This Fight Is Our Fight: The Battle To Save America’s Middle Class

Elizabeth Warren, “This Fight Is Our Fight: The Battle To Save America’s Middle Class”  Metropolitan Books, 2017, 270 pp.

Elizabeth Warren went from Harvard law professor to highly effective policy activist. The Consumer Financial Protection Bureau, a key part of the 2010 Dodd-Frank financial reform, was her brainchild and has been remarkably successful at catching and deterring fraud. Then she became an influential senator, one who was widely expected to be a sort of external conscience for Hillary Clinton’s presidency, de facto leader of the “Democratic wing of the Democratic Party.”  Then came the Trump upset. Now prominent Democrats need to figure out how to be effective leaders of the opposition.  Warren’s new book is in effect a manifesto offering one vision about how that role should be played.

Warren rails against the growing concentration of income and wealth in the hands of a tiny elite; argues that this concentration of economic rewards has also undermined our political system; and links unequal wealth and power to the stagnating incomes, growing insecurity and diminishing opportunities facing ordinary families. She puts a face on these stresses with capsule portraits of middle-class travails: a Walmart worker who needs to visit a food pantry, a DHL worker forced to take a huge pay cut, a millennial crushed by student debt.

Her own success story, she tells us, depended a lot on the now-vanished availability of high-quality, low-cost public universities, plus a relatively high minimum wage — “a $50-a-semester tuition changed my life.”  I can second this story with my own: I was able to use tuition reimbursement to finish my degree at Marquette.  Also, I took many other courses on my own after my degree which I could easily afford, including online financial courses from Boston University.

My Notes:

Pg. 15:  Adjusted for inflation, the minimum wage today is lower than it was in 1965—about 24 percent lower.  (The inflation in this interim resulted in an item that cost $3.10 in 1965 would now cost $27.10 in 2016; about 8.7 times as much).  Link

Pg. 22:  Some facts of the current American economy:

Nearly one in four Americans can’t pay their bills on time.

Nearly half would not be able to cover an unexpected expense of $400.

The typical man working full-time earns less today than his counterpart did in 1972

One-third of the country’s adult population (76 million) describe themselves as either ‘struggling to get by’ or ‘just getting by”

An estimated 3.5 million people fifty or older owe more than their homes are worth. (p. 56)

Rosy economic statistics such as the GDP, stock market, corporate profitability, and unemployment, although important, have huge blind spots and consequently hide much of America’s lived experience.

Pg. 28:  Employers are following Walmart’s lead in eliminating guaranteed hours, fixed schedules, minimum wages, and benefits.  This makes it impossible to work another job, go to school in off-hours, etc...(Items I used to do regularly).  They classify many workers as subcontractors, not employees.  (Amazon can be added to this list.)

Pg. 30:  Men’s 2015 earnings since 1970 have increased 2%.  But transportation costs have increased 11%, housing 57%, health insurance 104%, College 275%, and child care 953%.  (On average, full-time care for kids under four now costs more than in-state college tuition).

Pg. 31:  Beginning in the 1970s, many families responded to the growing financial pressure by sending everyone to work.  As more women took jobs, family incomes went up, and the family-income curve kept rising from the 1970s until the early 2000s.  But America has a lot of singles—single moms, single dads, singles on their own. 

Pg. 50:  The cost of an education at a state school, adjusted for inflation, has quadrupled since 1970, plunging young people into crushing debt.  This debt casts a huge shadow on a person’s credit report, driving up the cost of everything from insurance to a home mortgage.  And unlike a home mortgage, student loans can’t be refinanced when interest rates drop and can’t be discharged in a bankruptcy. 

Pg. 121:  Student Loans are turning a profit for the US government.  In 2013 the Congressional Budget Office estimated that overall, the federal government was on track to make about $174 billion in profits on its student loan portfolio.  This is a tax on kids who go to college, not a tax included in Grover Norquist Republican pledge to not raise taxes (in fact this is hidden).  So, while banks were paying a fraction of 1 percent during the crash, students were paying 6 to 8 percent or higher.  Elizabeth Warren asked ‘why don’t we charge students the same amount the big banks pay, or at least charge a lower rate like 3.9%?’  She introduced a bill to that effect.  But the bill died because if the bill required the federal government to give up the profits on student loans, Congress had to find enough money somewhere else to fill the new hole in the budget.  In any event, the Republicans took control of Congress and that ended it.

Pg. 53:  We now live about four years longer than in 1970 and the average cost of a semiprivate room in a nursing home is more than $82,000 a year and is going up.

Pg. 54:  In 1960 about half of all private sector workers had retirement plans; today that number is down to about 13 percent.

Pg. 62:  Ever since the time of George Washington, America—like much of the world—had a boom and bust economy.  They seem to occur in twenty-year cycles: land speculation, currency speculation, railroad speculation, and even speculation about war—all these triggered panics at one time or another. 

Pg. 68:  Roosevelt rejected the idea that economic booms and busts were inevitable and devised a plan that passed in 1933 and 1934, it had three main parts:

Make it safe to put money in banks (FDIC)

Separate ordinary checking and savings from Wall Street speculation (Glass-Steagall).

Put a cop on the beat (SEC)

Pg. 80:  Reagan sponsored the trickle-down theory as well as the idea that government was the enemy.  Repealing Glass-Steagall in 1999 helped a handful of gigantic banks get even more gigantic, but it didn’t do much for the community banks trying to compete with them.  But even before the repeal of Glass-Steagall, the late 1980s S&L collapse, that cost the taxpayer $132 billion, should have served as a warning. The pattern was set: 1. Bank deregulates; 2. Bank loads up on risk; 3. Crisis occurs; 4. Bailout follows.

Pg. 87:  Antitrust enforcement also began to fade sharply in the Reagan and Bush Sr. years.  Industry consolidation took off.  In one market after another, a handful of competitors dominated:

By the 2000s, the number of major US airlines dropped from nine to four—American, Delta, United, and Southwest—now have over 80 percent of all domestic seats in the country.

Two beer companies sell more than 70 percent of all the beer in the US.

Five giant health insurance companies now own more than 83 percent of the country’s health insurance market

Three drugstore chains—CVS, Walgreens, and Rite Aid—now manage 99 percent of all pharmacies in the US.

Monsanto holds the patents for about 93 percent of all the soybeans and 80 percent of all the corn planted in the US.

Four large companies now run nearly 85 percent of the US beef market.

Three big companies now produce almost half of all chickens

Pg. 91:  Overall, the 2008 crash cost the US economy an estimated $22 trillion: this is the sum of $13 trillion in lost economic output, and $9.1 trillion in home equity losses.  (Source, US Government Accountability Office).

Pg. 102:  Unions helped build America’s Middle Class.  Over time, unions joined other groups to pass child labor laws, a federal minimum wage, the forty-hour workweek, workplace safety rules, and workers’ compensation.  They lobbied aggressively for unemployment insurance.  The median wage earner between 1947 and 1980 increased his real earnings about 65 percent. (p. 105)

Pg. 116:  The well-known 39 percent corporate tax rate in the US is not true.  After all the deductions, exceptions, and credits, the average corporation’s tax rate is about 20 percent.  This places the US corporate tax rate in the bottom 25 percent of all developed nations, including Japan, Canada, and the UK.  In the early 1950s, corporations paid about one out of every three dollars it took to run the government.  Today, that share has dropped, and now corporations pay about one out of every ten dollars. (Source: Office of Management and Budget).

Pg. 160:  In 2016, the average winning Senate campaign raised more than $10 million, and an additional $10 million was spent by outside groups to aid that campaign.  The Trump campaign was fueled by $932 million, and the Clinton campaign had $1.4 billion behind it.  This stinks of corruption.  Members of Congress generally spend 30 to 70 percent of their time raising money. 

Pg. 172:  Drug companies had long argued against the notion of providing a prescription benefit for Medicare because they feared that the federal government would use bulk purchasing to drive down the cost of the drugs.  But sometime around 2000 industry lobbyists proposed supporting what became Medicare Part D, which requires the federal government to pay for prescriptions without any price negotiations.  This costs American taxpayers an estimated $25 billion a year. Spending on lobbying has gone from $200 million in 1983 to $3.24 billion in 2013.

Pg. 214:  Trump’s election promises and vision was like the conservative philosophy on steroids: trickle-down economics, a determination to roll back regulations and cut taxes, all of it extreme and with giant buckets of poisonous bigotry.  He offered to weaken the EPA, gut key bank regulations, cut back on workplace safety inspections, repeal the Affordable Care Act, and institute even bigger tax cuts for those at the top.  All wrapped up with the promise to work hard for the little guy. Trump could be the punch that knocked out everyone’s lights and changed our country forever.

After the election there was speculation about who Donald Trump ‘really is’ and what ‘draining the swamp’ really means.  Maybe analysis of some Trump appointments will yield some clarification:

Pg. 243ff: 

Steve Bannon: Chief Strategist.  Bannon had been the head of Breitbart News a far-right website that, during Bannon’s tenure, celebrated white supremacists and ran headlines asking questions like ‘Would You Rather Your Child Had Feminism or Cancer””

Jeff Sessions: Attorney General.  Appointed despite a string of allegations of racism and a record of consistently opposing voting rights as well as his long rambling rants about immigrants.

Steve Mnuchin (Treasury Secretary): Goldman Sachs executive who made a fortune after the financial crash by buying a bank and turning it into an aggressive (and sometimes illegal) foreclosure machine.

Rex Tillerson (secretary of state): Past CEO of ExxonMobil famous for his chummy ties to Russian leader Putin.  Under Tillerson, Exxon funneled money to climate deniers and groups that fought environmental regulations

Scott Pruitt (EPA Chief): When serving as Oklahoma attorney general, Pruitt literally shut down his own environmental enforcement unit. 

Betsy DeVos (Department of Education): has long supported initiatives that allow for profit schools to soak up tax dollars. 

Tom Price (Department of Health and Human Services):  As a congressman, Price proposed privatizing Medicare and Medicaid and repealing the Affordable Care Act outright.  While a congressman he was actively buying and selling stocks in companies in the very industries he was overseeing.

Andrew Puzder (secretary of labor): Puzder made his fortune squeezing minimum-wage fast food workers at Hardees add Carl’s Jr. restaurants, and he opposes overtime pay and any increase in the minimum wage.

 Pg. 247ff:  Democrats must:

1.       Fight bigotry.  Trump has stirred up something ugly in America that was already there.  Of Trump’s sixty-three million voters, there were many that voted for him despite—not because of—the hatefulness of his campaign.

2.      Build Opportunity:  Build it for everyone, not just the top 10 percent.  Since the election of Reagan, almost 100 percent of the new income produced in this country has gone to the richest 10 percent. 

a.       More than 70 percent of the American people believe that students should have a chance at a debt-free education.

b.      Nearly three-quarters of Americans support expanding Social Security.

c.       Two-thirds of all Americans support raising the federal minimum wage.

d.      Three-quarters of Americans want the federal government to increase spending on infrastructure.