US Department of Labor [Public domain], via Wikimedia Commons

Sen. Elizabeth Warren is one of the top-tier Democratic candidates for president, near the head of the pack along with former Vice President Joe Biden, fellow progressive Sen. Bernie Sanders and upstart Mayor Pete Buttigieg. Warren, however, saw some of her momentum stall in national and state polls after she rolled out her proposal to pay for “Medicare for All” in early November and a subsequent plan detailing how she would transition the American health care system to a single-payer model.

She also got into high-profile, public battles with billionaires such as Leon Cooperman and Lloyd Blankfein. With the Iowa caucuses coming in early February, the Democratic presidential candidates, particularly those at the top of the field, are scrambling for support among the party’s rank and file. Warren on Saturday sat down with CNBC’s John Harwood at the Erickson Community Center in Clinton, Iowa, to discuss the state of her campaign, her vision for remaking American capitalism and what she thinks of President Donald Trump’s impeachment proceedings. A transcript from Speakeasy with John Harwood featuring Elizabeth Warren follows.

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Elizabeth Warren transcript

John Harwood: Do you see any lessons for yourself for Democrats, for American politics in the results of the British election the other day and what happened to Jeremy Corbyn?

Elizabeth Warren: Well, you know, I think that the Brexit part of that vote is a huge sway and it seems to me that it’s clear that there was a real divide in the country, and big part of what drove that vote.

John Harwood: You don’t think it was a lesson that the liberal Democratic equivalent shouldn’t go too far left?

Elizabeth Warren: I think that this notion of left – I way I think of it is I don’t think there’s any such thing as a problem of government that works too much for the people. And that’s what this ultimately should always be about. That’s what all our governments should be doing. That’s what a democratically elected government should do. It shouldn’t just be there for the wealthy and the well-connected. It should be there to help strengthen middle-class, to help give opportunities to working people. That’s what government can do when it’s working best.

John Harwood: One issue that came up in your recent transparency battle with Mayor Pete had to do with who his clients were at McKinsey. In particular, whether or not any of the advice that he used was used to lay off workers. But if it did, is there anything wrong with that?

Elizabeth Warren: I’m glad that the mayor agreed to disclose the information about his past clients, because I think the American people have a right to know in effect where conflicts are, potential conflicts of interest. But for me, this is a lot less about what was happening five years ago or 10 years ago or 15 years ago, and a lot more about what’s happening every day in this primary as we go into the 2020 election season. So, it’s about who are your bundlers, the people who get special access to the candidate’s time, in return for agreeing to raise $25,000 or a quarter of a million dollars. Who is putting together the big parties? Who’s doing the political action committees?

John Harwood: But the point of view I was asking from was as an economic matter. You say that you’re a capitalist to your bones.

Elizabeth Warren: I am.

John Harwood: Isn’t a consultancy that advises businesses on how to be more lean and efficient part of the creative destruction that makes capitalism capitalism?

Elizabeth Warren: Depends on the kind of capitalism we’re talking about. I am proposing something called accountable capitalism. You may remember that, for more than a century, American corporations owed multiple duties. They owed duties to their investors, but also to their employees, to their customers, to the communities where they were located, to our country. And then, in the late ’70, an economist comes along and says, “Hey, here’s a novel idea. How about if you only owe any kind of duty to your investors?” Which means, make it all about profitability. That means that American corporations today, these giant corporations, they have no loyalty to America or to American workers.

John Harwood: Now Jamie Dimon and the Business Roundtable came out earlier this year and said the days of sole fealty to shareholders are over; we’re making some changes. Was that meaningful in your view?

Elizabeth Warren: Can we just put that in a little bit of context? I had come out with my accountable capitalism proposal that said that giant companies, like the kind of company that Jamie Dimon runs, should have to be chartered at the federal level and their charter should actually say that they owe all of these multiple duties, and that employees can elect 40% of the board of directors to make sure.

John Harwood: You think you caused them to make that decision?

Elizabeth Warren: Well, all I’m saying is that’s what happened first. There was a lot of conversation about it, and then Jamie Dimon and the heads of some other very large corporations said, “Oh, we don’t need a law. We’re just going to make that change voluntarily.”

John Harwood: Do you think they’ll do it on their own?

Elizabeth Warren: No. I think that what’ll happen is, they’ll say they’re going to do it on their own, and they may make some adjustments. But understand this: there’s a reason you put laws in place. Because the one who doesn’t follow voluntarily is the one who then gets a little short-term comparative advantage, gets to boost the share price just a little bit. You put in rules so everybody competes on a level playing field. That’s what we should do with accountable capitalism. If Jamie Dimon thinks it’s a good idea for giant corporations like JP Morgan Chase to have multiple obligations, he and I agree. Then let’s make that the law.

John Harwood: Your friend Deval Patrick, the former governor, worked at Bain Capital. When he got into the race the other day, he said he thought the Obama campaign had given a bum rap to Bain when he was running against Mitt Romney. Is Bain Capital and what it represents in the economy a bad thing?

Elizabeth Warren: When they’re trying to tweak up corporate actions that are already aiming only toward increasing profitability, perfectly willing to, if they could save a nickel by moving a job to a foreign country, would do it in a heartbeat – that is a problem in our economy. Even Jamie Dimon says so. Others who come in and help them do that, that’s not making our economy work any better and it’s not making our country work any better.

John Harwood: Do firms like that have a constructive role to play?

Elizabeth Warren: They have a constructive role to play when we have accountable capitalism. If what they were helping do is make that company work better for employees as well as shareholders, for the communities where they’re located as well as shareholders, then sure. But that’s not what they’re doing.

John Harwood: You don’t think that Obama was giving a bad rap to Bain?

Elizabeth Warren: When they’re just trying to narrow up and say, “the only thing that matters is the bottom line, profits, profits, profits, and whoever you have to step over to get there, and however many hardworking people you have to lay off to get there,” then I think that’s a problem.

John Harwood: One of the things that critics of the president – liberal critics of the president say about his immigration policies is the cruelty is the point. He’s trying to deter behavior. When you and your campaign sell mugs that say “billionaire tears” on them, why shouldn’t Jamie Dimon, Leon Cooperman, Lloyd Blankfein, Bill Gates, all the people who’ve complained – and ordinary voters – why shouldn’t they conclude that punishment is the point from your point of view?

Elizabeth Warren: No, no, no. Come on. As I say in every one of my town halls, if you made it big, I mean really big, I mean top one 10th of 1% big, good for you. That’s great. But pitch in two cents so everyone else gets a chance to make it big. Because for me, that’s what this is all about. This year the top – the 99%, they’re going to pay all in, they are going to pay about 7.2% of their total wealth in taxes. The top one-tenth of 1%, those top millionaires and billionaires, fortunes above $50 million, they’re going to pay less than half that, about 3.2%.

And look, it’s not just about asking to pay taxes, it’s about what we do with those taxes. That two cent wealth tax would mean we could pay for universal childcare for every baby in this country. That would be life-transformative for those babies who got high quality, early education experiences and get ready for kindergarten. It would be life-transformative for their mamas and their daddies who could finish school, who could move to a part-time job, who could move from a part-time job to a full-time job.

The way I’ve set it up, it would be life-transformative for all of the childcare workers and preschool teachers who would see their wages go up substantially, so they’d be paid the professional wages they deserve. And that would mean a lot of money back into the economy. So think of it this way. It’s about values. Two cents with the millionaires and billionaires, or invest that money in every one of our children and in growing our economy.

John Harwood: Why do you think that those people believe that they’re being vilified, believe that you hate business, believe that you’re not a capitalist?

Elizabeth Warren: You’d have to ask them. But I will say this: a lot of them just don’t want to pay the taxes. And that’s part of the problem we’ve got here. Government listens disproportionately to rich guys who don’t want to pay taxes. Remember, for everybody who says that this government is caught in gridlock, remember that when the question was cutting taxes for the richest and for the biggest corporations, it took the Republicans about five weeks in order to call everybody in and do a trillion and a half dollars in tax breaks, tax breaks that went mostly to those at the top. The folks at the top, they get heard all the time in Washington. I want middle-class families to get heard in Washington.

John Harwood: You want to take a hammer to major structures in the American economy: break up big tech, break up big banks, ban fracking, end the private health insurance industry, $21 trillion in new taxes. Are you concerned that you’re going to end up breaking some things that don’t need to be broken? That unintended consequences could hurt the people you’re trying to help?

Elizabeth Warren: I see this as, what’s the best way to grow our economy going forward? So, you talk about let’s break up big ag, let’s break up the big banks. You know, that’s enforcing antitrust laws that have been around for more than a hundred years. Unfortunately, for decades now have been under enforced, and let these giants come in who not only scoop up all of the profits, they also undercut wage growth. They undercut innovation in our economy. They stamp out little businesses in small towns. We need some enforcement of our antitrust laws.

John Harwood: But you’re not worried that the scale of all of this is going to have big unintended consequences?

Elizabeth Warren: Well, I think the intended consequences here are pretty clear. When you don’t have just one place or two places that you can buy seed from, there’s more competition in the industry. When you don’t just have one place where you can sell your pork products, there’s more competition in the industry and the individual farmer, the independent farmer, the family farmer has a better chance to make it in this economy. And we could replicate that through one after another.

This really is a fundamental question about how you think the economy works best. Ronald Reagan argued, starting back in 1980, the way it’ll work best is let the rich and powerful get all the tax cuts they want and basically deregulate them – take the cop off the beat so they can kind of get out and do whatever they want. We saw what happened when the banks did that in 2008. They crashed the economy and of course they weren’t so interested in free market then. They wanted a bail out. The problem of course, is that’s not working to grow the economy.

John Harwood: If you did have lesser growth, if you had big declines in the stock market, which some have also predicted, would that matter? Would that be a concern, or would that be an incidental cost on the way to the results that you see?

Elizabeth Warren: I look at this from the perspective of a middle-class family. In the 1930s and ’40s and ‘50s and ’60s and into the 1970s, when the stock market went up, when GDP went up, family income went up. And by the way, union membership went up. They all went up together. In other words, as our country got richer, our families got richer. And as our families got richer, our country got richer. And then starting around 1980, you watched that break apart and wages just flatten out. So, stock market keeps going up, GDP keeps going up, but more and more of the wealth is sucked to a thinner and thinner slice at the top. That’s not working for America, and it’s not working for middle-class families.

John Harwood: Those metrics aren’t particularly important as you see it.

Elizabeth Warren: It’s not a question of importance. It’s that they’ve become divorced from the health of tens of millions of working families across this country. I want to see an economy that isn’t just measured by, and works for, a tiny slice at the top. I want to see an economy that works for everyone. Ultimately, I think that’s an economy that’s more sustainable and an economy where we’re going to see more growth. Can I give you one example around that? Just talked about childcare; when we say to mamas that you can get good high-quality childcare paid for because the billionaires are going to put in a little bit more, think how much productivity that unleashes in our economy.

How many mamas will say, “You know, if I know I’m going to get good high-quality childcare and it’s not going to eat up my whole paycheck, sign me up. I’m ready to go to work”? Think how much more money that puts into local economies. Those federal dollars that we then put into childcare, that’s money into little communities all across Iowa, all across this country.

John Harwood: President Obama said recently that the country is in a mood for improvement but not for revolution. That sounds a lot closer to the Biden-Buttigieg theory of the case than the Warren theory of the case. Is President Obama wrong?

Elizabeth Warren: I see this as we need solutions that are big enough to match the problems that we’ve got. So, I look at the problems. Mamas who can’t work because they can’t afford childcare. Most of our peer nations invest in making childcare available to all kids. We could do that. We could solve that problem and boost our economy. I look at our problem of student loan debt, and how many tens of millions of Americans don’t get married, can’t move out of mom and dad’s home, can’t start their own businesses, can’t move back to a small town where wages are lower.

John Harwood: Didn’t you move in the direction of the Obama view when you offered the two-stage Medicare for All proposal, where basically in your first year you would do what Biden and Buttigieg are talking about on health care and defer the bigger program for the third year?

Elizabeth Warren: Actually, what others are offering is not what I’m offering. I’m offering the most help, to the greatest number of people, in the quickest way possible. So, I’m offering full health care coverage to who 135 million people can get it for free. They can opt in. Others can buy it for a modest price. I’m offering to lower the age of Medicare down to 50 and anyone, if they want to, can buy in so that people can experience what full health care coverage feels like, what it looks like. That is very different from plans that are basically just a slight twist on the current insurance program, which means high deductibles, fees, co-pays and uncovered expenses.

John Harwood: Do you not think the struggles that you’ve had in the last few weeks are caused by a notion that, wow, what she’s proposing, when you laid out the pay-fors on Medicare for All – just too big, too much, too far out there?

Elizabeth Warren: I see it this way. A lot of people said it’s not possible to do health care without raising taxes on middle-class families. I said actually it is and showed how. President Obama’s head of Medicare and his chief labor economist checked all the numbers and said, “We can do this.” I see this very much as what’s within your vision and who you’re fighting for. If you’re just trying to worry about the insurance companies, then it doesn’t look like a great idea. But if you’re worried about middle class families, working families –

John Harwood: You’ve lost some altitude in the last few weeks.

Elizabeth Warren: But what I care about is out there fighting for working families. Keep in mind, across this country, even with people with insurance, more than 30 million people last year didn’t have a prescription filled. Why? Because they couldn’t afford it. Didn’t get the medical care they needed. Why? Because they couldn’t afford it. We can do better than that. No one should face the possibility of bankruptcy because of a bad medical problem.

John Harwood: Mitch McConnell said the other day that he was coordinating strategy for the Senate impeachment trial with White House lawyers. What do you think about that?

Elizabeth Warren: I was appalled. That is, in my view, not the job of the Senate. I read the Constitution and it’s pretty clear. It is the responsibility of Congress to hold a president accountable. No one is above the law. And the Senate, if we receive articles of impeachment from the House, is supposed to have a trial starting immediately.

John Harwood: Lindsey Graham said today, “I’m not even going to pretend to be a fair juror. I’ve made up my mind.”

Elizabeth Warren: We all took the same oath of office. And that oath of office did not say you pledge loyalty to a particular person who is sitting in the White House. You do not pledge loyalty to a political party. You pledge loyalty to the Constitution of the United States of America. And that means we’re going to have a vote soon. And I hope that everyone remembers that oath because we’re going to have to live with the consequences of this forever.

John Harwood: Do you expect any Republican senators to vote for conviction?

Elizabeth Warren: I don’t know. I hope so. Because I hope this is not just about politics. This is about, not only this president, but it’s about the next president and the next president and the next president. As some of the constitutional scholars who were testifying last week said, if this is not an impeachable offense – what the president has done with Ukraine, and dangling U.S. taxpayer money to a foreign government in return for getting that foreign government to do a favor that would help the president politically and personally, not help the United States – if that is not an impeachable offense, then we’re setting up a precedent for presidents not to have to follow the law. That’s not the America that the constitution contemplates. And that’s not the America that we as senators took an oath to uphold.

John Harwood: Senator, thank you so much.

Elizabeth Warren: Thank you so much for having me.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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