CNN
—
Elizabeth Warren has seen this movie before.
As a Harvard professor, Warren rang the alarm bell in the lead up to the 2008 financial crisis. Now a veteran senator, she is ringing that bell again.
Where President Donald Trump’s sees his tariffs, tax cuts and sweeping deregulatory effort as the cornerstones of an economic agenda for a new “golden age,” the Massachusetts senator sees something far more ominous.
“They all create this toxic stew that just takes one more push, and we’re looking at the kind of crash we saw in 2008,” Warren said in an interview this week in her Senate office.
Warren doesn’t frame the next crash as imminent but emphasizes the combination of Trump’s economic policies create the conditions for a spiral: The tariffs drive up prices on consumers at the same time businesses hold off on new investments and credit tightens. Consumer debt, which is already rising, soars as regulators dramatically ease crisis-era rules and enforcement priorities. The soaring US debt, exacerbated by Trump’s massive agenda bill, leaves US economic stability in question.
Trump and his advisers, of course, dismiss that entire argument. But it’s one Warren wants to detail in full.
Trump’s relentless economic policy blitz has consumed markets and monopolized airwaves for the better part of six months. Warnings of looming catastrophe are hardly new, and up to this point have proven off-base in the face of a resilient US economy, amid ever-shifting tariff deadlines and the recent passage along party lines of Trump’s sweeping tax and spending cuts bill.
Warren has been wrestling with the clearest way to recapture some semblance of an economic narrative that has, on account of its sheer velocity, been a complicated target for Democrats.
“Like shadowboxing a bipolar ghost,” one of Warren’s Senate Democratic colleagues told CNN back in February.
Warren will lay down her marker on Wednesday at the Exchequer Club, in a speech the progressive firebrand was still revising as she calmly walked through her thinking in an interview in her office the morning before. The conversation was wide-ranging, threading together her critique of four decades of US economic policy – and the political environment it helped create – with what she sees as an administration consumed by chaos and rife with cronyism. She sees herself as uniquely suited to spearhead the alternative.
“I feel so in sync with American families,” Warren told CNN. “It may not be where everybody in America is on their politics, but I’m pretty sure I know where they are on their economics.”
In recent weeks Trump’s economic advisers have made a point of highlighting the misplaced forecasts of economic catastrophe and market collapse from his first term and throughout his first few months in office.
Trump has already secured his cornerstone legislative win. The S&P 500 hit another all-time high on Tuesday before closing slightly down, and the US economy remains steady and resilient.
Warren has tried to be methodical in her battles with the Trump administration – even if at times it is difficult to tell if the White House cares enough to engage with the senator who often served as Trump’s foil in his first term.
CNN reached out to the White House for comment on Warren’s latest remarks. Trump has in the past called her “crazy” and a “very angry person.”
She makes Senate floor speeches and an endless stream of information requests from agencies across the policy spectrum. Her role as top Democrat on the Senate Banking Committee has served as a perch for relentless cross-examinations of top administration officials’ public hearings.
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Just during her conversation with CNN, Warren’s office fired off letters to the Department of Education and the Federal Reserve.
Now, Warren is ready to lay out in full her view of the economic risks Trump has created in his first six months and, more critically in her eyes, the most viable political and policy alternative.
Warren’s alternative path carries striking similarities to the economic agenda outlined by President Joe Biden early in his first year in office, only to be whittled down in the legislative debate. Investments in housing, education, health care, childcare, all financed through reversing corporate tax incentives.
“We’ve invested in Wall Street banks,” Warren said. “It’s time to invest in American families.”
The failure of Biden and Congressional Democrats to pass many of those investments wasn’t a reflection of the policies themselves, Warren said.
“I think the framing didn’t capture why those investments are so important,” Warren said of the 2021 debate. “I’ve been shocked by how much of our national political dialog is ‘us versus them.’”
Inequality and ‘abundance’
Warren wants to shift that debate, but first she wants to use Wednesday’s speech as an opportunity to step back and explain how the US economy reached this point.
The sharp and steady divergence between the wealthiest Americans and workers left behind has driven political and economic debates for the better part of two decades now. With that context, Warren paints a clear-eyed picture of national elections driven by voters who, cycle after cycle, get behind the candidate of change.
“There are a lot of promises that get made and in fact, the promises sometimes overlap,” Warren said of the bipartisan gravitation to a message centered on an unfair economy and a hollowed out middle class. “The details don’t, but the promises do.”
Warren is well aware of the intraparty debate over “abundance” – its merits, origin and ownership of the idea – that has consumed Democratic economic policy circles since the book bearing that name proposed a new agenda for the party.
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“Let me make a suggestion here how to think about this: There are many Democrats and a whole lot of Republicans who embrace the idea that government doesn’t do a good job, and I understand, I want government to do a good job,” Warren said. Parenthetically, she argued that the Consumer Financial Protection Bureau, which she helped create, “has done a damn good job in a dozen years.”
Government does need to work better, Warren said. “But don’t ignore the role of the wealthy CEOs and their giant corporations in how they influence the policies that kept us from doing much of what we should be doing in investing in American families.”
Which brought her back to Trump and his campaign promises, which she views as having created a glaring vulnerability.
While the worst-case scenarios of tariff-induced soaring inflation haven’t surfaced, economic policy makers have warned that they will soon filter through to consumers. The hard data, even with the expected uptick in the June consumer price index this week, may not show it yet. But a steady stream of business, manufacturing and consumer surveys, Warren notes, all point to spikes in the months ahead.
“He’s going to try to maintain, he’s going to keep telling people he’s working for them, but the reality doesn’t match the words” Warren said. “Voters will hold their leaders accountable.”
Warren acknowledges tariffs are a tricky issue for Democrats. Prior to Trump, the party was far more open to tariffs and trade policy with a more protectionist tilt than the other side of the aisle.
But Trump’s approach has created an opening to present a more targeted alternative approach, Warren said.
“He just uses it as chaos,” Warren said. “It’s like being in a room with a guy who’s doing the ax throwing, like only, he’s throwing that thing everywhere.”
