Friday, May 08, 2009

Elizabeth Warren - American Heroine



Elizabeth Warren continues her role as American heroine speaking truth in a world and area unaccustomed to truth. Her most recent declarartions about the so-called stress tests say much about what's going on as Marvin Gay would say:

"Transcript

FARAI CHIDEYA: And now we’ve got more from Elizabeth Warren. She’s the Chairwoman of the Congressional Oversight Panel, charged with following the billions of dollars the government is giving to financial institutions through the TARP program. The oversight panel issues a report today that looks at TARP, small business lending and credit available to families with credit cards. Elizabeth, you’ve tackled the credit issue before, in part in your work as a professor and as an author. Let’s listen to a real-life example from one of our listeners. Last April we heard from Philamena from upstate New York to tell us her credit card story.

Listener Philamena on tape: I was talking to Bank of America yesterday because of a letter we received. We have over a 700 credit score. Never paid a bill partially, always in full, and they decided to halve our credit availability.

FARAI CHIDEYA: Is that something that the companies should be held accountable for, restricting credit at a time when there is so much government funding going to try to loosen credit? And we’re talking here about people who have good or decent scores.

ELIZABETH WARREN: Right. So this is the big policy question that’s on the table right now: Should a condition of receiving taxpayer support be that you use a little more customer-friendly practices?

John Hockenberry
: Because in theory they’re getting almost free money from the Feds and they can jack up these fees and interest rates on the other side. That’s a huge business, I’d like to get into that.

ELIZABETH WARREN: No kidding. And it really boosts your profits and, you know, for the companies, that works out really well. It’s a way to boost up your profits and maybe you’ll be able to pay back your government money eventually, you’ll be able to weather this crisis. But it’s also, potentially, very destabilizing to a lot of families that budgeted close to the wire, they’re making their payments, they’re doing what they’re supposed to do. You jerk up those interest rates, you cut back on the credit line, and they’re in real trouble now.

FARAI CHIDEYA: Your book The Two Income Trap was something that you did with your daughter. Which I find, particularly as a woman, I find that fascinating. What was it like to team up to do that kind of important work with your own child?

ELIZABETH WARREN: Well, you know, we were looking at all this data that I had. I had a new study out on families that had filed for bankruptcy and I’m trying to figure out what I want to do with these date and my little baby granddaughter was born. This is Amelia, my daughter’s, baby. We kept having these conversations around when she was born and finally that became the frame to the book. We don’t really frame it that way in the book, but the truth is it’s about what happened in one generation. What it meant to start a family in the early 1970s, and how it worked on income, and housing, and schools, and costs, and budgets and savings. And what it’s been like to start a family in the early 2000s. And the world has changed profoundly in that one generation snapshot, and that’s what we ended up writing the book around.

FARAI CHIDEYA: So many people thought, “OK. This is great.” We’ve had second-wave feminism that has allowed women to go to work, and women are still having kids, and the guys are still working, what’s wrong with that equation of everything being cool?

ELIZABETH WARREN: The problem is I just keep looking at this from the economics. I’m just a straight forward… I’m just a money girl. I want to see at the end of the day what’s happening. And here’s the bottom line on what’s happening: The only way over one generation that families in one generation that families are making any increase in money is by putting a second person into the workforce. That is, the wages of a man, I hate to tell you this, adjusted for inflation, median earning male makes $800 less than he used to one generation back.

JOHN HOCKENBERRY
: She was looking at me, like, I just got a pay cut here.

ELIZABETH WARREN: Just wanted you to know, $800 down.

FARAI CHIDEYA: Get those kids out working.

ELIZABETH WARREN: So the only way we can continue to get some kind of rise in family income was by putting a second income in. But the problem is core expenses outstrip that — housing, health insurance, transportation, child care and taxes, because families are paying on these two salaries. At the end of the day, today’s two-income family has less money left over after those five basic expenses than the one-income family had a generation ago.

JOHN HOCKENBERRY
: So you’ve got your headphones on there?

ELIZABETH WARREN: I’ve got them on.

JOHN HOCKENBERRY
: Listen to this sound here.

Sound of credit card machine

JOHN HOCKENBERRY
: You know what that sound is?

ELIZABETH WARREN: Yeah, I know.

JOHN HOCKENBERRY
: That’s the sound of what?

ELIZABETH WARREN: That’s the sound of those credit card processing things.

JOHN HOCKENBERRY
: Not being declined.

ELIZABETH WARREN: Not being declined.

JOHN HOCKENBERRY
: Kind of a cliff-hanger for consumers for a long, long time. But in this environment, where we’re told every day there’s a credit crunch. What if these two-income families that you describe as more in debt now than ever before, fall of the edge as a result of the changes that have taken place even in the last few months of this economy?

ELIZABETH WARREN: This is the part that’s really scary. Because when Amelia and I wrote the book, it was still boom times. In fact, a lot of people we talked with laughed at us. You know, “Aw, what do you mean about the deteriorating situation of the American family? Times are great. Party on. Party on.” We are in such a weakened state going into this recession. People are not stopping to account for this, that we’re hitting unemployment, we’re hitting rises in costs, at a time when the American family was already staggering economically. The federal government said in their mortgage mitigation program, that if any bank was going to take TARP money, they had to be willing to participate in the mortgage program to try to help with foreclosures. The question on the table is, should they do the same things on credit cards and other practices? There are a lot of folks, even within my own panel, who said no.

JOHN HOCKENBERRY
: You say yes?

ELIZABETH WARREN: I’m one of the people who says yes.

FARAI CHIDEYA: Alright, I’m going to have to leave it right there. I’ve certainly have learned a lot from you Elizabeth Warren. Thank you.

ELIZABETH WARREN: Thank you."

1 comment:

Indira said...

Cool!