Sen. Elizabeth Warren (D-MA) told George Stephanopoulos Sunday that she left the Republican Party in the mid-90s because it was tilting the playing field in favor of Wall Street.
Warren has quickly become a populist hero to liberals. Stephanopoulos, host of ABC’s The Week, noted something in her background that “might surprise” her supporters: the fact that she has voted Republican in the past, and was a registered Republican in Pennsylvania from 1991 to 1996. Warren said she left the party after that because she felt it was siding more and more with Wall Street:
I was an independent. I was with the GOP for a while because I really thought that it was a party that was principled in its conservative approach to economics and to markets. And I feel like the GOP party just left that. They moved to a party that said, “No, it’s not about a level playing field. It’s now about a field that’s gotten tilted.” And they really stood up for the big financial institutions when the big financial institutions are just hammering middle class American families. I just feel like that’s a party that moved way, way away.
Warren’s instincts on the GOP’s sympathy for the big financial institutions proved prescient. Former Senator Phil Gramm (R-TX) spent the 1990s spearheading legislation that made the 2008 financial crisis possible: the Gramm-Leach-Bliley Act, which broke down the firewall between commercial banks and the far riskier investment banks, as well as the Commodity Futures Modernization Act, which deregulated the over-the-counter derivatives that played a key role in the 2008 financial collapse. Both bills passed with majority Republican support, though they were also supported by a good deal of Democrats and the Clinton White House.
“Starting in the 80s, the cops were taken off the beat in financial services,” Warren explained. “These guys [the big financial institutions] were allowed to just paint a bullseye on the backs of american families. They loaded up on risk, the crashed the economy, they got bailed out. And what bothers me now is they still strut around Washington, they block regulations that they don’t want, they roll over agencies whenever they can, and they break the law. And they still don’t end up being held accountable for it and going to jail.”
Warren also dinged the Obama White House, saying, “I make no secret of my differences with the administration in how they’ve treated the large financial institutions.” But she noted the Consumer Financial Protection bureau (CFPB) — which was largely Warren’s brainchild — would not exist without Obama’s support. The agency has already begun cracking down on payday lenders and debt collectors, while cataloging and reporting on mortgage service abuses.
Warren credited the agency with already forcing the largest financial institutions to return more than $3 billion they’ve cheated from customer, and she herself has gone after Republicans for filibustering the CFPB’s nominated director unless the agency is restructured to weaken its political independence.
Since 2008, the Democrats and the Obama Administration have made some efforts — albeit limited — to repair some of the damage, particularly by passing the Dodd-Frank financial reform bill and the CFPB. But prominent Republican senators like David Vitter (LA) former Sen. Jim DeMint have tried to roll back the Dodd-Frank financial regulation laws, or repeal them wholesale. And as Mike Konczal has detailed, both establishment and Tea Party republicans have spent the time since the crisis opposing nearly every new regulation to rein in Wall Street’s risk-taking and every attempt to reinstate the rules lost during the 1990s.
“What’s happening is we’ve got a washington for those he can hire armies of lobbyists and lawyers. Their voices get heard in Washington and rules get tilted in their favor,” Warren said.
“Working families, not so much.”