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Warren: "Fragile" Economy is Tipping to Another Meltdown

Phil Hall
Jul 22, 2019
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Sen. Elizabeth Warren (D-MA) is warning that another economic meltdown that could rival the 2008 crisis is on the near horizon.
 
In an op-ed piece published today on the Medium website, the senator – who is also seeking the 2020 Democratic Party nomination for president – insisted that she “warned about an economic crash years before the 2008 crisis, but the people in power wouldn’t listen. Now I’m seeing serious warning signs in the economy again — and I’m calling on regulators and Congress to act before another crisis costs America’s families their homes, jobs, and savings.” Warren painted a gloomy picture of today’s U.S. economic foundation, which is argued was “fragile” and could collapse easily.
 
“When I look at the economy today, I see a lot to worry about again,” Warren wrote. “I see a manufacturing sector in recession. I see a precarious economy that is built on debt — both household debt and corporate debt — and that is vulnerable to shocks.”
 
Nonetheless, Warren insisted that a crisis could be averted by “by raising people’s wages and by bringing down their costs” as a means of reducing household debt, along with “cancelling up to $50,000 in student loan debt for 95 percent of people who have it, bringing down the cost of rent, providing universal affordable child care and early education for all our kids ages 0–5, and making tuition free at every public technical school, two-year college, and four-year college.” She called for a strengthening of the Financial Stability Oversight Council, arguing that the current council “falling down on the job,” and claimed that her “Green Manufacturing Plan will mobilize our industrial base by making a $2 trillion investment in American green research, manufacturing, and exporting over the next decade.”
 
One area of the economy that Warren did not raise a red flag over was housing. While Warren, a longtime critic of the mortgage profession, reminded her readers that she “called out subprime lenders for tricking unsuspecting families — especially families of color — into refinancing into overpriced subprime mortgages” in 2003 and blamed then-Federal Reserve Chairman Alan Greenspan, Congress, the banks and the federal regulators for failing to heed the danger of the housing bubble. However, her new column made no mention of today’s housing market or the origination and underwriting practices by mortgage companies.