The video, below, comes from a 2004 Bill Moyers interview with then Harvard professor Elizabeth Warren. The two were discussing efforts by Wall Street lenders to pressure lawmakers into passing stringent laws making it more difficult for individuals to file bankruptcy. In the course of the interview, Warren told a story contrasting how First Lady Hillary Clinton addressed the issue, versus the approach of Clinton – the U.S. Senator.
Before becoming the U.S. Senator for Massachusetts, Elizabeth Warren sat down with Bill Moyers to talk about bankruptcy and how it related to “the problem of excessive borrowing by Americans” and how “‘beholden’ legislators may not always have their interests in mind.”
During the interview, Warren told a story about an encounter with then First Lady Hillary Clinton, contrasting it with a story about Clinton the Senator for New York. The story serves as an interesting illustration of the dynamics of operating in the White House versus the dynamics of serving in the Senate – essentially the difference between working for the executive branch versus the legislative.
In short, Warren was asked by First Lady Clinton to educate her on the intricacies of bankruptcy and how changes in the current law might adversely impact families – women and children in particular. Operating from the White House, Hillary Clinton put her influence to work supporting families over the interests of Wall Street lenders. However, as Warren tells it, when Clinton was facing the same quandary as a U.S. Senator, the pressures from Wall Street were more pressing and she ended up reversing her earlier position.
Speaking directly to the change in Hillary Clinton’s shift on bankruptcy, Warren explained that “as Senator Clinton, the pressures are very different,” adding that “you know a lot of people don’t realize that the industry that gave the most money to Washington over the past few years was not the oil industry, was not pharmaceuticals. It was consumer credit products. Those are the people. The credit card companies have been giving money, and they have influence.”
Warren goes on to explain that although Hillary Clinton had taken money from those groups, “more to the point, she worries about them as a constituency.”
Asked by Moyers about what this kind of pressure means for the millions of people whose interests are set aside and what it says about “politics today,” Warren responded that: “this is the scary part about democracy today,” adding, “we’re talking again about the impact of money.”
The interview was hosted on PBS’s NOW in 2004 and at the time, Warren was a Harvard Law School professor specializing in bankruptcy law.
You can watch the relevant portion of the interview, below, followed by a transcript and discussion of the main passages.
Moyers started the segment by giving a little background before introducing Warren:
For me it was summed up in a five-word sentence in The New York Times, “Family finances are being stretched.” The story goes on to chronicle a prolonged borrowing spree in America: families piling on debt to buy homes, charging new computers to their credit cards and driving new cars bought on dealer credit, and renovating their houses with home equity loans. The result is a doubling of household debt since 1990.
Political candidates take note — we’re not making this up — there’s an invisible crisis building out there. By the end of this decade, says a new book, nearly one of every seven families in America with children may have declared itself flat broke. This year alone, more people will end up bankrupt than will suffer a heart attack. And more people will file for bankruptcy than will graduate from college.
Holding up a copy of a recent book by Warren, Moyers continued:
This is the book I mentioned, The Two Income-Trap: Why Middle-Class Mothers and Fathers Are Going Broke.1 Elizabeth Warren is one of the co-authors. She’s a leading expert on bankruptcy, debt, and the middle class. Cited five years ago as one of the fifty most influential women lawyers in America, she teaches at Harvard Law School.
During the course of the interview, Warren recounted a story about meeting then First Lady Hillary Clinton regarding bankruptcy:
BILL MOYERS: You tell a story that to me illustrates what has happened to our political system in regards to the middle class, in regards to democracy in the country as a whole. And it involves Hillary Clinton.
ELIZABETH WARREN: I had written an op-ed about a piece of pending bankruptcy legislation. The credit card companies have been pushing to try to tighten the bankruptcy laws, sort of like locking the doors to the hospitals and then claiming nobody’s sick in America.
So, they were trying to get the bankruptcy laws constrained, constricted, so that fewer families could get in. Why? Because you can make more money if those families don’t go into bankruptcy, if you’re a credit lender.
And so I’d written an op-ed about how this would fall disproportionately hard on women who were raising families and who would be put in the position under this bill of trying to compete with Citibank, MasterCard, Visa, Bank One for getting alimony and child support from their ex-husbands.
Mrs. Clinton evidently saw…
BILL MOYERS: The First Lady then.
ELIZABETH WARREN: The First Lady. She was then First Lady. This is the 1990s. Late 1990s. Mrs. Clinton saw the piece, and I got a call from the White House. And they said Mrs. Clinton was going to be in town to give a speech in Boston and would I come and meet with her. I said, “Sure.”
And so I put together all my files. I show up at the appointed place. After she’s finished her speech, we’re ushered into a tiny, little room somewhere in the bowels of this hotel, and just the two of us. They close the door. Mrs. Clinton sits down. We have hamburgers and french fries.
BILL MOYERS: You tutor her.
ELIZABETH WARREN: And she says, “Tell me about bankruptcy.” And I got to tell you, I never had a smarter student. Quick, right to the heart of it. I go over the law. It’s a complex law. Went over the economics. Showed her the graphs, showed her the charts. And she got it.
Within 20 minutes, she could play where the rest of it would come. Well, then that will mean this part’s happened. That will mean this has happened. I said, “Yes, that’s right.” And at the end of the conversation, Mrs. Clinton stood up. She said, “Let’s get our picture taken” which we did, and she said, “Professor Warren, we’ve got to stop that awful bill,” referring to this bankruptcy bill that was sponsored by the credit card companies.
So I left. She went back to White House, and I heard later from someone who is a White House staffer that there were skid marks in the hallways when Mrs. Clinton got back as people reversed direction on that bankruptcy bill. President…
BILL MOYERS: That was supporting the industry. And because of her…
ELIZABETH WARREN: President Clinton had been showing that this is another way that he could be helpful to business. It wasn’t a very high visibility bill. And when Mrs. Clinton came back with a little better understanding of how it all worked, they reversed course, and they reversed course fast. And indeed, the proof is in the pudding.
The last bill that came before President Clinton was that bankruptcy bill that was passed by the House and the Senate in 2000 and he vetoed it. And in her autobiography, Mrs. Clinton took credit for that veto and she rightly should. She turned around a whole administration on the subject of bankruptcy. She got it.
Warren went on to relate how Hillary Clinton later caved to the pressures of Wall Street’s big money lobbyists while serving as a U.S. Senator, ultimately choosing the “well-financed” institutions of Wall Street over the needs of families – women and children in specific:
BILL MOYERS: And then?
ELIZABETH WARREN: One of the first bills that came up after she was Senator Clinton was the bankruptcy bill. This is a bill that’s like a vampire. It will not die. Right? There’s a lot of money behind it, and it…
BILL MOYERS: Bill, her husband, who vetoed…
ELIZABETH WARREN: Her husband had vetoed it very much at her urging.
BILL MOYERS: And?
ELIZABETH WARREN: She voted in favor of it.
BILL MOYERS: Why?
ELIZABETH WARREN: As Senator Clinton, the pressures are very different. It’s a well-financed industry. You know a lot of people don’t realize that the industry that gave the most money to Washington over the past few years was not the oil industry, was not pharmaceuticals. It was consumer credit products. Those are the people. The credit card companies have been giving money, and they have influence.
BILL MOYERS: And Mrs. Clinton was one of them as Senator.
ELIZABETH WARREN: She has taken money from the groups, and more to the point, she worries about them as a constituency.
BILL MOYERS: But what does this mean though to these people, these millions of people out there whom the politicians cavort in front of as favoring the middle class, and then are beholden to the powerful interests that undermine the middle class? What does this say about politics today?
ELIZABETH WARREN: You know this is the scary part about democracy today. It’s… We’re talking again about the impact of money. The credit industry on this bankruptcy bill has spent tens of millions of dollars lobbying, and as their profits grow, they just throw more into lobbying for how they can get laws that will make it easier and easier and easier to drain money out of the pockets of middle class families.
Moyers concluded his interview with Warren, telling her:
You have some very original solutions to propose in this book that go beyond ideology. Both liberals and conservatives are talking about this book. I highly recommend to my viewers that they get The Two Income Trap: Why Middle Class Mothers and Fathers Are Going Broke With Surprising Solutions That Will Change Our Children’s Futures by Elizabeth Warren and your daughter, Amelia Warren Tyagi.1,2 Thank you very much, Elizabeth, for being with us on NOW.
FOOTNOTE 1: Amazon provides the following description of the book:
In this revolutionary exposé, Harvard Law School bankruptcy expert Elizabeth Warren and financial consultant Amelia Tyagi show that today’s middle-class parents are increasingly trapped by financial meltdowns. Astonishingly, sending mothers to work has made families more vulnerable to financial disaster than ever before. Today’s two-income family earns 75% more money than its single-income counterpart of a generation ago, but has 25% less discretionary income to cover living costs. This is “the rare financial book that sidesteps accusations of individual wastefulness to focus on institutional changes,” raved the Boston Globe. Warren and Tyagi reveal how the ferocious bidding war for housing and education has silently engulfed America’s suburbs, driving up the cost of keeping families in the middle class. The authors show why the usual remedies-child-support enforcement, subsidized daycare, and higher salaries for women-won’t solve the problem. But as the Wall Street Journal observed, “The book is brimming with proposed solutions to the nail-biting anxiety that the middle class finds itself in: subsidized day care, school vouchers, new bank regulation, among other measures.” From Senator Edward M. Kennedy to Dr. Phil to Bill Moyers, The Two-Income Trap has created a sensation among economists, politicians, and families-all those who care about America’s middle-class crisis.