In January of last year, Elizabeth Warren went on The Daily Show and did what was then, and still is, that rarest of things: She gave a cogent, compelling, almost crystalline account of the financial collapse. It wasn’t the first time she had delivered this story, but her task seemed particularly urgent that night. A Republican named Scott Brown had just won Ted Kennedy’s old Senate seat, depriving Democrats of a filibusterproof majority and prefiguring the bloodbath the party would take during the midterms. Barack Obama had been in the White House for a little more than twelve months, and already it appeared that he was losing control of the political narrative.
Warren tried to wrest it back. The problems started not with Obama, she said, but in the eighties, when the financial regulations that had been put in place after the Great Depression began to be repealed. This allowed “the big financial firms, the titans of Wall Street,” to “start selling ever more dangerous mortgages, ever more dangerous credit cards, ever more dangerous car loans,” which they then repackaged and sold again, producing, in addition to huge profits and bonuses, huge risk. After the market took a downturn, “all that risk that’s been built into the system starts to come home, somebody’s got to pay,” and “those same CEOs on Wall Street basically turn around to the American people and say, ‘Whoa, there’s a real problem here, and you better bail us out or we’re all gonna die.’ And so we did, that was TARP. And now we’re about to write the last chapter in this narrative.”
The story could have two endings, Warren said: one that favored “the CEOs on Wall Street” or one that turned out okay for the rest of us. “This is America’s middle class. We’ve hacked at it and chipped at it and pulled on it for 30 years now, and now there’s no more to do. Either we fix this problem going forward or the game really is over.” Jon Stewart, who had mostly kept quiet during Warren’s spiel, seemed momentarily shocked. “I know your husband is backstage,” he told her, “but I still want to make out with you.”
It was performances like that one that helped propel Warren, a Harvard law professor who was then chairing the congressional panel that oversaw TARP, higher into the political firmament. And as Obama’s star waned in the eyes of many liberals, hers rose in inverse proportion. That the story Warren was telling seemed increasingly destined to end more as she’d feared than as she’d hoped only served to boost her standing. Warren’s remarkable powers of explanation—and her willingness, even eagerness, to take on Wall Street—were precisely the qualities that the president seemed to lack and precisely what so many liberals were yearning for. “What Liz can do, maybe better than anyone walking the Earth, is talk about financial markets and the complexities of our economic system in a language that people understand and that resonates with them,” says Jared Bernstein, a former economic adviser to Joe Biden.
Warren was so good at this that, although she was relegated to the fringes of the bureaucracy—first running the relatively toothless TARP PANEL and then advising Obama on getting the Consumer Financial Protection Bureau off the ground—she cut the public profile of a cabinet official. Stewart, Charlie Rose, and Bill Maher frequently invited her on their shows to talk about the economy; online petitions urging Obama to appoint her head of the CFPB garnered hundreds of thousands of signatures. Warren’s ubiquity became a sore spot for some Obama officials, who especially didn’t appreciate the fact that she was often as willing to criticize Democrats as Republicans. Her public grillings of Treasury Secretary Tim Geithner when he appeared before her TARP panel—“A.I.G. has received about $70 billion in TARP money, about $100 billion in loans from the Fed. Do you know where the money went?”—were political theater at its finest.
The result is that now, in large swathes of blue America, Warren’s star actually eclipses Obama’s. Her announcement in September that she would run for the U.S. Senate—that she would seek to take back the seat Scott Brown won in 2010—has been greeted by Democrats with the sort of passion and energy not seen since that heady night in Grant Park three Novembers ago. A grainy YouTube video of Warren speaking in a supporter’s living room became such a viral sensation that the Washington Post columnist E. J. Dionne Jr. deemed it “the declaration heard round the Internet world.” And while the presidential race is undoubtedly the most important election of 2012, Warren’s campaign is shaping up to be the most anticipated, as it affords liberals a chance to prove that the path that Obama pointedly did not take—the story he failed to tell for so long—can win at the ballot box.