I have just finished reading the autobiography of United States Senator, Professor Elizabeth Warren, titled A Fighting Chance.

I am a bit of a fan of Senator Warren ever since I saw her discussing the causes of the Global Financial Crisis all over US television explaining the culpability of the banks and the hollowing out of the middle class – worth watching here… More recently, she held Wells Fargo to account for a banking scam – described here by Stephen Colbert in such a way that only he can do it (warning – language alert).

In a time of financial and economic uncertainty, Warren’s insights are invaluable on various fronts – as a story that promotes diversity to the need for strong financial regulation. Here are the five messages that stayed with me:


  1. The need to ensure we continue to push for gender and cultural diversity and inclusion – without it we lose unimaginable amounts of talent and resources.

As a young married mother in the 1970s – with an Indigenous background – Warren found it close to impossible to find work in the field of law. It was only through her persistence, family support and a decent degree of luck did she end up finding work and building a career as a law professor, chair of the Congressional Oversight Panel during the banking bailouts and eventually a US Senator.

For every Elizabeth Warren, there are countless women who did not manage to break through the structural barriers and overt discrimination of those times (and let’s not pretend that much of still does not exists). Think of all that wasted talent? Imagine the social, political and economic benefits if we could harness all that talent.

This is why we must continue to support gender and cultural diversity programs!


  1. We need to stop the smooth and easy transition from politics to private industry

One of the themes that emerge in Warren’s book as she moves to hold the major banks to account is that much of the industry is full of lobbyists that have moved directly from politics to banking. These individuals use their contacts to ensure access to the highest level of government and shape policy.

In Australia, this is also common. In fact, as the University of Melbourne PhD Candidate George Rennie notes in The Conversation, of the 538 lobbyists registered by the Department of the Prime Minister and Cabinet at the time of writing, 191 are former government representatives.

This unprecedented access creates a series of conflict of interests and undermines the independence of our representatives.


  1. Transparency and government oversight is paramount

The international non-government organisation, Transparency International, argues that the lurch to secrecy quite simply opens up the potential for corruption. All levels of government must have transparency as the starting position and be subject to oversight.

In Australia, this could be achieved by a federal independent commission against corruption – sadly, something that our politicians seem hesitant to establish.


  1. We should never touch our Capital Adequacy Ratio – and continue to demand the banks pay for their supervision

Being a bank in Australia is a privileged position: it places a private organisation in a position which is essentially financially guaranteed by the federal government. Those employed in the upper echelons of the finance industry are well remunerated. A point that Warren makes is that the financial industry should continue to pay for this privilege – something the financial industry seems to continue to push back against.

One way that this happens is to require banks to keep a certain amount of their capital in highly liquid assets – something known as the Capital Adequacy Ratio.

When I worked in finance, the private banks always complained that it was too high and the money could be better invested towards higher-yielding assets. Thankfully, Australian regulators never succumbed to this pressure and overtime have even tightened the requirements.

Both the Reserve Bank of Australia (RBA) and the Australian Prudential Regulation Authority (APRA) deserve credit for this – and we should ensure that their independence and oversight remain.


  1. The hollowing out of the middle class places our economic and social stability at risk

The Spirit Level: Why More Equal Societies Almost Always Do Better, Kate Pickett and Richard Wilkinson highlight the “pernicious effects that inequality has on societies: eroding trust, increasing anxiety and illness, (and) encouraging excessive consumption”. It shows that for each of eleven different health and social problems outcomes are significantly worse in more unequal rich countries.

Warren describes how specific government policies have combined with banking strategies to increase use of financial products have resulted in a decline of household savings and a related rise in debt. This has created rising levels of inequality that Pickett and Wilkinson warn us against and the middle class is being hollowed out.

To stop this, we need a series of policies that ensure we protect minimum wages, have strong unions, maintain high-quality public goods that are accessible to all (including schools, universities and hospitals) and maintain a progressive taxation system.


Warren’s autobiography reminds us of the need to keep our political and corporate leaders to account. Without this understanding, we risk our social, political and economic well-being.