Another Reason to Like Elizabeth Warren

I stumbled across an interview with Elizabeth Warren on the Guernica magazine website today (interview by Harry Kreisler). I've written about her before, but this interview added to my appreciation of her.

First was the fact that the research that led to her book The Two-Income Trap began in a way that shows it was actually research and not just someone intent on confirming her biases:

I did my very first empirical study looking at the families who were going into bankruptcy back in the early ’80s, and I’ll tell you, I set out to prove they were all a bunch of cheaters. I was going to expose these people who were taking advantage of the rest of us by hauling off to bankruptcy and just charging off debts that they really could repay, or who’d been irresponsible in running up debts.

I did the research, and the data took me to a totally different place. These were hardworking middle-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 collapse when they filed for bankruptcy. They would never pay these debts off. Realizing this changed my vision.

Second was the detail given about her background. If I had thought about it at all, I would have assumed that Warren, a professor of law at Harvard, had come from some level of privilege -- at least middle class, or perhaps she was the child of other academics. Instead, I found out that her parents were Oklahoma dustbowl survivors who never recovered from the Great Depression, and that while she did go to college right away, she married young and had her first child soon after graduating.

She didn't start law school until several years later, had her second child right after law school graduation, and only fell into teaching because her law school alma mater, Rutgers, called her and asked if she wanted to teach a class for someone who hadn't shown up.

In the interview, she summarizes the evidence about bankruptcies that makes The Two-Income Trap so compelling to read:

Starting in about 1970 a fully employed male’s wages completely flattened out, and in fact, a fully employed male today, on average, earns about eight hundred dollars less than his dad earned a generation ago. Unlike the first seventy years of the twentieth century when wages grew as the economy grew, now the family does better only if they can put two people in the workforce. Millions of mothers poured back into the workforce...

Start with the consumption. This is what everyone in the popular media [supposes] is the reason for people getting in trouble: too many Game Boys, too many iPods, too many two hundred dollar sneakers. In fact, families today, adjusted for inflation, spend less on clothing, less on food (including eating out), less on furniture, and less on appliances than they spent a generation ago. Where they spend more is for the three-bedroom, one-bath house....

Families with children have seen a 100 percent increase in housing costs since 1983. Why? Not because families with children have a bigger need for granite countertops or spa bathrooms, but because housing is the substitute way to buy into a decent school system. This is white families, African American families, Hispanic families, Asian families, it’s across every spectrum. Families with children are tightening the belt one more notch, are working extra hours, are sending both people into the workforce, to try to get into the best possible school district for their children. Families are in financial trouble not because they’re irresponsible but because they’re too responsible. They’re trying to do it for the kids.

Check out the full interview. It's well worth the time.