In a recent New Yorker article on Elizabeth Warren and the 2016 election, Ryan Lizza cited Warren’s prescient essay in Democracy’s Summer 2007 issue making the case for a Financial Product Safety Commission.
In the months before the 2007-08 financial crisis, she became increasingly vocal about Wall Street’s mortgage-lending practices and wrote an article in a new policy journal, Democracy, that warned of the dangers of subprime-mortgage lending. The title of the article, “Unsafe at Any Rate,” echoed Ralph Nader’s 1965 book, “Unsafe at Any Speed,” about the dangers of the unregulated automobile industry. Warren called for the creation of a new government agency that would do for financial products what the Consumer Product Safety Commission, created in 1972 by Richard Nixon, had done for toys, appliances, and other items.
“It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house,” she wrote. “But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street.”