Elizabeth Warren meets the 99 percent
Boston — Elizabeth Warren would be a catastrophe in the Senate, but she is hell on wheels when it comes to directing human traffic, which is no small thing at the St. Patrick’s Day breakfast in Boston. She goes bulling her way through a crowd of faces the color of 2 percent milk, sicklied o’er with the pale cast of Southie Irishness, or rendered rosy by the effects of seriously draining down a full bar that opened at eight o’clock on a Sunday morning, plowing through like she’s just graduated from a seminar in Advanced Executive Body Language, all exaggerated masculine gestures and “Yes! I am very seriously paying attention to you!” head bobs and vigorous “This is what Sincerity looks like . . . approximately!” power nods, complemented by “Move along, sir!” shoulder grips followed by quick and vigorous “Back the Hell Off” chest pats when some florid Southie denizen moves in for a hug — she is like Moses parting the kelly green sea. She is a populist in search of a people, and the wall-eyed gang shout-singing “Southie Is My Home Town” and chasing their eggs and rashers with Jameson on the rocks isn’t it. St. Patrick’s Day, as state senator Jack Hart (“Senator Hot,” in the local pronunciation) reminds the crowd, is also celebrated in Boston as Evacuation Day, and Warren looks like she is in dire need of an emergency airlift back to Cambridge.
The breakfast is a political roast, which puts Warren at a disadvantage: As with cancer and feminism, there is nothing funny about Elizabeth Warren. Once she has traversed the beshamrocked riff-raff and been seated on the dais, she fades away — hardly anybody takes notice of her. Whether this is because her fellow Democrats regard her as a fragile little thing or because they can think of nothing to say about her, almost nobody makes an Elizabeth Warren joke. Even her Republican opponent, Senator Scott Brown, barely acknowledges her, merely spitting over his shoulder, “Professor Warren, it’s good to see you. You were a little late, but I’m glad you were able to get out of Cambridge and find your way up here.”
Most of the rest of the morning’s humor isn’t so subdued. Lieutenant Governor Tim Murray, who recently honored Massachusetts’s long tradition of fishy car accidents involving Democratic nabobs by totaling a state vehicle in the very most wee hours of the morning while barreling down icy roads at 108 miles per hour — and then claiming he was just up bright-’n’-early to get a cup of coffee and inspect snowstorm damage — enters in full NASCAR regalia, bearing a tray of Starbucks. Brown made headlines by quipping that Rick Santorum’s new Secret Service detail represents “the first time he’s ever actually used protection,” and now makes a few jokes about himself and his fellow Republicans: “Mine the moon? Newt Gingrich ought to mine whatever planet Ron Paul is from.”
Elizabeth Warren doesn’t do self-deprecating — she just can’t. Her humor is of the self-aggrandizing sort: In mockery of Brown’s famous Cosmopolitan spread, she shows an image of herself as a centerfold in Consumer Reports. She opens with: “I’m the daughter of a maintenance man, who became a professor and fought against big Wall Street Banks. If that doesn’t ring a bell, you might remember me as the elitist professor from Hollywood who’s running against Scott Brown.” And then there are crickets.
The joke goes down like a Soviet airliner in no small part because she told precisely the same joke yesterday at another St. Patrick’s Day event, in front of a lot of the same people. But that isn’t the only problem: The point of the roast is to laugh at politicians, not to be reminded by politicians of how awesome said politicians are. Behind every rolled eye and polite cough that greets Warren’s foundering attempts at humor is the unspoken thought: “Yeah, we know: You grew up in modest circumstances in Muskogee or wherever and think of yourself as a consumer advocate. Super. Say something funny, you insufferable snoot.” But she does put in the work, clapping along unrhythmically like a poorly trained SeaWorld porpoise while the band plays “Whiskey in the Jar” — a song that, like most of the Southie anthems sung this morning, she plainly does not know the words to.
“Shrill.” “Hard.” “Wound-up.” These are the first three adjectives offered by a group of observers asked why Warren is having a tough time against Brown in a state in which Republicans are about as welcome as head lice. The young ladies in question are wearing Elizabeth Warren buttons.
The hard thing about being a populist? The damned people.
Elizabeth Warren is what Thomas Jefferson would have recognized as one of nature’s aristocrats, which is one of the reasons she is so manifestly uncomfortable around hoi polloi, a Democrat who does not want to be so much as downwind from the demos in the flesh. Life can be cruel to natural aristocrats, especially in politics. Also high school. She makes much — too much — of her humble background, particularly of her father’s having worked as a janitor. Brown had it pretty rough as a young man, too: His mother was none too capable a parent, he spent part of his childhood on welfare and a great deal of it surrounded by domestic violence of varying degrees of intensity, and he was sexually abused by a camp counselor when he was a child. Warren’s story is a bit more complicated than she lets on: Her father was employed as a maintenance man, and before that he had held a number of middle-class jobs, including one as a salesman at a department store. At one point, he had saved up enough money to start a promising business — a car dealership — but, as Warren tells the story, he got swindled out of his life’s savings by an unscrupulous business partner. Later, a heart attack cost him another job. Warren’s mother went to work and was bitter about it, and a few missed car payments meant that the family’s Oldsmobile, that sturdy mid-century symbol of middle-class life, was repossessed. Young Elizabeth, wracked with status anxiety, made her father drop her off a few blocks from school so that her fellow students would not see their new, less prestigious car. Her family’s story is not one of hereditary poverty and privation but one of a downwardly mobile middle-class family hit by bad luck and bad decisions.
Happily, that rough spot didn’t last forever. The Oldsmobile was gone, but by the time she was 16 years old, Warren had a car of her own, and there were two more in the family — not too shabby for Oklahoma in 1965. Her family struggled, but they were also able to buy a house in a nice neighborhood, which allowed young Elizabeth to attend an elite public school, a springboard to her later education and smashing professional success. She’s written popular books and served in government, while her endowed chair at Harvard Law pays her more than $350,000 a year. Her husband also occupies an endowed chair at Harvard Law. The two share a multi-million-dollar home in Cambridge, a multi-million-dollar investment portfolio (including a large position in notorious corporate-income-tax minimizer IBM, which recently paid an annual net effective rate of 3.8 percent), and a net worth of up to $14.5 million, according to Warren’s financial-disclosure statements. The Warrens’ net worth dwarfs that of the Browns, which is at most $2.3 million. (Yeah, pity.)
But though she is much wealthier than he, Warren and Brown resemble each other far more than they resemble most of their constituents. Each is a testament to the fact that in the brutal meritocracy that is the United States of America, smart and energetic people rise, almost unstoppably, and the increasingly high returns to individual performance mean that those at the top live lives very different from that of Joe Median. Neither Warren nor Brown attended an Ivy League university, neither had family connections or social standing. Both worked in professions that they would later abandon: Warren taught public school briefly and then quit rather than go through the obligatory, despair-inducing credentialing rigmarole (a fact that speaks better of her than almost anything else you’ll learn), and Brown was, famously, a model. Both gravitated toward the surest shortcut to wealth and security in this litigious republic — law school. Both took an interest in politics in their early years, and both have made ugly concessions to political reality: Warren may rail against Wall Street wagering and the “army of lobbyists” in Washington, but her campaign is run by a particularly grim casino lobbyist.
And therein lies the critical contrast between the two: Brown is a moderate Republican, a member of a party that believes, to the extent that it believes anything, that in a free and competitive economy, talent and drive will in most cases bring success, and Brown is a gold-plated example of the fact that this is true. Warren is a member of a party that believes, to the extent that it believes anything, that the deck is impossibly stacked against the middle class, and she is a gold-plated example of the fact that this is false. Brown’s implicit message is: “I did it, and so can you.” Warren’s implicit message is: “I did it, and you don’t have a prayer.”
Warren’s view is exaggerated to the point of falsity, but there is grain of truth in it, even if it is a truth that Warren cannot understand or will not admit.
The fact is, Warren’s career model is not available to the great majority of the middle class, to say nothing of the poor. She has written a boring little financial self-help book (heavy on phrases such as “the Lifetime of Riches investment strategy”), but her path to prosperity, if she were to document it honestly, would look like this: 1) Get born with an XXL brain; 2) become an endowed professor at Harvard with a salary in the middle six figures and another six-figure payday from speaking and consulting fees; 3) marry same. The secret to a 1 percent lifestyle is, in Warren’s case as in so many others, having a 1 percent brain. Most people are not packing the cerebral heat to do what Warren has done, no matter how much they want it, no matter how hard they work. You can rail against the iniquities of Wall Street, but there is a scarcity of college graduates who have the quantitative skills to fill even grunt-level back-office jobs in financial firms.
Warren wrote an(other) unimpressive little book, The Two-Income Trap, in which she argues that contemporary two-income families are in many ways worse off than single-income families were a generation or so ago, back during the golden years of the post-war boom, with less financial security and less disposable income. That is true: Men’s inflation-adjusted incomes peaked in 1973, and household incomes have risen in real terms since then only because so many women have entered the work force, making single-income families into two-income families. Household incomes per capita have climbed, too, but mostly because the size of households has decreased as Americans have had fewer children. (What else happened in 1973 that might in part explain decreasing household size? Discuss among yourselves.)
She and her co-author (who is also her daughter — because the 99 percent hates nepotism) cite all kinds of financial pressures on the middle class — rising child-care costs, college tuition, health-care expenses — and offer an array of policy prescriptions ranging from the mild (decoupling public-school assignments from geography) to the Swedish (subsidizing stay-at-home parents) to the authoritarian (a government-imposed freeze on college tuitions, drastic credit-market restrictions of the sort that Warren’s Consumer Financial Protection Bureau was empanelled to dream up some years later), but the two show themselves to be shockingly shallow in their analysis of the underlying economic facts: The post-war era was an extraordinary economic period, for the United States and for the world. Just as Warren’s career path does not represent much of a realistic recommendation to the individual striver, the post-war era does not offer much in the way of policy guidance to the 21st-century politician, unless we are seriously willing to entertain replicating the conditions that obtained in 1950 and thereafter, which would necessitate the rest of the world’s destroying its industrial infrastructure in a war that was pretty much the worst thing to have happened to the human race up until that point, with the United States and Canada practically alone in surviving unscathed. You don’t get the post-war boom without the war, and in any case it doesn’t last forever.
In her ceaseless hunt for a villain and in her refusal to account for the facts of economic history, Warren as an economic thinker very closely resembles another progressive lawyer, Robert Reich, and both of these lawyers seem to believe that our economic difficulties are the result of having put the wrong lawyers in charge of things, as though we could pass a law against scarcity and in favor of productivity. To a lawyer, everything is a question of law, and Warren has made her name by putting Wall Street on trial, at least rhetorically. It is precisely this kind of economic romanticism that has made her the marquee candidate of Occupy Wall Street and its economically illiterate sympathizers, and it is why she is in effect running a national campaign for a statewide office. She may laugh off jokes about her being the professor from Hollywood, but look where she goes when she needs to raise money.
But her appeal is not limited to economic illiterates. Some time back, I wrote an essay for The New Criterion in which I argued that a typical American couple making a modest income would do far better in retirement if they invested most of the money that they would have paid in Social Security taxes, putting aside 10 percent of their income with an expectation of a 7 percent return. Among those who took the time to scoff was Susan Webber (writing under her pseudonym, “Yves Smith,” of the blog Naked Capitalism), a highly regarded analyst of the U.S. financial system and a trenchant critic of Wall Street. She argued that both of my assumptions were nuttier than pecan pie: Nobody is going to invest 10 percent, and nobody is going to make 7 percent back. As late as August of 2011, Webber was arguing that Warren should run for president of these United States — as a challenger to Barack Obama, Wall Street stooge and marionette of the 1 percent. If my assumptions were the financial equivalent of unicorns exflatulating distilled sunshine, I wonder what Webber makes of Warren’s model. For my sins, I have recently digested Warren’s schlocky self-help book All Your Worth, in which she suggests that families of modest means should be saving 20 percent of their income and expecting a 12 percent return, roughly doubling down on my optimism. Webber, quelle surprise, has not addressed that proposition. The appeal of us-and-them stories is powerful.
Warren’s advice in All Your Worth is, for the most part, pretty solid — and pretty banal. It is precisely the sort of thinking you’d hear if you walked into the office of any halfway competent personal financial adviser in Poughkeepsie or Springfield: Invest in low-cost index funds, pay down your credit cards and other debt, keep a cash reserve, don’t buy a house unless you can put at least 10 percent down and preferably 20 percent, shop for better mortgage and insurance rates, don’t take out home-equity loans, etc. She’s Dave Ramsey without the wit or the evangelical fervor.
But if you’d taken her advice in 2006, when the book was published, you’d have missed the opportunity of a lifetime. In fact, you’d have been better off taking precisely the opposite of her advice. The one investment that Warren really warns her readers off from is gold, which has returned about 320 percent since her book was being written in late 2005. If you’d taken that 20 percent down payment and put it into gold, the tripling of that investment and the crash in housing prices would have probably allowed you to pay cash by now for the house you’d been thinking about buying.
Does that mean that Warren gives bad financial advice? No, it simply means that financial life is unpredictable, and that it is easy to make a compelling case for what one obviously should have done in retrospect. Unfortunately, nobody gets to invest in hindsight — not homeowners, not Wall Street, not Warren. But that lesson remains entirely lost on the lady from Cambridge, who apparently still believes that Lehman Bros. and the rest of the Wall Street kingpins filled their own books up with radioactive mortgage-backed securities because they thought they were a bad investment, rather than because they thought — wrongly — that they were a pretty good investment. (She repeated that argument as recently as November 2011 during a Morning Joe interview.) Villains must be identified and crucified, plain facts be damned. And that is really the truth that Elizabeth Warren is speaking when she says of Occupy Wall Street: “I created much of the intellectual foundation for what they do.”
Warren is everything her admirers say she is — smart, tough, principled — and almost everything her critics say — out of touch, ideological, narrow. The one inaccurate barb thrown at her is that she’s homely — “Granny Warren,” Senator Brown’s factota call her. She isn’t. If she were lined up at a party with a representative cross section of 62-year-old American women, Warren would be the one you’d ask to dance. But there is a meanness in her, a nasty little puritanical streak gone left, and her secularized Puritanism is probably the most Massachusetts thing about her. Like Hillary Clinton, she has Methodist roots and cites the Wesleyan approach as key to the development of her political thinking. (How Protestant is she? She was conspicuous in failing to cross herself when the priest at the St. Pat’s event got to the Trinitarian part of his blessing, even though the signum crucis is a common feature of Methodist worship.) It would not be inaccurate to call her political career a crusade.
The question is, Does Massachusetts want a crusader? Senator Brown has been anything but one — he’s a deal-making, favor-trading, ideology-eschewing politico about one degree removed from being the new Olympia Snowe. There is an element in Massachusetts that wants to Occupy the Senate, even though the economy of Boston is heavily reliant upon finance. But Warren isn’t about Boston, or Southie, or even Cambridge, much less Pittsfield or Monson. She is the single most important bridge between the Democratic party and the trans-Democratic Left. She doesn’t represent a place, but a state of mind.
You can take the girl out of Oklahoma and, contrary to the proverb, you can take the Oklahoma out of the girl, too, if you work at it long enough. (A notable fact about Warren is that she has never been to a class reunion.) But a scholarly study of “Charlie on the MTA” isn’t going to gain her admittance to the tribe of Jameson-sipping, milk-faced South Bostonians, either. There’s no whiskey in her jar, and for Warren, no politics is local — it’s Occupy Wall Street, Occupy the Senate, Occupy Everywhere.