Family seat: Warren’s Senate win is a victory for parents and children

ELIZABETH Warren won back for the Democrats the historic Kennedy seat in Massachusetts, and so there’s finally someone in the US Senate who understands family values.

No, I don’t mean Ann Romney family values, useful as they will be to her now that old square-jaw is back under her feet.

Elizabeth Warren has real family values. That is the reason she’s winning Democratic straw polls to be their candidate for president in 2016.

Hillary Clinton comes next, so we could have a coming of age for the women of the western world. Because feminism has as many faces as we do.

Warren drew a distinction between herself and Clinton a long time ago. In her 2003 book, The Two-Income Trap, Warren wrote about winning Clinton over to the view that forthcoming bankruptcy legislation had to be stopped for the sake of single mothers.

The legislation forced bankrupts to discharge their debts to credit-card companies before paying child support — leaving single mothers high and dry. Hillary vowed to “stop that awful bill”.

But fresh into the Senate, Clinton voted for it. Banking executives had funded her campaign with $140,000 (€110,000) in a year, making her one of the two top recipients in the Senate. “Big banks were now part of Senator Clinton’s constituency,” wrote Warren.

The 2016 presidency could be a cat fight, but Warren says she won’t run and that statement could be true. Warren will be the Senate’s “conscience”, as the Huffington Post puffed, before comparing her with Bobby Kennedy.

Honesty marks out this 63-year-old granny and Harvard law professor. She saw the credit bubble 20 years before it burst. She writes of going into Citibank for a day-long seminar and explaining to the group how their massive lending to over-stretched families could end in one monster foreclosure.

But Warren had missed the point. As the most senior executive in the room said: “We have no intention of cutting back our lending to these people. They are the ones who provide most of our profits.”

Until the property market collapsed, there was a lot of money to be made from screwing late payers with fines, repossessing their homes, and selling them at a profit — a scam called “loan to own”. If a prospective borrower seemed “uneducated” or was from a racial minority, they were screwed harder. One Citibank official even said, in sworn affidavits, that she added extra fees to mortgages if the person wasn’t white. In The Two Income Trap, Warren called predatory lending “legally sanctioned corporate plans to steal from minorities”. Five years before the debt bubble brought chaos to Wall St, Warren wrote about the chaos it was wreaking in the lives of ordinary American families.

By 2003, about 1m American families were filing for bankruptcy every year. If the trend continued, Warren reckoned that more American children would be living through bankruptcy every year than through their parents’ divorce.

We would do well to remember, as we frame our own personal insolvency laws, that bankruptcy was horrifying for these families. Perhaps the most distressing story was of the dentist who heard of a family’s bankruptcy and said he wouldn’t take care of the braces he had fitted to straighten a child’s teeth. The child’s mother found someone who would take them out, if she put a wad of money up front. But her child’s teeth were still crooked and they probably still are.

Warren says she can’t take a “gender neutral” approach to the debt crisis. Her most controversial, and original, insight is that 20m American women have joined the workforce to make life better for their families and doing so has, in fact, made matters worse.

Warren shows that a family on one income in the 1960s had more discretionary income than a dual-earning family today.

The “two income trap” has been sprung. Since the insane deregulation of the lending market, the second family income has fuelled the bidding war for the basics of middle-class life.

In 1975, it became illegal not to consider a second earner’s income when assessing suitability for a mortgage. Next thing, you needed a second income just to stay afloat.

Dual-income families are more likely to go bankrupt than single-income ones and that’s because they don’t have the “all-purpose insurance against disaster” that is a stay-home mom.

Nobody ever considered the stay-home mother’s economic value. If a child got sick, she was there. If a child was born disabled, she was there. If a parent got sick, she was there. And if her partner got sick ... she went out to work.

Bringing new money into the family at least partly replaced the income that had been lost.

That’s what Warren’s mother did, back in Oklahoma, when Warren’s father had a heart attack. She got a job in a department store, and she quit on the day Warren graduated from college. Warren’s not advocating a mass retreat from the workforce for women. What she’s saying is that no family should rely on two incomes to get by. Her important message, which I hope is heard by policy-makers here, is that relying on parents having two, uninterrupted turbo-careers is inhumane.

THE answer is not what she calls “the sacred cow” of state-subsidised daycare, unless the same support went to stay-home parents. The costs of middle-class living would rise to swallow the financial gain to dual-income families, and keeping one parent at home would become impossible.

Illness, divorce, and redundancy are the reasons American families are going bust. Many of the stories Warren tells are unlikely to play out in Ireland, because of State supports: child benefit. Widows’ pension. Disability benefit. Domiciliary care allowance. State health care.

That’s why the UN lists us as sixth in the world for equality, as against the US’s 23rd. So, when I heard President Obama saying “This is the greatest nation on Earth”, in the early hours of yesterday morning, I felt like shouting back, “unless you have kids”.

Warren makes clear that the US is privatising the cost of children, more and more, while the benefits they bring enrich the nation. We have to fight that trend here, fight for the support we need to do the vital work of parenting, and in the knowledge that, from today, somebody in one of the most influential positions in the “free world” might just be backing us.

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