Although she took her time doing it, Elizabeth Warren seems to have finally convinced the panting obsessives of the Washington press corps that she isn’t going to run for president next year. Her decision is a big loss for Democrats, because having Warren in the field would have a number of salutary effects.
If Warren were to challenge Hillary Clinton it would help the party, because a competitive race would force candidates to start building campaign organizations in early primary and caucus states, such as Iowa and New Hampshire, that are also swing states in a general election. The importance of building this infrastructure is a big reason why some Democratic insiders have been urging Clinton to declare her candidacy now and start campaigning, even without any real opponent.
But the biggest benefit of a Warren challenge is that it would force an intra-party debate about the direction of Democratic policy in the post-Obama world. Why is Warren necessary to spark this discussion? Because the current roster of likely or potential candidates — former Maryland Governor Martin O’Malley, Vermont Senator Bernie Sanders, former Virginia Senator Jim Webb — poses so little threat to Clinton that she probably will not feel compelled to offer much detail about what she stands for or how she will govern if elected. As H.W. Brands, a University of Texas history professor and presidential biographer told Bloomberg News this week, “Less is known about Hillary Clinton’s positions on domestic issues than any other leading candidate since Dwight Eisenhower.”
Warren is the Democrat best positioned to draw out Clinton in three areas critical to the future of the Democratic Party. An early fixation of the Obama administration was striking a “grand bargain” with Republicans along the lines of the Simpson-Bowles Plan, which would reduce the deficit by cutting entitlement programs such as Medicare and Social Security. Warren, on the other hand, wants to expand Social Security and has condemned the cost-cutting mechanism at the heart of Simpson-Bowles. Clinton was at the State Department during the most heated phase of this debate and did not take a position. But liberals have their suspicion about where she stands: The “Bowles” in Simpson-Bowles is her husband’s former chief of staff, Erskine Bowles.
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On trade, Warren has aligned herself with labor interests in criticizing the Trans-Pacific Partnership, a proposed agreement to lower barriers and link markets throughout Asia and the Americas. As secretary of state, Clinton helped shape the TPP, which she promised in her memoir would “benefit American businesses and workers.” Warren, citing the damage inflicted on the US manufacturing sector and middle class by past agreements, has called the TPP “alarming” and warned that it may force US payouts to overseas firms.
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But the biggest argument would undoubtedly be over whether the Democratic Party should embrace the kind of economic populism for which Warren has become the standard-bearer and Clinton something more like a villain, based on her Wall Street ties and her husband’s record as president. Bill Clinton, of course, scaled back bank regulation, thus helping to usher in the financial crisis, and relied heavily on Wall Street figures such as former Goldman Sachs chairman Robert Rubin to shape his economic policies.
Hillary Clinton’s protean tendencies make it hard to know exactly where she will come down on economic and financial-regulatory matters. She supports standard-issue Democratic causes like raising the minimum wage and providing equal pay for women, and has recently — and awkwardly — mimicked a signature Warren line about how rich people don’t get that way on their own.
But Clinton has also taken positions on bankruptcy legislation that run counter to Warren’s. It’s unclear whether she would use labor laws to make businesses pay more workers overtime, as Warren and other liberals want to do to raise middle-class wages. And Clinton remains close to the kind of Wall Street figures whom Warren generally finds toxic. Clinton is sure to rely heavily on Wall Street to bankroll the $1 billion campaign that each nominee is expected to have to run.
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As the recent controversy over Clinton’s private e-mail account demonstrates, her instinct is to do everything in her power to avoid exposing herself to scrutiny. That instinct will undoubtedly carry over to the primaries — unless someone like Warren forces her hand.
Joshua Green is national correspondent at Bloomberg Businessweek. Follow him on Twitter @JoshuaGreen.