. Blogging was a way to reach them directly, along
with the rising crowd of grassroots activists who’d become increasingly
vocal during the Iraq War. “She could see that blogs like TPM were
having a decisive effect on the evolution of Democratic politics at a
time when that wasn’t yet clear to the older generation of party
operatives and officeholders,” Marshall says.
Warren’s credibility with party leaders paid dividends when her proposal to create a Consumer Financial Protection Bureau, laid out in a 2007 journal article, was incorporated into legislation Congress passed after the global financial crisis. It also earned her a spot on the Troubled Asset Relief Program
oversight board policing the bank bailouts, a public perch she used to
stage high-profile confrontations with Tim Geithner, Obama’s Treasury
secretary, that made her a cult figure on the left—and earned her the
enmity of Wall Street allies in the administration. Her facility at
playing the inside game advanced her career even when she lost: When
Obama declined to nominate her to lead the CFPB, she was recruited to
run for a U.S. Senate seat in Massachusetts and won—landing in the very
heart of the establishment.
When she arrived in the Senate in
2013, Warren was something of an exotic creature: a celebrity whose fame
predated her run for office. But one even more prominent woman had
preceded her—Clinton—and Washington groupthink dictated that Warren
should comport herself as Clinton had. Upon her election in 2000,
Clinton somewhat ostentatiously declared that she would be “a workhorse,
not a show horse,” shunning the limelight so as not to upstage her
senior colleagues. She hunkered down and made common cause on dozens of
minor bills with Republicans, many of whom had been vocal detractors, in
an effort to burnish a bipartisan image that would help her future presidential campaign.
From
the outset, Warren recoiled at the Clinton model of the quiet,
well-mannered junior senator who was “seen but not heard” and deferred
to her male elders. Dan Geldon, a top adviser, recounted to me last fall
that before Warren agreed to run for office, she had to be persuaded
that she could be effective operating in an altogether different style.
“I need to be convinced that if I go to the Senate there’s a path to
accomplish what I want” that’s different from what Clinton did, he
recalled her saying. “How do I aggressively advocate for what I believe
in?”
Posing for selfies after the town hall.
Photographer: Ryan Lowry for Bloomberg Businessweek
In her 2014 book, A Fighting Chance,
Warren tells a story that’s meant to reveal the unsavory way Washington
power players wield their influence to benefit one another, while
ignoring the common good. She recounts how, just after the financial
crisis, Larry Summers, the director of Obama’s National Economic
Council, invited her to dinner at a fancy Washington restaurant under
the guise of imparting insider wisdom. Late in the evening,
Larry leaned back in his chair and offered me some advice...I had a
choice. I could be an insider or I could be an outsider. Outsiders can
say whatever they want. But people on the inside don’t listen to them.
Insiders, however, get lots of access and a chance to push their ideas.
People—powerful people—listen to what they have to say. But insiders
also understand one unbreakable rule: They don’t criticize other insiders. I had been warned.
Warren
presents the tale as a provincial’s education in the byways of
Washington power, assuring the reader about her disapproval of that
culture. But her own answer for how to accomplish something useful as a
new senator was to be a workhorse and a show horse. “It’s
always been about the inside and the outside,” she told me. “That’s how
I’d come to understand power in Washington.”
At her first
Banking Committee hearing, Warren seized the spotlight by demanding of a
panel of bank regulators: “When was the last time you took a Wall
Street bank to trial?” Their awkward evasions produced a showdown that
established what became Warren’s signature slashing style. Although her
staff exulted over these moments, they had a purpose beyond raising her
profile and her online fundraising hauls.
In the 12 years since
Clinton’s arrival in the Senate, American politics had polarized to such
a degree that the incentive structure for ambitious Republicans and
Democrats had changed. The old way to influence national politics was by
accumulating a lengthy record of bipartisan achievement and a
reputation for probity. The new way—Warren’s way—was to have big, loud,
messy fights that offered moral clarity and galvanized public sentiment
through cable news and social media. Warren used this technique
repeatedly to steer Democratic sentiment against corporate tax
inversions and global trade deals, such as the Trans-Pacific
Partnership, to steer it toward expanding Social Security benefits, and
to establish her primacy as the rising progressive in the Senate.
Her
adeptness won her a large and vocal grassroots following, which gave
her an independent base and remarkable power for a freshman senator.
Several of her old-school colleagues resented her fame and privately
disparaged her, but none dared do so publicly. “Democrats are afraid of
Elizabeth Warren,” Barney Frank said in 2015.
“She has an absolute veto over certain public-policy issues, because
Democrats are not going to cross her. … No Democrat wants Elizabeth
Warren being critical of him.”
At the same time, though, Warren
took care not to violate the assiduously proscribed rules of the Senate.
She was a good colleague, a willing campaigner for Democrats facing
reelection, and careful not to publicly criticize party leaders. This
won her influence inside the party and a position in leadership to match
her growing stature on the outside.
As the 2016 presidential campaign began taking shape, it was no
surprise that progressives looked to Warren as a potential challenger to
Clinton, who was distrusted by many in the party. In 2014, Warren found
herself the object of a draft campaign and a “Ready for Warren” super
PAC. Although the organizers had no formal affiliation with her, she did
little at first to tamp down the effort, which fueled speculation she
might run.
Among those anxious for a decision was the Clinton
campaign, which viewed her as a formidable foe and was relieved when she
passed. “We within the Clinton world initially thought Bernie was the
poor man’s Warren,” says Brian Fallon, a senior campaign official. “But
when she didn’t run, he had such success that he became a major figure
in his own right.”
Warren’s decision to sit out proved fateful for
two reasons: Sanders, a gadfly to this point in his career, entered the
race and caught fire. This created pressure from the left for Warren to
endorse him. More broadly, it brought into tension her hard-won status
as a progressive hero and her growing influence within the Democratic
establishment. Endorsing Sanders, her ideological ally, would mean
sacrificing her ability to influence Clinton, who was widely expected to
win. So Warren withheld her endorsement until it was clear Clinton
would be the nominee. In essence, Warren bet that she had a better
chance of enacting her liberal agenda by working through Clinton than by
banking on a Sanders revolution. Her decision shocked her hardcore
supporters on the left, many of whom turned against her when Sanders
lost.
“There was an enormous amount of ill will that was the
result of her declining to endorse anyone and deciding not to take a
position until after the convention,” says Charles Lenchner, a
co-founder of Ready for Warren, who later endorsed Sanders. “Warren had a
chance to help Bernie win when it was still possible—and she declined
to do so.”
Those close to Warren say the backlash was palpable and
unnerving. Sanders supporters flooded her Facebook posts with vitriol
and charges that she’d sold out. “The feeling on the left was that she
lacked courage,” says Cenk Uygur, co-host of The Young Turks, an influential online progressive news show, “that Bernie’s loss could be laid at her feet.”
Warren tersely defended her decision. “I thought it was the right thing to do,” she told me, without elaborating.
Her
inside strategy paid off. Warren nearly ended up in a position of power
that would have been inconceivable a few years earlier. When they got
together, Clinton and Warren had a good rapport. And Warren was a
determined campaigner for the nominee. According to campaign officials,
Clinton seriously weighed Warren as her running mate. The Massachusetts
senator underwent a full vetting and was smuggled into Whitehaven,
Clinton’s Washington home, for an interview. It went well enough that
some Clinton advisers were convinced Warren would be the best pick.
In a memo to Clinton written shortly after the August meeting and obtained by Bloomberg Businessweek,
Philippe Reines, a longtime adviser, concluded of Warren: “If a crystal
ball said she wouldn’t antagonize you for four years, it’s hard to
argue she isn’t the most helpful for the next four months to get you
elected.”
I asked Warren if she would have accepted the job if Clinton had offered it. She put down her mango lemonade.
“Yes.”
Ultimately,
of course, Clinton chose a safe, ticket-balancing male running mate.
Yet nearly everything about the campaign and plans for the transition
already underway augured well for Warren and the liberal cause.
And then Clinton lost.
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