In this 2004 interview, four years ahead of the financial crisis that triggered the Great Recession, Elizabeth Warren, who was then a law professor at Harvard, seems to be looking into a crystal ball.
She begins her conversation with NOW’s David Brancaccio by criticizing then-Federal Reserve Chairman Alan Greenspan, for his “happy-face speeches” about American families. “Alan Greenspan, our national economic leader, has stood up for the last four years and told Americans, ‘Borrow against your house. If you can’t close the gap at the end of the month, just borrow against your house’ … That’s really scary financial advice for someone to be giving American families. And what frightens me most is millions of American families have taken that advice.”
She goes on to talk about the problem with too much mortgage debt, saying homeowners were “rolling the dice at the table in Las Vegas… that your income’s going to continue to go up” and worried about the financial industry’s “innovative approaches” that supposedly would ameliorate the effects of a downturn. “We’ve literally, as a country, mortgaged our future.”
“We’re starting to see the costs associated with an industry run wild,” Warren says. “The time is upon us to think a little more regulation again.”