A Fighting Chance (11 page)

We’d both laugh, and then we’d start talking about the fight. He was passionate and funny, and his energy never flagged. But he couldn’t change the fact that the deck was still stacked against us. All the lobbyists, all the press flacks, all the campaign contributions—it seemed as though the banks had it all, and nothing we did could prevent them from gaining a little more ground every month.

The banking industry bought everything; they even bought their own facts. The industry commissioned three different studies, each of which was touted as “independent.” Each explained the urgent need to change the law—exactly the way the banking industry wanted it changed. One particularly damaging result of these bogus studies was a claim that bankruptcy cost every hardworking, bill-paying American family a $550 “hidden tax.” The number was entirely made up, fabricated out of thin air, but the press reported it as “fact” for years.

This one hit me hard. I’d spent nearly twenty years sweating over every detail in a string of serious academic studies, agonizing over sample sizes and statistical significance to make certain that whatever I reported was exactly right. Now the banks just wrote a check, commissioned a friendly study, and purchased their own facts. Then they had their press people distribute the facts and lobbyists hand the facts to congressional staffers. From the halls of Congress to the front pages of newspapers all over the country, these new “facts” became reality.

This strategy—and the cynicism behind it—made me furious. It also scared me. If the facts about bankruptcy could be purchased, then who knew what they would claim next?

The commission report had been delivered in October 1997, and for the next three years we fought off the industry as best we could. But in 2000, we were running out of ways to counter the relentless campaign. The industry-supported bankruptcy bill passed the House and the Senate by sizable margins. Fortunately, one last warrior held out against the banks and the credit card companies: President Clinton. In 1998 I had met with First Lady Hillary Clinton to discuss the proposed bankruptcy legislation, and after our meeting she had declared that she would fight on behalf of working families, against “that awful bill.” Now the president was under enormous pressure from the banks to sign the bill, but in the last days of his presidency, urged on by his wife, President Clinton stood strong with struggling families. With no public fanfare, he vetoed the industry’s bill.

We were still stacking sandbags, and working people would be protected a little longer.

An Obscene Phone Call

The banks lost in 2000, but they didn’t quit—they just spent more money on lobbying and campaign contributions. Soon the banking industry was outspending everybody else—tobacco, pharmaceuticals, even Big Oil. Credit card companies lined up to boost George W. Bush’s presidential campaign.

In 2001, the bill looked sure to pass Congress again, and now George W. Bush was in the White House, promising to sign it into law. The recent election kept the House in Republican control, and every single Republican was ready to support the bill. The Senate was evenly split between the two parties, but one of the bill’s lead sponsors was Democratic powerhouse Joe Biden, and right behind him were plenty of other Democrats offering to help.

Never mind that the country was sunk in an ugly recession and millions of families were struggling—the banking industry pressed forward and Congress obliged. Eventually, versions of the bill were passed by both the House and the Senate, and in late 2002, a final version of the bill emerged from conference. A few weeks earlier, we had lost a friend and key champion when Senator Paul Wellstone was killed in a plane crash. Now it seemed that our epic battle was all but over.

By that point, I was resigned to the outcome. We had rallied some great organizations and terrific people to our cause: since 1997, we had protected a lot of families from disaster. We had fought the good fight, but now we would lose.

One day in mid-November, I sat in my office writing the final exam for the term.

When the phone rang, I jumped. I picked it up and answered with my usual, “Elizabeth Warren.” My mind was still on the exam.

I heard a man shouting. He was struggling to catch his breath, and mixed into his shouted words was a jumble, including what sounded like some surprising epithets. “We showed those #*&!!s. They shouldn’t mess with us!”

I thought: Wow, my first obscene phone call—and it’s happening at Harvard. Who knew?

I had taken the phone away from my ear and was about to hang up when I realized that the voice sounded oddly familiar. There was something about the accent.

I pulled the phone back to my ear and listened for another few seconds. Then I said: “Senator Kennedy?”

“Yes, yes!” he yelled into the phone. “We’re here. We’re in the cloakroom. We did it! We pushed back—and we won! Here, talk to Dick.”

Senator Durbin came on the line and told the whole story. The politics were fierce, he said, and they revolved around … abortion.

Recently, a handful of prochoice groups had won some big lawsuits against a few super-aggressive abortion clinic protesters. The judgments levied by the courts against the protesters added up to more than $1 million, but the victories by the prochoice groups evaporated when the protesters filed for bankruptcy and dumped the court orders to pay. A fight erupted over whether this was a fair use of bankruptcy. Prolife advocates argued that it was, but Senator Schumer pushed back hard, adding an amendment to the Senate version of the bankruptcy bill that would block such actions. His amendment inflicted chaos on the credit industry’s well-laid plans.

When the House and Senate bills went to conference, negotiators worked out a compromise. At the last minute, however, House Republicans rejected the compromise language. Now all the pressure was on the Senate to accept the House version and give up on any limits on abortion protestors. But the Senate held firm. Schumer, Kennedy, and Durbin worked the phones, and they picked up enough allies to kill the bill without a vote.

After explaining what had happened, Senator Durbin handed the phone back to Senator Kennedy. He had stopped yelling, and now he was laughing. We did it, he said. We did it! He sounded as if he’d just scored the winning touchdown.

So we had won, at least for another day. The victory was the result of some pretty tangled politics, but the families who needed bankruptcy protection were safe behind our sandbags for a little while longer.

Wanted: A Real Live Banker

The banking industry had lost for a second time, but it came back once again, bringing even more money and more lobbyists. It was like fighting some kind of mythical creature—cut off one head and two grow back.

One morning, I got a call from the producer for a national television news program. I had talked to the media from time to time, sometimes on the record and sometimes on background. My hope was always that they might help bring attention to the important safety net that bankruptcy provides families in trouble. I could tell from the producer’s breathless tone that he thought he had a great offer for me: he asked if I’d agree to come on their show and debate the bankruptcy issue with someone from the banking industry. No interruptions, enough time to talk, a conversation that went straight to the issues.

My stomach knotted up with tension. National television. I might really mess up. On the other hand, I might be able to reach a lot of people.

I was in. “Who will the banker be?”

The producer said he didn’t know, but once they had someone lined up, he would call back. A couple of days later, he telephoned to say that the debate was all set, and he named the other person they would invite.

I asked which bank he worked for.

He checked his notes and then answered: The other guest would be an “industry representative.”

I felt like my balloon had just popped. I told the guy I wouldn’t debate a lobbyist. I said that if he could find a
real
banker who was willing to go on television and explain his company’s lending practices and their position on this law, I’d be happy to debate him all night long—but not a lobbyist.

He was pretty cheerful. “Okay,” he said, “I’ll call you back.”

Several days went by before he telephoned again. This time he seemed a little more subdued. He told me that he had called bank after bank, and none of them would allow a representative to participate in the debate. The giant banks employed countless executives, but not a single one would appear on television to defend their lending practices or explain all their lobbying in Washington. Not one.

And there it was, the industry’s strategy made plain: Take no responsibility, don’t show your face, just keep spending millions of dollars behind the scenes. Let the “industry representatives” working at trade associations all over Washington talk to the media and keep pushing the $550 lie.

So I turned down that interview, and I didn’t get any other offers to debate bankers. I talked to the press when I could, and occasionally I went to Washington to testify before a congressional committee about the intricacies of bankruptcy law. But mostly I taught my classes and wrote my books.

The Two-Income Trap

In the early 2000s, Terry Sullivan, Jay Westbrook, and I launched another bankruptcy research study. This was our fifth time gathering this kind of data, so I assumed our new findings wouldn’t generate much interest. Boy, was I wrong.

By 2001, the number of families in financial collapse was shocking:

• More children would live through their parents’ bankruptcy than their parents’ divorce.

• More women would file for bankruptcy than would graduate from college.

• More people would file for bankruptcy than would be diagnosed with cancer.

To say the numbers were huge—or enormous or gigantic—didn’t even begin to cut it. Pick an adjective, and the problem was bigger than that.

And it was no longer “just anyone” who was going bankrupt. It was families with kids. To be sure, older folks and childless people were going broke in record numbers, but our newest finding knocked me back: The single best predictor that a family would go bankrupt was if they had a child. And this didn’t apply just to poor, single mothers with limited education and no opportunities. Bankruptcies were exploding among solidly middle-class families, families with Mom and Dad both working full-time—or working full-time right up until something went horribly wrong.

So I set out to pick at the sore yet again, but this time the sore was a lot bigger. Instead of asking why people went bankrupt, now I had a different question: What on earth was wrong in our country? How could we have
that
much distress? And what made having children so dangerous to a family’s financial security?

By now Alex and Amelia were grown. Alex was twenty-five and a full-fledged computer expert, designing databases or taking on software troubleshooting jobs that I didn’t know existed. He was on his way to Los Angeles to live near his sister and enjoy the sunshine.

Amelia was thirty. She had married her boyfriend, Sushil Tyagi, a brilliant young man from a village in northern India, who had come to the United States for graduate school. Now they had a baby, a beautiful little girl they named Octavia. My relationship with Amelia had changed completely. Now my daughter was the Working Mother. And somehow I was no longer the meddlesome mom who was trying to keep her from having any fun. I had been promoted to “Wise Person Who Knows How Babies Work.”

In 2001, I went to California to help Amelia during my summer break at Harvard. Little Octavia was a fretful baby, and I rocked and rocked her. And then, at some point during all that rocking,
bam!
I fell in love. And this was the real deal: hit-on-the-head, knock-me-over, stars-in-the-eyes love. It was a lot like the way I had loved my own babies, but much better. This was all the love without any of the scary responsibility or the guilt over whether I was making the right choices. Amelia could be the anxious Working Mother. I just got to love-love-love the baby. Octavia gave me the chance to experience some of the purest joy I’d ever felt in my life.

When it came time to go back home, I could barely stand it. My arms ached for that little person. So I came back—and came back again. And somewhere along the way, I made a promise that I would find a way to be a part—a real, in-the-trenches, regular part—of this little girl’s life.

Amelia and I had lots of long, rambling conversations during my visits, and sometimes the talk spilled over to my research. During one of those early trips, I asked her to help me dig into some government data about bankruptcy. Amelia had worked for consulting giant McKinsey and then cofounded a start-up business. A self-avowed “quant jock” (which just meant she liked to work with numbers), she jumped right in and soon began to offer up some intriguing insights. One day, between fretting over a bad rash under the baby’s chin (it was really gross) and poring over the data, we hatched a plan: Let’s write a book together.

Bruce thought this idea was nuts. He remembered the days when Amelia and I could barely make it through dinner without one of us yelling at the other. What was I thinking? Besides, a mother-daughter collaboration just isn’t something professors
do
. Professors are supposed to coauthor books with other professors, and the books ought to be really dull and have a million footnotes that almost no one ever reads.

But Amelia brought something important to the new work. I was now the old generation, and she was the new. We framed the book around our lives. We compared the middle-class family of 1971—the year I had started out as a young mother with a new baby—with the middle-class family of 2001—the year Amelia was starting out as a young mother with a new baby. Thirty years, one generation—and in that snippet of time the middle class had turned upside down. This was the story we would tell.

Amelia brought a second value to the table: she was the only person who had the nerve to look me straight in the eye and say calmly, “Mom, you are boring.” She still does that. I learned the hard way that collaborating with my daughter is not for sissies.