MS. DIANE REHMThank for joining us. I'm Diane Rehm. Elizabeth Warren says she never expected to go to Washington, nor did she particularly want to. But now, as a first-term U.S. senator from Massachusetts and a member of the Senate Banking Committee, she's in a position to push for the kinds of policy changes she's long been advocating, a government that serves not giant banks but the needs of struggling families.

MS. DIANE REHMIn a new memoir titled "A Fighting Chance," Elizabeth Warren describes the life experiences that set her on a political path. Sen. Warren joins me in the studio. I hope you'll join as well, with questions, comments. Call us on 800-433-8850, send us an email to drshow@wamu.org, follow us on Facebook or send us a tweet. Sen. Warren, it's a pleasure to meet you.

SEN. ELIZABETH WARRENIt's good to be here.

REHMAnd it's really -- I was looking at the records, and, of course, you were on the program back in 2000.

WARRENThat's right. We were talking about families in financial trouble.

REHMExactly. And you know that story very well, personally.

WARRENI do.

REHMGo back to your childhood.

WARRENSo, you know, like a lot of families, we had our ups and downs when I was growing up. And by the time I was 12, my daddy was selling carpet. My mom was a stay-at-home mom. I was the baby. I was the surprise. And my three older brothers were all off in the military when my daddy had a heart attack. And it was a long period with no money coming in. The bills piled up, we lost the family station wagon, and we had our toes right on the edge.

WARRENWe were about to lose our home. And I remember the day my mother pulled her best dress out of the closet, pulled it on, put on her high heels, walked to the Sears, got a minimum wage job, and it was enough to save our home. I learned early on about how people can work hard, they can play by the rules, and they can still just take a hard smack. And I also learned early on about how we fight for our families.

REHMYou know, as I was reading the first part of your book, I was struck by the similarities. My father had a heart attack, at age 12, as I was.

WARRENIs that right?

REHMMy mother, a stay-at-home mom, had to go to a department store and get a job monogramming at minimum wage, absolutely same thing and how, because of their devotion to each other and to keeping my sister and me together and fed, life went on. And that's what happens when you've got a situation like that. What happened to you as a result?

WARRENYou know, I think part of it was I learned about fighting. I learned about what we do. We fight for what we believe in.

REHMAbsolutely.

WARRENWe fight for what we love. But I learned something else in this one over time. You know, there was no money to send me to college.

REHMRight.

WARRENBut I ended up going to a commuter college that cost $50 a semester. And how could you go to a school that costs $50 a semester? How could a school cost $50 a semester? It opened a million doors for me. And that's because I grew up in an America that was investing in kids. I got chances that today are closed off to too many kids.

WARRENAnd so this book is very much a personal story, but it's also an eyewitness account to the changes in America. And my -- the sense now that what's happened is that the playing field is tilted. It's tilted against our kids. It's tilted against hard-working families. Anybody who falls a little behind, who stumbles, has a terrible time getting up.

REHMAnd why do you think that is?

WARRENSo the way I see this, what's shifted, is that Washington has changed these fundamental policies, the questions, like minimum wage. Back when my mom had a minimum wage job, back in the '60s, back in the '70s, a minimum wage job would keep a family of three above water.

REHMIndeed.

WARRENToday, it won't keep a family of two out of poverty. So policies in Washington, minimum wage, support for education, investments in the future, you know, the things that build a big future, infrastructure, the investments in research, NIH, NSF, all of that has shifted away so that we're not building that same kind of future for our kids today. Instead, Washington works for those who hire armies of lobbyists and lawyers. It works for big banks, big corporations, billionaires. They make sure that every rule works for them. It's just not working so well for families.

REHMAnd in the book, you talk about the aftermath of the 2008 financial meltdown as a clear example of who gets another chance and who lands flat on their backs.

WARRENBoy, no kidding. You know, and I talk about this one just up close and personal, about the families who got tricked, who got trapped, who got knocked out of their homes, and, look, there were people who took on risks they shouldn't have taken on. There were people…

REHMAbsolutely.

WARREN…absolutely did the wrong thing, but there were also a lot of people who got cheated, who got fooled, who signed on to mortgages that had a one in five chance of costing them their homes that they already owned. They got caught in refinancing scams. And so we hit this big crisis, and the big financial institutions stumbled. Millions of people are being pushed out of their homes. And what happens? A $700 billion bailout that is aimed almost exclusively at the top dozen financial institutions and how to make sure they can survive, they can get back on their feet, on a no-strings-attached basis.

REHMHow important was that versus how important it might have been to do that bailout differently?

WARRENWell, you know, that's the key to it. It's not that we should have stood by and let this economy go over a cliff and crash and burn. That absolutely would have been the wrong answer. The difference was that the Treasury Department started shoveling billions of dollars out the door to a handful of financial institutions, and they did it on a no-strings-attached basis.

WARRENSo they could have said, we're going to stabilize those banks that need help, but here's the deal, you have to -- you have to help out those homeowners who are in trouble. You've got to make sure there's still plenty of money going to small businesses so that they can keep their doors open, so they can keep people employed. You are going to have to change your business model and not build it around tricking and trapping people. You've got to wipe out your shareholders. Look, there should be some accountability. The...

REHMWipe out the shareholders?

WARRENYes. And the CEO, they don't get the corner office when they preside over a crash like that. Look, nothing focuses the attention like saying, not only will your company pay, but if you lead this company over a financial cliff, you're going to lose your fancy job.

REHMWhat do you think of the role Hank Paulson played and the role Tim Geithner played?

WARRENWell, as I talk about both of them in the book, my view was they focused much too much on protecting the tender fannies of the largest financial institutions.

REHMBecause…

WARRENYou know, I often ask myself that question. Why the difference? Why not the focus on grassroots, on the economy, on what was happening to homeowner and people out of work and small businesses? Even small banks, small banks who were the lifeline for many small businesses and who lost their ability to lend, why not the focus there? And I've often just seen this as -- these are just completely different world views that Secretary Paulson, Secretary Geithner see the world through the lens of the biggest businesses, the biggest financial institutions in the world.

REHMEvery single day, practically, when we talk about the financial situation in this world and the loss of the middle class, the number of people in poverty, people call and say, how come nobody went to jail…

WARRENYeah.

REHM…over this? Do you feel that same way?

WARRENOh, I talk about this in the book over and over. I talk about -- because I try to give the account of going through this, how I kept expecting any day, just any day now, there'll be indictments, there'll be -- you know, we'll have the perp walk. People will go out in handcuffs. And it never happened, never.

REHMAnd why do you think it hasn't happened?

WARRENBecause I think this was always about saving the biggest financial institutions and treating that crisis. They treated it like it was a hurricane, you know, like it was just some natural force of nature, not like something people did. This was about -- these were about decisions that CEOs made, that big corporations made.

WARRENThey figured out that they could build a profit model around tricking American families, around trapping them into financial products that were going to cost them their homes. And no one ever called that out. It was not just an economic issue. It was a moral issue to stand up and say that was wrong. It was so wrong that there is a price to be paid for it.

REHMU.S. Sen. Elizabeth Warren, her new book is titled, "A Fighting Chance." We are going to open the phone shortly, 800-433-8850. Send us your email to drshow@wamu.org. I look forward to speaking with you.

REHMAnd welcome back. U.S. senator from Massachusetts, Elizabeth Warren, is with me. We are not only broadcasting this on NPR across the country, around the world, but we are video streaming as well. So you can go to drshow.org. You can click on video streaming and see the program as well as hear it.

REHMHere's our first email from Patricia who says, "It's always a pleasure to hear Sen. Warren. With the distinct possibility of the Republican Party taking the Senate, what does this mean for those of us not among the 1 percent trying to have a decent life in this country? What will happen to Social Security and Medicare? There are a very few moderates in the Republican Party. I'm a naturalized U.S. citizen who saw the U.S. as the land of opportunity for all. Now I have my doubts."

WARRENWell, Patricia, let me put it this way. I'm going to be out there fighting every day from now until Election Day so that we can hold onto the majority in the United States Senate so that we can keep Democrats there because I believe that this is really -- our question in the United States Senate, in Congress, in Washington right now is really, whose side are you on? Are we here just to help the richest and the most powerful protect every privilege for themselves? Or are we here to give all of our kids a fighting chance?

REHMAnd let me give you a very specific example of that. We just introduced legislation yesterday to reduce the interest rate on outstanding student loans. So we've got young people out there -- actually, it goes through all age groups who are dealing with student loans. There are about 40 million Americans who are dealing with student loans right now. Many of them have interest rates at 7 percent, 8 percent, 9 percent, even higher. And the total of those outstanding loans is even greater than credit card debt.

WARRENThat's right. It's $1.2 trillion. And in less than a decade, the amount of student loan debt that kids carry on average has gone up by 71 percent. So this is a problem that is exploding. Cost of college is going up. For families that can't afford to just write a check up front, you've got to borrow. But here's the deal on the borrowing.

WARRENThe United States government charges interest rates that not only pay back the cost of the loan and the bad debts and the administrative fees. They charge nearly double, nearly triple, sometimes even more in order to produce extra revenues to run the government. So basically our kids are paying an extra tax, the ones who can't afford to pay for college up front.

REHMHow can that be? How is it...

WARRENI know.

REHMHow is it that the American people have not been informed of the way these interest rates are imposed?

WARRENSo this is the part that I think goes to the heart of it. College students, families that are trying to send a young person to college or somebody who's gotten out and is out there struggling with student loans, they don't have an army of lobbyists. They don't have an army of lawyers to blanket Capitol Hill and say, this is a big, big, big, big deal. Instead, what we have is Congress says -- right now, U.S. Senate Republicans say, well, yeah, you could lower the interest rates, but how are we going to pay for that because we've already pre-spent all that money coming in?

WARRENSo what we've proposed is that we say, fine, we'll put the Buffet rule in place. That means you make sure that billionaires pay at least as much in taxes as their secretaries. And that's how we'll pay for reducing the interest rate on student loans for all our kids. And for me, that goes right to the heart of it. This is a question about who we are as a country. Are we going to invest in billionaires by protecting every one of their tax loopholes? Are we going to spend exactly that money by investing in young people who are trying to get an education?

REHMSen. Warren, you were an early advocate of the Consumer Financial Protection Bureau. How is it operated today?

WARRENOh god, I love this. So I talk about this a lot in the book about the idea behind it. I talk about setting my own kitchen on fire multiple times.

REHMHow did you do that?

WARREN(laughs) Well, partly, I did it with toasters. That was one of my weapons of choice. And I talk about the fact that back in the '70s, I tell the story about one morning flipping on the little toaster oven, four pieces of bread in there and, of course, immediately forgetting what else I was doing. I have a little toddler, and I'm there. And I'm going to cook breakfast and trying to do 15 other things at once.

REHMRight. Right.

WARRENAnd all of a sudden, I look over, I pull the toaster tray out, and these four pieces of bread are flaming. I don't mean they're just smoking, I mean flames leaping in the air. Now, I immediately had a thoughtful response. I screamed.

REHMThat helped.

WARRENI screamed -- of course it does -- and threw the tray at the kitchen sink. Now, three pieces of toast went into the sink. One went high and set the kitchen curtains on fire. I picked up Amelia's -- she was sitting at the breakfast table -- pick up her cereal bowl...

REHMHow old was she then?

WARRENShe's about three.

REHMOK.

WARRENThrew her cereal bowl at the kitchen curtains.

REHMWith milk in it.

WARRENThat's right, milk in it, helped douse it, took a deep breath, thought, wait a minute, wait a minute, you know, let's get under control here, look over at the toaster, and the toaster itself is smoking and shooting little flames out.

REHMWow. Wow.

WARRENNow, here's the thing -- and I talk about finally bringing it up. I think this was the year my daddy gave me a fire extinguisher for Christmas. Oh boy. But here was the deal. Roll forward 30 years. It's not possible to buy a toaster oven and in America that today doesn't have an on -- back then, they only had an on/off switch, so on meant on. And they stayed on until you set fires, until the toaster melted, until you set your house on fire. Thirty years later, they have little timer switches. So they're on for a little while, and then they click off.

REHMRight.

WARRENSo this will not happen to distracted mothers or anybody else. So I thought about this, that, by the early 2000s, it was not possible to buy a toaster in America that had a one in five chance of bursting into flames and burning down your house.

REHMOne in five.

WARRENFive. You couldn't do it, couldn't buy it because they had safety switches, but here was the deal. You could buy a mortgage, that is, refinance your home with a mortgage that had a one in five chance of costing the family their home and moving them out on the street, so why the difference between the two?

WARRENAnd the answer was, we had a government regulatory agency that made sure that nobody sold toasters that had a one in five chance of bursting into flames but no regulatory agency to make sure that mortgages or credit cards or payday loans or bank fees didn't have the kinds of hidden tricks and traps, including those that could cost a family their home. So that was the idea behind the consumer agency.

WARRENNow let me tell you one quick thing about that agency. I go all the way through in the book, the fight to get it, the day I got the call that it was dead, when we got it, helping set it up. That little agency has been in place for a little over two years now. It has already returned more than $3 billion to American families...

REHMHow?

WARRENIt has stayed with the credit card companies, for example, that cheated people. I don't know any other way to say it. They put these products, these add-ons on your credit card, billed people for them for months, sometimes for years. The consumer agency came along and said, wait a minute, people didn't sign up for these things. You can't just charge people on these. They made the credit card companies send checks back to these people.

WARRENThey made mortgage companies send checks. They're doing it throughout -- starting throughout financial services. So think about this. Today American families have more than $3 billion back in their pockets that they had been cheated out of by credit card companies and mortgage companies because they've got a little agency now that fights on their side.

REHMWould you have wanted to be the head of that agency?

WARRENOh sure. And...

REHMAnd...

WARREN..I talk about this in the book. I was disappointed when I wasn't asked to stay.

REHMHow did you find out you weren't going to get the job?

WARRENWell, remember the banks fought this agency from the get-go. At one point, they were spending more than a million dollars a day to lobby against financial reforms -- they did that for over a year -- to lobby against financial reforms, and specifically against this agency. So when the agency finally did get passed into law, which I very much want to give credit to President Obama. He stood up for this agency. Even when his own advisors were ready to throw it under the bus, he was in there and said, we're going to get this agency.

WARRENWe got the agency passed into law. Well, let's face it, the banks didn't just say, oh, well, OK, we lost. Now we're going to go along with this. They're still fighting. And their friends, the Republicans in the United States Senate, pre-rejected me, said, we're not going to have -- we're just not going to have someone new to come in and run this agency -- didn't want me.

REHMAnd how did you get that word?

WARRENWell, I partly, of course, was just following in the news what the Republicans were saying, but part of it came from the president himself.

REHMElizabeth Warren, U.S. senator from Massachusetts, her new book is titled "A Fighting Chance." And we are going to open the phones in just a moment and take your calls. You got some advice from Larry Summers who said to you over dinner one evening, it's better to be an insider than an outsider, but one rule is you don't criticize other insiders.

WARRENThat's right.

REHMYou've just talked about the Republicans and how they have right along made life difficult, perhaps not just for you, for others. What is it like being on the inside? Is it any fun considering the fact that you've got knocking heads together constantly? The American people see nothing happening on Capitol Hill because of this total split between Republicans and Democrats.

WARRENSo the way I see this, this is the fight we have to have. This is our moment in history. And this country will either be a country that works great for those who have money and power, who can hire all the lobbyists in Washington they want, and not work so great for everyone else, or we can be the kind of country we used to be when we built a great and strong middle class, when every policy we thought about in Washington was about how to strengthen the middle class, how to create opportunities, how to build a future for our children. We are at the crossroads as a country. And this is the fight we must have.

REHMAnd you're listening to "The Diane Rehm Show." Yesterday on this program we were talking about the battles at the legislative -- state legislative levels and the fact that people are not coming out to vote in those early elections. If they don't vote and if they don't pay attention to what's happening at the state levels, that is going to find its way up to the U.S. Capitol. What can you say to people to encourage them to find out what the issues are, to understand what each party stands for about each candidate and what they stand for?

WARRENSo first we have to remember what's on the line. Like I said, the rich and the powerful, boy, they make their voices heard here in Washington loud and long. The rules work for them. They've got the advantages of concentrated money and concentrated power. What's on the other side? What's out there for families? All that's on the other side are our voices and our votes. If we use them, we can level this playing field. If we don't, we won't. If we use our voices and our votes, we make sure that our kids will get a fighting chance.

REHMWhat have been the toughest lessons you've learned since you became an insider?

WARRENSo I have to say...

REHMYou don't feel like...

WARRENIt's going to be a long time before -- I don't think I'm going to hit that insider stanza. Well, come on Diane, this is the continuation of my life's work. You know that. I was here many years ago to talk about my work about what was happening to America's middle class. This is the same set of issues I've been working on for 25 years. I've just watched it get worse and worse and worse year by year. And I just keep trying to find the tools to fight with. So I love being in the Senate because I've got more tools to fight with.

WARRENLet me give you an example. There are a lot of tools in the toolbox. So we think of Congress as a place where you pass laws, and it certainly is. And I've got a student loan bill out there that a lot of us are working on that would give kids a fair shot, a really good bill. Minimum wage, I'm out there fighting on minimum wage, another one that would give families a fair shot.

REHMDo you want to see the president's idea of a minimum wage, $10.25?

WARRENI want to see $10.10.

REHM$10.10.

WARRENThat's where we're headed, $10.10. We're headed there on minimum wage. And I think that's exactly the kind of thing we can do. But let me give you an example. Accountability for the biggest financial institutions. Big financial institutions should not be able to break the law and just walk away. So just basic accountability.

REHMBreak the law.

WARRENThat's right. There's a lot of law out there already. The key, as I've come to understand, is getting the regulators to pick up the law and use it to call out wrongdoers, to hold them accountable, to make sure they follow the rules.

REHMAnd the regulators you're saying aren't doing their jobs.

WARRENI -- they clearly, clearly have not been doing their jobs. And that's just undeniable that not only did the banks run wild during the '90s and the 2000s, but the regulators let them do it. So one of the opportunities I now have -- I sit on the Banking Committee in the United States Senate -- is with my colleagues we have oversight over the regulators. So getting the regulators to do their jobs is one way that we start moving this big battleship in a little different direction.

REHMUnless you lose the Senate. We're going to take a short break here. And when we come back, it'll be your turn to ask the questions, make the comments, 800-433-8850. Stay with us.

REHMAnd welcome back. It's time to open the phones, 800-433-8850. First to Jonette (sp?) in Fort Lauderdale, FL, you're on the air. Elizabeth, you'll need to put those headphones on. Here we go, go ahead, Jonette.

JONETTEGood morning, Diane, thank you so much for taking my call...

REHMCertainly.

JONETTE...I love your show.

REHMThank you.

JONETTEAnd I listen regularly. I'm calling because I just wanted to say a huge thank you to Sen. Warren. My story is that I was raised by my mom and my aunt, two women who moved here over 30 -- moved to Fort Lauderdale over 30 years ago. These are professional women that never sought to get over or do anything of that nature.

JONETTEThey were brought an opportunity to invest, and they thought they were investing for their retirement and got trapped in one of these mortgages that now -- their homes are -- they're in jeopardy of losing both their homes and nobody has -- we tried to get them assistance, we tried to go to an attorney when we realized that obviously something was wrong and this was a fraudulent process.

JONETTEBut nothing ever came of it and, you know, nobody has -- I've not heard anybody speak out about this and I, as you see, I'm emotional. But I'm so happy to hear somebody is actually looking into it, because there are good people out there. I live in Fort Lauderdale, we were hit very hard with the housing crisis and a lot of people got taken in by these companies and it seems like nobody's accountable, or being held accountable, or saying anything about it.

WARRENRight.

REHMWell, I think you have met the one who is trying to hold people accountable. Senator.

WARRENSo I want to start by saying, Jonette, how sorry I am about what's happened to your family and how fundamentally wrong this is. And it happened to millions of families, people who work hard, who play by the rules, who think that it's an honest deal and who just got trapped. I do want to say, I hope that you will get in touch with the Consumer Financial Protection Bureau, they have a hotline for complaints.

WARRENIt sounds like, if you've already been to an attorney, there may not be anything that they can do, but at least register the complaint, they keep track of them, they are investigating the companies that have broken the law. So please hang in there and do remember, you know, it's happened to a lot of families. I want to say one other thing, Diane, that Jonette's story reminds me. All the way through this book -- the book is about mothers and daughters, daughters and mothers. It's about my mother and me, it's about me and my daughter and now my granddaughter. There's a thread about women who help each other out even in times that are really tough.

REHMIndeed. And joining us now by phone from New York, Gretchen Morgenson. She is a reporter and columnist for The New York Times, and Ben White, senior economic correspondent with POLITICO. Hello to both of you, and Gretchen, I'll start with you. You wrote recently that Sen. Warren has embraced what you describe as a monumental task and she's hopeful. But really, how affective do you think she can be if, as she says, she's always been and always will be an outsider?

MS. GRETCHEN MORGENSONWell, Diane, I think it's fascinating, it's been really interesting for me to watch Sen. Warren in some of the committee hearings that have been sponsored and so I certainly would say that this is a person who gets to the bottom of the issue, who is -- asks extremely penetrating questions and doesn't take prisoners.

MS. GRETCHEN MORGENSONI mean, you know, a lot of times you're watching these hearings and, you know, the senators or the Congress people will simply ask one question and then sort of, you know, leave the scene. Well, Sen. Warren really goes much further, she understands the issues and she really tries to hold these people who are testifying accountable. That's a big start in my view.

REHMAnd that is part of your training as a debater going all the way back to high school, is it not?

WARRENThat's right, I was a high school debater, and then special needs teacher, and then ultimately ended up after I went to law school, teaching in law school. But, you know, that is the point, it shouldn't be remarkable to ask a question that is tough and then to do the follow-up.

REHMExactly. And Ben White, let me turn to you. How much influence do you think Sen. Warren actually has at this point?

MR. BEN WHITEI think she has an enormous amount of influence. Thanks for having me, Diane...

REHMSure.

WHITE...and hello to Sen. Warren. I think your show and her comments encapsulated very well this desire in the democratic party for someone to speak strongly to these issues, to the idea that Wall Street got bailed out with no accountability, that there are very few bankers who have faced any kind of similar criminal penalties and Democrats want someone talking about that in the presidential election.

WHITEObviously Sen. Warren has been very clear that she herself has no plans to run for president. Some people continue to wonder if that's in fact the case. But there's a big open hole in the Democratic Party for someone to make these arguments, perhaps Hilary Clinton will make them and will be a voice for the populist movement.

WHITEBut I think there's still room and a desire for this voice in the Democratic Party, so her influence is to pull the party towards that and away from its more centrist, more perhaps closer to a banker's school of thought. So I think the influence is enormous going into the 2016 campaign whether it's Sen. Warren as a candidate herself, Hilary Clinton speaking to those issues or someone else moving in to fill that area.

REHMAll right, now let me read to all of you an email from Dan in St. Louis, who says, "Ms. Warren's puffery and pandering is hollow and it's easy to see she's playing to the electorate and telling them what they want to hear. As a senator, it's her responsibility to prod the government to act, and act it has not. How does she explain having the time to write a book, go on a promotional tour, when all the while, nothing is being done in Washington?" Sen. Warren.

WARRENSo, I think that, that we've got both halves of it here with what Mr. White said and what Dan said, and that is, this really is about accountability and it's about accountability all the way around. Holding the big financial institutions accountable when they break the law, but also holding the government accountable. I was talking earlier about holding bank regulators accountable. You know, this whole financial crisis didn't happen while the bank regulators were at the top of their game. They were missing in action, many of them. And so, we have to sit -- remind them, the bank regulators are not there to serve to the banks, they are there to serve the American people.

WARRENThat true for all of our government officials, they're to serve the American people. So here's the deal, Dan, I'm out there doing my best to try to get this government to act. I use every tool that's available to me at my disposal. I use those hearings to prod the regulators, I use those hearings to prod the banks, that's the tool that's available to me, and in terms of trying to move the Senate, you're darn right I'm talking about what the American people want to hear people talk about.

WARRENI am out there talking about the minimum wage, I am out there talking about the importance of reducing interest rates on student loans, I am out there talking about the importance of making sure that Social Security works throughout the rest of the 20th century and is there for people to be able to retire with dignity after a lifetime of work. I'm talking about those issues, I'm working on those issues, I introduce legislation around them. I'm trying to bring along my colleagues, whether they are Republicans or Democrats, because these are the central issues, not facing the Democratic Party, these are the central issues facing America.

REHMAll right, let's go to Ted in Little Rock, AR. Hi there, you're on the air.

TEDHi Diane, thanks for taking my call.

REHMSure.

TEDI wanted to commend the Senator for the outstanding work that she's done, it gives hope to middle class people like myself, that someone actually gets it. So I want to commend you and I wish you could just clone yourself and that would certainly help the country. The question that I have has to do with, obviously the banks did some illegal activity and at this point, there does not seem to be much interest as far as, you know, moving towards those individuals for punishment. How do you proceed, if it's possible, how do you perceive we'll be able to get that back on the radar screen?

WARRENSo, Ted, you're exactly right. We never had the investigations...

REHMNo.

WARREN...that should have happened. You know, let's be clear, back when the savings and loan crisis hit and there was the big collapse in the late '80s, early '90s, my recollection is nearly nine hundred people ultimately went to jail because they, in effect, the regulators took the position and the federal government took the position, hey, you said your banks were worth this much, it turned out they weren't, something, something stinks here. And they found out that there had been lots and lots of violations of the rules, violations of the law. This time around, those massive investigations didn't occur, instead it was all about protecting the financial institutions and putting them back on their feet.

WARRENSo here's the deal now, we got to learn from both halves, both what it means to hold people accountable and what the consequences are of not holding them accountable. So the way I see this right now, this is about focusing on what these financial institutions are doing right now. I've got a Glass-Steagall bill pending with John McCain.

REHMWhich would do what?

WARRENIt would separate the banking, your checking account, your saving account from all of the risk-taking that happens on Wall Street.

REHMThe banks once again.

WARRENThat's right. Make them separate, make banking boring once again, which I think is a -- the right way for us to go. But the other is to watch what's happening to the financial institutions right now. It's not only about no accountability back in 2008. Let me just remind you, those five biggest financial institutions that we bailed out, because they were too big to fail back in 2008, are now 38 percent bigger than they were back then. We still have a problem on our hands.

REHMGretchen Morgenson, what do you think Sen. Warren's biggest challenges are in terms of making Washington and Wall Street more responsible and responsive to the needs of citizens.

MORGENSONWell, I think that the key issue here is the, you know, mountains of money that these institutions really have at their disposal to kind of manipulate the process in Washington. I think that that's a key issue here and, you know, as she said the outset, you know, the average consumer doesn't have an army of lobbyists or an army of lawyers to protect themselves against, you know, these large institutions and what they can do. So, money in Washington is a huge part of the problem in my view and I really don't know what we do about that.

REHMWhat do we do, Senator?

WARRENSo, I think that Gretchen is exactly right on this. This is, at its heart, it's a big part about money, what money can buy in terms of, you know, million dollars' worth of lobbying every day, and just contributions, every part of how money corrupts what's happening in Washington. Unfortunately, because of where the United States Supreme Court has gone, money is flowing into Washington even faster, even more of it.

WARRENSo here's what I think we have to do, I think we do three things. The first one is what we can do under the Supreme Court ruling and that is get instant disclosure, this idea that the Koch brothers can hide behind, you know, some fancy named group and go out and run a bunch of ads, that's terrible. We should know whose money is being spent, so at least we have that much information. Will that fundamentally change things? No, but it's a step in the right direction.

WARRENThe second one, we're going to have to think about a constitutional amendment to bring money under control in Washington. But the third one is that we all invest in small dollar ways and it makes a difference. I just give the example, and I talk about it in the book, I had the most expensive Senate race in the country and I raised more than 40 million dollars.

REHMWow.

WARRENThat’s what it took, I ran against someone for whom Wall Street said, we will give him as much money as he needs to beat that women. You know how I raised most of my money? I raised it in contributions of less than 50 dollars, more than 80 percent of my contributions. People invest in small dollars and you know what? We can push back against the big money.

REHMAnd you're listening to "The Diane Rehm Show." Following up on that, let's hear from Ben, who's in Washington, D.C. Go right ahead, Ben.

BENYes, hi. Greetings, it's an honor to speak to you, Sen. Warren. I just wanted to get some insight, I'm actually calling on behalf of a friend. He did securities law, accounting background and came up to D.C. with the hopes of being able to join a member of the regulatory team and because of a lot of the infighting between, you know, funding the Dodd-Frank offices and all these different complexities that are keeping, you know, people like him out of the places where you want them to be.

BENHe's been looking for about four years, so I'm wondering from a regulatory standpoint, I know the institutions are there. But there's a lot of talent that's on the sidelines, because these institutions don't have budget in order to, in order to (unintelligible), so I was wondering if could speak on that and...

WARRENSo Ben, fabulous question, you are exactly right. We need talented people who want to come and work in these agencies, but what Congress wants to do, and I'm going to be blunt, what the Republicans in Congress want to do, is they want to keep the agencies on a short leash. With the SEC, the way they do that is they keep the funding low, so why is the SEC not effective, we could talk about a lot of reasons, but one of them is not having enough money, this is something we got to fight back on.

REHMSen. Warren, Monica Lewinsky's piece came out in Vanity Fair this month. How do you think, number one, it might affect Hilary Clinton, should she decide to run for president, and whether she does or not, you have had such support from around the country, would you consider a run in 2016?

WARRENSo, I'm not running for president. But I want to make this clear, the issues that I'm talking about in this book, the issues I'm talking about on the floor of the United States Senate are issues that can't wait. I know that it's lots of fun to speculate about what's going to happen on down the line.

REHMOh, I'm not speculating. (laugh)

WARRENNo, I know. But what I want to make the point, we've got to address this stuff right now, we've got a student loan bill that hit the floor yesterday. We need students to sign up and former students to say yes, we're going to refinance student loan debt. We've got an election coming up in 2014 that could determine whether the Senate remains Democratic or moves over to the Republican side. These are powerful issues that aren't abstract issues, they affect families every day. It's up to us to give families a fighting chance.

REHMElizabeth Warren, and that is the title of the U.S. Senator from Massachusetts' book, "A Fighting Chance." So good to have you here, thank you.

WARRENThank you, good to be here.

REHMAnd thank you, Gretchen Morgenson and Ben White. Thanks for listening all, I'm Diane Rehm.