Which Political Party Is Better For the Stock Market? Senator Elizabeth Warren Pt 2

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2:18I'm Nicole Lappin, the only financial expert you don't need a dictionary to understand. It's time for some money rehab.

2:33If you got part one of my conversation with Senator Elizabeth Warren yesterday, you know that we went deep on insider trading in Congress. The current proposal that would make the system a whole lot more fair and what it means about our system if the proposal isn't passed. Well, today we're talking about the most nuanced financial issues of the current moment. We talk about trading apps like Robinhood and the line there between regulation and financial freedom. And we also talk about the new narrative that Democrats are anti-business and the line between governance and free markets. There are a lot of lines here, and it's important to get into all of them.

3:05I'll also ask her about some of the most urgent headlines in American economics today. Billionaire influence, the vibe session, how to help the 99 percent get ahead, and whether or not she's ready to throw her name back in the ring for president in 2028. I said this yesterday, but it bears repeating. I know we've got listeners across the political spectrum. You might not agree with everything Senator Warren says, and that's OK. But remember, this is someone who used to be a Republican, who spent decades studying bankruptcy and financial markets, and who has taken on some of the biggest names on Wall Street.

3:38And I genuinely believe her when she says she cares about the middle class and helping everyone afford the American dream. So take with that what you will. And as always, if you have any thoughts, I want to hear them. Hello at MoneyNewsNetwork.com. Now, here's part two.

3:57When we talk about the stress on American families, do you know one of the biggest expenses that's out there? We don't count. And that is how much you're spending on credit cards. How much are you paying on debt on student loans? How much are you paying all your debt? It's actually left out of the calculation. That's nuts. And the difference between caring, as you know,$5 ,000 of debt at 5 % and$5 ,000 of debt at 36 % is the difference between whether you've got a shot at paying it down and whether or not you're just overwhelmed and you're going to be in debt for as far into the future as you can see.

4:44I alluded to the fact that I know this all too well. I was in credit card debt myself, which is why I started this work to try to help people who might be struggling as well. And we don't learn this stuff in school. But once I got out of debt, I was really hell bent on investing and growing my wealth. Yes. You have some beef, Senator Warren, with Robin Hood. Tell me about that beef. No, no. Because, you know, this idea of democratizing investing is really important. I'm first generation American. The idea of investing was brand new to me. So starting investing for the first time and seeing my money grow for me was very exciting.

5:23And it should be. I love, love, love this. And I actually want to make a point here that a lot folks don't always link right on to. Paying down debt when you have credit card debt, I'm talking about short-term debt like that, paying down that credit card debt and savings really are kind of like two ends of the teeter-totter, depending on where you have to start this. When you're paying down debt, you are putting yourself in a much stronger financial position. And whatever you've managed that you can take out of your daily spending so that you can pay down that debt, Yes, I give exactly the same advice.

5:58Roll straight in to investing it. Roll straight in to savings it. Now, I'm also very big on consumer protection and savings. I very much believe in democratizing investment. I love the phrase you use for that. I just want to make sure everybody's following the rules and that nobody gets to hype things where there's some shenanigans going on behind the curtain so that those who are in the know get to make out really well and everybody else is paying a high price for that. That's my only concern. Where is the line, though, between democratizing wealth opportunities and potentially regulating? So you're essentially saying that Robinhood, for example, does all sorts of pay for order flow behind the scenes, which it sounds like you're alluding to, or confetti on the app that makes it much more exciting to take on more risk.

7:04So what's the answer there? I mean, we let people drive cars even though they can get into an accident, but we have licenses and seatbelts and airbags. We don't let anybody drive a car without brakes. We just literally don't do that. We don't let anybody get on the freeway and zoom that car up to 60 miles an hour and not have a set of brakes on it. We put regulations in place. And here's always a deal for me. Most of the regulations are not that fancy. They really are about things like make sure your customer understands fully what's going on here and a bunch of tricks and traps you just can't get to do because you're fancier and know how all the little quirks and twists work and you can hide it.

7:51That there has to be in the same way you go to the grocery store, you buy stuff at the grocery store, you don't run any scientific tests on what it is, the juice you're drinking or the can of soup that you open. You don't run tests on that stuff. You count on the fact that there is someone out there known as your government that has run a set of tests that made sure the kitchen it was put in was clean and made sure that the chemicals they put in there, things that were going to kill you, and that if they were going to put peanuts in it, that they had to put a big warning sign on it, right? And in fact, we have, and I love that we have this, We have fights sometimes over that.

8:30And we say, whoa, you're letting them put these chemicals in this stuff. And I don't like this. This is why organic foods grew up as a way to say, you don't have to worry about that stuff. We do that with food because it makes no sense to ask every person who consumes food to go run that test. I want the same basic things in place for investors. You want to sit down and make a decision between whether to drink juice or eat soup. Totally up to you. You want to make a decision whether or not to invest in clothing manufacturing or to invest in some new outfit that's going to have a new process for developing steel.

9:13Good for you. You make those decisions on whatever information you want to. But what you shouldn't have to run the tests on, because you actually can't see it, is that somebody behind the curtain is charging a little off the top for this and pushing a little of that, all to make themselves richer at your expense. That's all I'm looking for. So a warning label, like on cigarettes. I love markets. And sometimes warning labels are the right thing. But sometimes it's you just don't let people cheat other people. We don't let people put arsenic in soup and juice. We shouldn't let people run scams behind the curtain that the investor can't see.

10:03And it's not good enough to say, hey, there may be somebody behind the curtain running a bunch of scams. No, we should just say there are certain kind of scams. You just don't get to run. Because if we play a fairly clean game, if we make sure folks are playing a fairly clean game, more people can invest. And more people can invest with confidence that your only mistake you have to worry about is, oh, you decided to go with clothing instead of steal. Not, I trusted somebody who was stealing from me. That's the mistake. That's what the cop on the beat is there for. So you don't have to worry about that one.

10:48Well, I don't think a lot of people realize how much you love markets. I do. And you left the Republican Party years ago because you said they stopped being the party of markets, which I think is so interesting with more of a shift now in the Democratic Party, more to the left. Can you explain how Democrats, you believe now, are more the party of the markets? Oh, absolutely. I think Democrats are the party of the markets precisely for the reason we just described. Let me do antitrust law. Antitrust law, as you know, was passed more than 100 years ago, big parts of it. And the bottom line just says, you can't grow a monopoly.

11:30And if you do, even if people like you, if you are giant and start using your giganticness in order to stop out all the little businesses, ultimately the market fails. And when I say the market fails, it's not just the monopolist can charge higher prices. It's also, we actually know this, statistically. They've lower wages. And here comes the best part, they quit innovating. And you can actually go back through history and look at this. How many giant companies that were Alcoa was going to be the aluminum company for the next billion years? And it turned out they actually just kind of quit innovating.

12:12Boeing, right? They just quit innovating, right? They got big, they got to be dominant, and then they quit innovating and producing a better product. So Democrats, my favorite, Lena Kahn, the head of the FCC, says we're just going to enforce the already existing antitrust laws so that big tech can't stop out the competition. so that if you're an app developer, you actually will have multiple places to go to try to sell your app and that they can't demand that they get the lion's share from the app developer. If you believe in markets, you recognize that having a cop on the beat, not to pick winners and losers, not to tell you that that's a cool game and that's not a cool game, that's for others to work out.

13:07But to say you can't have one giant in the field knocking out all the small businesses and the startups, you can't have private equity move in and buy up every damn veterinary practice in the state and then triple the prices when folks come in to have their pets taken care of. You and I could use the examples on and on through this. And that, to me, is really pro-business because it keeps the competition alive. Look now at what's happening in this Trump administration. There are two big economic moves going on right now. The first is consolidation. Just watching how many in the whole entertainment industry, right?

14:01It's just moving into one giant industry. What's that going to do? Your access to movies and sports, price is going to go through the roof. They got no reason to make new stuff. Just be the giant and stomp out the competition. So part of what's happening just over the last few months since Trump has come in has been it is open season for giants to merge and become even bigger giants for private equity to come in and do roll-ups. And the other thing is to engage in practices that undermine competition, corruption. Look, if the way you get ahead in America as a big corporation is to go spend a million dollars for a dinner with Donald Trump, is to put a billion dollars into his crypto doodah is to offer a bribe to the head of ICE, if that's how you get ahead in America, that doesn't make markets stronger and we don't get the benefits of markets.

15:14So a world in which mergers have taken off like crazy and corruption is swirling around us in ways we've never seen before. It's not pro-market. The people who are fighting against that are Democrats. The Republicans in Congress won't even say boo about it. Who do you think is actually leading the Democratic Party right now? Right now? I think it's everybody. And I actually think that's right at this moment. We've got 47 Democrats or independents who are with the Democrats in the United States Senate. We need every one of them, all hands on deck. The Republicans are running out of money to fund the government.

16:00We got to pass a budget by this September 30th or the government shuts down. But they're going to need some Democratic votes for that. And the Democrats have said, look, you want our votes. Let us tell you what matters to us. You've got to roll back some of those health care cuts that you put in place in the big, beautiful bill. About 15 million people are about to lose their health care coverage. Almost everyone in America who has private insurance is about to see their premiums go up because of the Republican cuts to health care. rural hospitals around the country are literally already closing.

16:46And medical research, cancer research, has just been shut down in dozens of labs around the country. All of those were ways that the Republicans wanted to save a trillion dollars so they could do more tax breaks for a handful of billionaires and billionaire corporations. And so Democrats are saying, look, we're not asking you to spend new money. We're not asking to expand health care access. What we're asking for is if you want our votes going forward right now, you've got to roll back those health care cuts. We're not even saying anything about the taxes, just roll back the health care cuts. And right now, Donald Trump has told the Republicans, don't even talk to the Democrats.

17:38So if there's not a true leader in the Democratic Party now, some say AOC, some say Gavin Newsom. What about you? Will you be running? Or president? No, no, no. Nope. I'm really in this moment. I am in the moment when health care for millions and millions of Americans are on the line. I'm in this moment it. When Donald Trump was saying a year ago, right now, just put yourself back a year, he was out there saying over and over and over that people should vote for him because he would cut your costs on day one, cut the cost of groceries, right? Cut all the costs that families were experiencing on day one.

18:22Those were his words. And here we are on day 240-ish, and the cost of groceries is up. The cost of utilities is up. The cost of housing is up. The cost of healthcare is already up and about to take another leap. The cost of back to school shoes is up. The cost of backpacks is up. The cost of baby strollers is up. Costs are up, up, up for families. I've spent my whole life on fighting for America's middle class. And to watch now how families are so stressed financially. Billionaires doing great. Even multimillionaires are doing great. But just middle class, working class families are struggling so hard, and it's about to get a whole lot harder.

19:21That's the fight I'm in, and that's the fight I think right now really tells us about the direction of our country. Donald Trump and the Republicans in the Senate sure seem to want a country that just works better and better for a smaller and smaller number at the top are a country that really opens up opportunity and opens up markets for working people everywhere.

19:59Money Rehab is a production of Money News Network. I'm your host, Nicole Lappin. Money Rehab's executive producer is Morgan Lavoie. Our researcher is Emily Holmes. Do you need some money rehab? And let's be honest, we all do. So email us your money questions, moneyrehab at moneynewsnetwork.com to potentially have your questions answered on the show or even have a one-on-one intervention with me. And follow us on Instagram at moneynews and TikTok at moneynewsnetwork for exclusive video content. And lastly, thank you. No, seriously, thank you. Thank you for listening and for investing in yourself, which is the most important investment you can make.

20:40Thank you.