Photograph by Chip Somodevilla/Getty Images
When Harry Reid summoned Elizabeth Warren to Washington in November 2008 to run the Congressional Oversight Panel monitoring the federal bank bailout program, it was as if the Oklahoma plains had risen up and found a voice. The country was reeling from economic collapse, bank bonuses were about to be paid, and Warren, a polite, politically astute Harvard University bankruptcy scholar, applied her academic skills to building an intellectual case against Wall Street. It came out like a war cry. “People are angry because they are paying for programs that haven’t been fully explained, and that have no apparent benefit for their families or the economy as a whole, but still seem to leave enough cash in the system for lavish bonuses and golf outings,” Warren complained to Treasury Secretary Timothy Geithner at a May 2009 hearing. “None of this seems fair.”
Democrats celebrated her arrival in Washington. Finally someone had come on the scene who could argue for the suffering middle class. Warren gave life to the hopes and frustrations of Obama supporters who felt burned as they watched him continue the no-consequences support of the megabanks started under his predecessor, even while foreclosures and unemployment shot up. But her bluntness made her a political liability. Obama backed away from nominating Warren to head the Consumer Financial Protection Bureau she’d created; he was fearful she couldn’t win Senate confirmation and intimidated by massive opposition from the financial industry, which loathed her.
So Warren packed up her bags, her staff, and her outrage and returned to Massachusetts, where she launched the most expensive Senate campaign of 2012, spending $42 million to defeat Scott Brown. Her defining posture might have been captured best in a 2011 campaign appearance that went viral on YouTube: “There is nobody in this country who got rich on his own. Nobody!” she told a group of supporters in Andover while jabbing her finger in the air. “You built a factory out there? Good for you. But I want to be clear: You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. … You built a factory and it turned into something terrific or a great idea, God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.” After she won, Christopher Whalen, of Carrington Holding, described her on TV as an “angry Calvinist.”
Many who tried to stop Warren may come to wish they’d let her have her way earlier. As head of the CFPB, she would have been relatively contained. As a celebrity senator with multiple committee appointments and an oversize microphone, she’s a much more formidable foe—and one bankers helped create.