As the 2020 presidential candidate known to have a sweeping plan for everything, Sen. Elizabeth Warren's favorite and most overused phrase is "big, structural change."
"Our country is in a time of crisis—the time for small ideas is over," she said emphatically in June 2019 at the California Democratic Convention. "The entire structure of our system has favored the rich and the powerful, pick any issue you care about and it is painfully obvious."
According to the 71-year-old Harvard Law School professor famous for grilling bank executives and spearheading the creation of the Consumer Financial Protection Bureau (CFPB), America's problems, like gun violence and the racial wealth gap, are all connected to one thing, and that is "power concentrated in the hands of the wealthy and the well-connected." Her message is simple: the system is rigged and it must be broken and remade. Once seen as a radical philosophy, it appears the direction a section of voters may be leaning toward in response to the current administration and disappointment in other Democratic leaders.
Every candidate that runs for highest office has their economic proposals scrutinized, but Warren's understanding of how the world works meant her economic plan was front and center. To her, the single biggest structural change America needs is a more equitable, safe and prosperous society is of its financial and economic system.
Big, Big, Big
Warren has coined the term "economic patriotism" to describe a government prioritizing the interests of regular workers and middle-class people over those of the financial sector and giant, multinational corporations.
"For decades, Washington has lived by a simple rule: If it’s good for Wall Street, it’s good for the economy," she wrote in a Medium post arguing that the financial sector has been sucking value out of the economy instead of benefiting it. If elected, the staunch opponent of easing post-crisis reform will target private equity firms so that they are "on the hook" for bad investments instead of exiting with tidy profits, expand postal banking for underserved families and appoint Fed governors that will introduce a real-time-payment system for everyday transfers even if it hurts large banks.
Warren also sought new executive compensation rules for the banking industry and a reenergized Financial Stability Oversight Council to monitor and curb leveraged corporate lending that has reached record levels. The "carried interest loophole" allows investment fund managers to count carried interest, or their share of the fund's profit, as capital gains for taxation, and Warren planned to close it. This is something former President Donald Trump pledged to do as well.
Warren also promised to go after powerful monopolies in the tech, banking, and agricultural sectors by reversing anti-competitive mergers, passing legislation so that large tech platforms, like Alphabet Inc.'s (GOOG) Google Search and Amazon.com Inc.'s (AMZN) Marketplace, are legally considered platform utilities, breaking up vertically integrated agribusinesses, like Tyson Foods Inc.(TYSN), and pushing for the passing of her 21st century Glass-Steagall Act, which would prevent investment banks from accessing taxpayer-subsidized insurance. Warren also supports cannabis legalization and banning for-profit prisons.
Household Debt and Welfare
Warren wants to slash household debt by raising wages and bringing down costs like rent, health care, child care, etc. She advocated like to raise the federal minimum wage to $15, close the race and gender pay gap, and empower workers by supporting unions and allowing them to elect at least 40% of board members at large U.S. corporations.
Student debt has reached $1.5 trillion in the U.S., and Warren introduced a bill recently that would cancel $640 billion of it, helping 95% of the 45 million people burdened. She also wants to make tuition free at all public technical schools, two-year colleges, and four-year colleges.
Since the debt ceiling is a dogged concern, Warren said she'd get rid of it or have it automatically get raised based on the government's spending decisions. Warren also advocated for a single-payer, Medicare for All system as was proposed by rival Sen. Bernie Sanders. She says it would cost $52 trillion over a decade, including $20.5 trillion of new federal spending, and save Americans $11 trillion over the same period. Providers, like doctors and hospitals, would receive smaller payments and drug prices would also be brought down.
Trade and Manufacturing
While Trump's strategy for helping U.S. trade and manufacturing was quite simplistic and focused on fixing trade deficits with tariffs, Warren advocated for America's trade policy to be dictated by the need to protect workers, farmers, and the environment.
"America enters into trade negotiations with enormous leverage because America is the world’s most attractive market," she wrote in another Medium post referencing economic patriotism. "As President, I won’t hand America’s leverage to big corporations to use for their own narrow purposes — I’ll use it to create and defend good American jobs, raise wages and farm income, combat climate change, lower drug prices, and raise living standards worldwide."
What does this look like in terms of policy? Transparent trade negotiations with more involvement of the public, representatives from labor, environmental, and consumer groups on advisory committees, labor and environmental standards for trade partners, a multilateral agreement to protect domestic green policies from WTO challenges, border carbon adjustment, reduced exclusivity periods for drugs in trade deals, fair prices for American goods and country-of-origin labeling rules, enhanced border inspection requirements for food imports, ending Investor-State Dispute Settlement (ISDS), laws ensuring imposed duties benefit workers, a new federal office to promote American clean energy products abroad, etc. She also believes in preparing the American economy for the possibility of a no-deal Brexit.
When it comes to manufacturing, Warren proposes a Green Manufacturing Plan that would see the government invest $2 trillion over the next ten years in green research, manufacturing, and exporting. We'll look at how she plans to pay for this and other plans in the next section.
Paying for It
Warren's Green Manufacturing Plan would be paid for with a Real Corporate Profits Tax that would prevent corporations from abusing loopholes. Under this plan, large U.S. companies that report more than $100 million in profits (domestic and foreign) to investors would be charged 7% on every dollar of profit above it in addition to its liabilities under the current tax laws. Research by left-leaning University of California-Berkeley economists cited by Warren's campaign said the tax would raise $1 trillion in ten years.
When it comes to her health care plan, Warren promised "not one penny in middle-class tax increases. A new Employer Medicare Contribution program would raise $8.8 trillion. Companies would send 98% of the amount they usually spend on employee health insurance to the federal government. Businesses with less than 50 employees would be exempt unless they already pay for health care, and large companies with extremely high executive compensation and stock buyback rates would contribute more.
The rest of the money would be raised through a variety of ways including better tax enforcement, tax on the higher take-home pay of employees, a tax on financial transactions, fees on large banks, a minimum 35% tax on foreign corporate earnings, eliminating accelerated depreciation of assets of companies and a wealth tax.
Warren's proposed Wealth Tax legislation is also a new concept to most Americans. Essentially an additional tax of 2-6% on household net worth over $50 million, is expected to raise $3 trillion over ten years and affect 0.1% of the population. Enforcement would require additional investments in the Internal Revenue Service (IRS).
Although Warren was an underdog by most standards, Warren's campaign did gain some ground. She came in second place in the October-November of 2019 YouGov, NBC News/Wall Street Journal, and Fox News polls. A July 2019 PerryUndem survey of close to 2000 Democrats reported on by Vox suggested that the strongest candidate in the party is Warren. However, Warren dropped out of the presidential race in March 2020.
Even though she failed in her bid to win the Democratic primary, some of her more popular ideas may be adopted by other candidates in the future.