FRIDAY, AUGUST 13, 2010


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Elizabeth Warren: Borrowers’ best friend, banks’ worst enemy?


warren from C1


House with senior Obama ad- visers, but a presidential spokes- woman said no decision had been made. If Obama doesn’t choose her, he risks infuriating his al- ready-agitated liberal supporters who see Warren as the only log- ical candidate.


If he gives her the nod, Obama risks deepening the financial community’s distrust of his ad- ministration and sparking a con- firmation fight. He would be ele- vating a woman who, despite her mild manner, has repeatedly proven herself a thorn in the ad- ministration’s side during her tenure as watchdog over the gov- ernment’s $700 billion bank bail- out program. The real Elizabeth Warren


doesn’t so neatly fit the labels oth- ers readily attach to her.


She was the child of a cash-


strapped family on the Oklahoma plains, a teenage wife and young mother who became the only member of her immediate family to graduate from college, then went on to teach at Harvard Law School. Drawn to the field of bankruptcy, she initially took a jaundiced view of the irresponsi- ble spendthrifts she believed were gaming the system, only to dis- cover during her research a hu- manity in their stories that al- tered her life’s work. She has long maintained the bearing of a straight-shooting, “aw shucks” Washington outsider, even though she began showing her Beltway savvy as a political in- fighter more than a decade ago. So just how did Elizabeth Her- ring from Norman, Okla., become Elizabeth Warren, test case for whether Washington is really se- rious about reforming Wall Street? Hard work and happenstance.


On the move


Betsy, as her family always called her, was born in 1949. Her parents were hardscrabble Okies, forever haunted by the Dust Bowl poverty that had defined their early lives. “They hadn’t recovered from the Depression, and I guess in many ways they never did,” War- ren, who declined to be inter- viewed for this story, recalled dur- ing a 2007 interview at the Uni- versity of California at Berkeley as part of its “Conversations With History” series. “Those were the stories that permeated my child- hood — what it was like to have seven years of drought, what it was like when nobody had any money, what it was like when all your neighbors left to go to Cali- fornia or someplace where they thought there might be jobs.” Warren’s parents had lost most of their savings when a business partner in a car dealership ran off with the money. Afterward, her father worked a series of jobs around Oklahoma City, including as a carpet salesman at Mont- gomery Ward and later as a main- tenance man at an apartment complex. At one point, her moth- er took a job in the catalogue or- der department at Sears. Around the dinner table, the


conversation revolved less around politics and more around carburetors. The Herrings’ only daughter was no shrinking violet. “She was tougher than a snake, partner,” said her brother David Herring. “She’d argue with anybody.” The family eventually moved


from Norman to Oklahoma City, where Warren became a local phenom, as driven as she was in- telligent.


“She won debating awards and all this and that. She won the Bet- ty Crocker award. She won every- thing. . . . She always just achieved,” Herring said, calling his sister “probably the most te- nacious person I’ve ever known.” One brother entered the Air


Force. Another worked construc- tion. The youngest went into the oil business. Warren graduated from high school at 16 and earned a full de- bating scholarship at George Washington University. In D.C., she studied speech pathology, aiming for a teaching career working with brain-injured chil- dren. She left GWU after two years, got married at age 19 to a high school boyfriend who worked at the Johnson Space Center in Houston, finished her degree at the University of Hous- ton and had a daughter. “I had a baby and stayed home for a couple of years, and I was really casting about, thinking, ‘What am I going to do?’ ” Warren


BRENDAN SMIALOWSKI/GETTY IMAGES


“I get disgusted every time I hear her speak. It’s like she’s sitting in some ivory tower, not understanding the ramifications of


anything she says.” — Anton Schutz, president of Mendon Capital Advisors


said in the Berkeley interview. “My husband’s view of it was, ‘Stay home. . . . We’ll have more children, you’ll love this.’ And I was very restless about it.” She carried that restlessness to


New Jersey, where her husband’s work had taken them, and earned a law degree from Rutgers Uni- versity. When her husband was transferred back to Houston, Warren landed her first tenure- track post at the University of Houston and she stumbled into the cause that would define her career. Warren became intrigued by


the new bankruptcy code that took effect in 1979. She partnered with a fellow law professor, Jay Lawrence Westbrook, and sociol- ogist Teresa A. Sullivan, now the president of the University of Vir- ginia, to study the Americans who were ending up in bankruptcy court. “I set out to prove they were all


a bunch of cheaters,” Warren said in the 2007 interview. “I was go- ing to expose these people who were taking advantage of the rest of us by hauling off to bankruptcy and just charging debts that they really could repay, or who’d been irresponsible in running up debts.” The trio visited courthouses in


different parts of the country, car- rying with them a portable copy- ing machine they called R2-D2. “We’re sitting there reading


these files, entering data from hundreds of people, interviewing bankruptcy lawyers and such,” Westbrook recalled. “You have a human story that goes together with all the numbers.” What they found shook War-


ren’s assumptions. “These were hardworking mid- dle-class families who, by and large, had lost jobs, gotten sick, had family breakups, and that’s what was driving them over the edge financially. Most of them were in complete economic col- lapse when they filed for bank- ruptcy,” she said. “It changed my vision.” Warren divorced, remarried


and moved on to teaching posts at the University of Texas, the Uni-


versity of Michigan and the Uni- versity of Pennsylvania before set- tling at Harvard in 1995. All the while, she continued to dig deep- er into what she has called the hollowing out of the American middle class, writing about the ef- fects of bankruptcy on ordinary Americans and the dangers of predatory lending, warning about a collapse that was sure to come.


Another D.C. education


Warren navigated the capital’s political waters long before the current crisis.


Back in 1995, former Oklahoma Rep. Mike Synar (D), who was heading up the new National Bankruptcy Review Commission, recruited Warren to become the group’s senior adviser. Warren demurred. “I didn’t want anything to do with it. I wanted to stay in my office and fo- cus on my academic research,” she once recalled in an interview with the magazine the Progres- sive. “Mike promised that if I worked with the commission he would insulate me from any of the political parts to it. So I agreed on those terms to come work with him.”


Synar soon died of brain can-


cer, but Warren pressed on, help- ing draft the commission’s report and testifying before Congress, trying to beat back legislative ef- forts to restrict the right of con- sumers to file for bankruptcy. This was the Washington edu-


cation of Elizabeth Warren, ac- cording to Westbrook, her long- time research partner, and it soured her on Wall Street’s influ- ence. In a book she wrote with her daughter, Warren tells the story of how first lady Hillary Clinton vowed in a private meeting to help fight a bankruptcy bill pend- ing in Congress that Warren warned would dismantle vital protections for families. Presi- dent Bill Clinton subsequently vetoed the bill. But when the bankruptcy bill came back before the Senate in 2001, Sen. Hillary Rodham Clinton voted in favor. The lesson for Warren was that even a sympathetic ally could be


swayed by wealthy special inter- ests. “As New York’s newest sena- tor, however, it seems that Hillary Clinton could not afford such a principled position. . . . Big banks were now part of Senator Clin- ton’s constituency. She wanted their support, and they wanted hers,” Warren wrote. AClinton spokesperson did not respond to a request for com- ment.


By the time the financial crisis hit in 2008, Warren had studied the plight of middle-class families for decades and written exten- sively about the about the ways that lenders preyed on ordinary Americans. She had crisscrossed the country sermonizing about her findings and pitching her idea for a new consumer agency to the Democratic presidential cam- paigns, including the staffs for Clinton, Obama and John Ed- wards. “It is impossible to buy a toast-


er that has a one-in-five chance of bursting into flames and burning down your house,” she wrote in a now-famous 2007 journal article proposing such an agency. “But it is possible to refinance an exist- ing home with a mortgage that has the same one-in-five chance of putting the family out on the street.” After the economy nearly col- lapsed, Warren seemed like a prophet. Senate Majority Leader Harry M. Reid (D-Nev.) recruited her to become the lead watchdog over the government’s $700 billion bailout fund. Soon, Warren was working out of a dingy office near Union Station, holding public hearings, churning out reports that criticized the government’s handling of some aspects of the bailouts and mixing it up on TV with everyone from Charlie Rose to Jon Stewart.


‘This grubby job’


The financial overhaul bill signed last month by Obama gives him authority to appoint an independent director of the new consumer bureau to a five-year term, subject to Senate confirma- tion. That director will have broad authority to shape the new bureau and remarkable autono- my after it is up and running to write and enforce rules governing credit cards, mortgages and other such loans. The administration has floated


several candidates for the job, in- cluding Assistant Treasury Secre- tary Michael S. Barr and Eugene Kimmelman, a deputy assistant attorney general in the Justice De- partment’s Antitrust Division. But Warren has drawn the most public support — and the most ire.


She has received fervent back- ing from consumer advocates, la- bor unions, academics and scores of Democratic lawmakers. Tens of thousands of people have signed online petitions urging Obama to choose her. Her endorsements have ranged from the New York Times to MoveOn.org to Dr. Phil. Others have made no secret about their distaste for Warren, questioning her qualifications and describing her as an ideo- logue. “I get disgusted every time I hear her speak. It’s like she’s sit- ting in some ivory tower, not un- derstanding the ramifications of anything she says,” Anton Schutz, president of Mendon Capital Ad- visors, recently told Reuters — a sentiment shared by others in the financial industry, though rarely so candidly. “Any person you put in that role really ought to have some industry experience.” For her part, Warren has spent much of the summer outside of the public spotlight, declining in- terview requests and visiting fam- ily in California and Oklahoma. “I asked her point-blank, ‘Do you want this grubby job or not? Why do you want this thing?’ ” her brother David Herring said. He said it was clear that if she were to end up leading the con- sumer bureau, it would be out of a sense of duty. Warren’s daughter and co-au- thor on two books, Amelia War- ren Tyagi, agreed that her mother has little appetite for politics or public life, and only her passion for consumer issues and the ur- gency of the crisis have kept her from returning to her quiet, ten- ured life at Harvard. “This is a once-in-a-lifetime moment to do the thing she cares about most,” Tyagi said. “If she didn’t think she could make a dif- ference in Washington right now, she wouldn’t be there.” dennisb@washpost.com


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CAROLYN HAX


NICK GALIFIANAKIS FOR THE WASHINGTON POST


A bad case of envy now that her sister has it good


Hi, Carolyn: My younger sister and I are close, though we weren’t always. Recently she started dating a man that she will likely marry. Because of his position and family’s connections, she is getting to enjoy exciting, fun events that few people get to participate in. I am beginning to feel the little twinges of jealousy, not because I don’t want her doing these things but because I would love to be enjoying these things with her. I am hyper-aware of jealousy


toward her because she was chronically ill when we were young and didn’t excel as I did at school and sports. Consequently, my parents spent a lot more time and energy on her. While the jealousy that stemmed from this is long past, it destroyed our relationship for years. I would never let it get that far, but I don’t know how to turn it off. For what it’s worth, I’m pretty


satisfied in life overall, but sad that she gets to have all these exciting experiences while I work, sleep, eat, repeat. I don’t want to be this jealous person! Is there any magic to fighting off the green-eyed monster? My sister absolutely deserves the best and that includes my attitude toward her.


Sniveling sib


Given your honesty, I wish I had some magic. But what I’m proposing is anti-magic: logical thinking. Longing for something that someone else has — be it the exclusive events your sister now enjoys, or someone’s great car or house or job or mate — involves an unconscious bit of truth-doctoring. You witness something desirable, you imagine it as part of your life, and decide, yes, things would be better that way. We’re cafeteria thinkers: You’re imagining you and your life, plus her perks. But with reality, we can’t pick and choose. To have what your sister has now, you’d need to be your sister. It’s not just


about her guy and her fabu parties; you’d need to have her childhood, her illness, her overcompensating parents, everything. Good and bad. Every twist in her path brought her here.


So when you feel yourself


starting to covet something, force yourself to think bigger. Want your friend’s gorgeous house? Sure! But I hope you also want that friend’s spouse, family, job, education, politics, faith, appearance, angels, demons, everything, because that’s what your friend has. Chances are, in weighing someone you envy as a whole package deal, you’re going to hit something you don’t want — or, just something of yours you wouldn’t want to give up. Remember, if you really were Brad or Angelina, that means wiping out your loved ones, your childhood, your accomplishments, your finest hours, your first kiss, everything. You didn’t wind up in a “work, sleep, eat, repeat” pattern by accident. You made deliberate moves that took you there, going after some things and avoiding others. If, upon reflection, the reasoning behind your choices is still sound, then own it — that’s your Envy-B-Gone. And if the reasoning seems


faulty now — if you can go through every item in another’s life and still think, “Yup, rather have that” — then it’s time for a ruthless inventory of your options and attitudes, with an eye to judicious change. Even “exciting, fun events” will be hollow if your foundation is hollow, too.


Write to Tell Me About It, Style, 1150 15th St. NW, Washington, D.C. 20071, or tellme@washpost. com.


ONLINE DISCUSSION Carolyn Hax’s weekly Web


chat is at noon Fridays at www. washingtonpost.com/discussions.


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