For Sen. Elizabeth Warren, toasters are more than just a convenient kitchen appliance or stereotypical wedding gift. They’re a reminder of her belief in how government should work.
Over the past two decades, the Harvard law professor-turned-Massachusetts senator has repeatedly brought up the bread-cooking devices in speeches, writings, and even a fundraising email from her 2020 presidential campaign this week.
“Let’s talk about toasters,” Warren began a speech last year at Georgetown University’s School of Law.
The subject colors her view of government regulation — dating back more than four decades ago to an incredible brush with disaster.
“Back when I was a young mom in the 1970s, I liked to make toast for breakfast,” Warren recalled last June. “And one morning I popped a few pieces of bread in our toaster oven. I got busy doing six other things, and quickly forgot about the toast.”
When she remembered, it was too late: Smoke was “pouring” out of the oven. And when she opened it, the four slices of bread were literally in flames on the tray.
“Always a quick thinker, I screamed and threw the thing at the kitchen sink,” she said.
Three of the pieces of toast successfully landed in the sink, Warren said. The fourth, however, sailed a bit high — and set her kitchen curtains on fire. More chaos ensued.
“I screamed again, and then I grabbed a cereal bowl and threw it at the burning curtains,” she said. “The milk doused most of the fire, and I calmed down enough to realize that screaming and throwing things was probably not my best strategy. I grabbed a towel and beat on the toaster until everything seemed quiet, let it cool down, and I unplugged it.”
Warren says it was around that time that her father gave her a fire extinguisher for Christmas.
The experience came at a time before toasters had timers or automatic shutoffs, which could serve as safety nets for busy, distracted, or forgetful fans of toast. Rather, there was only an on-off switch.
“On was on, which meant that it was possible to leave toast under the little broiler all day and all night, until the food burned, the wiring melted, and the whole thing burst into flames,” Warren said.
Thanks to modern technology and government regulation, Warren says that’s no longer a worry to consumers of toast. However, she continued to return to that story decades later to illustrate how the same couldn’t be said for consumers of financial products.
“Consider the toaster,” Warren wrote in her 2002 book about middle-class bankruptcy, The Two-Income Trap. “People buy toasters for home use. No one makes them buy toasters, and they could live without toasters. If they understood electrical engineering, they could evaluate the safety of each toaster under every possible scenario.”
“But toasters are regulated,” she continued. “No toaster manufacturer may peddle toasters that have even a 1 percent chance of catching fire. Toaster makers (and conservative economists) could point out that riskier toasters could be made more cheaply, and that permitting their sale would expand the number of toaster owners in the country. Companies might put special disclaimers and instructions on their toasters, telling customers how to extinguish the fires themselves. But as a nation, we have collectively decided that the risks posed by an unregulated toaster industry are not acceptable.”
While her own firsthand toaster fire experience went unmentioned, Warren wielded the appliance in her book to metaphorically whack the deregulation of consumer lending, questioning why the government allowed mortgage and credit card owners to incur risks they wouldn’t allow in the physical appliance industry.
“Predatory loans may not set houses on fire the way a faulty toaster might, but they steal people’s homes all the same,” she wrote.
Warren brought up the toaster comparison again in a 2007 article for the left-wing journal Democracy, in which she laid out the idea of what would become the Consumer Finance Protection Bureau. She questioned why the government was allowing homeowners to refinance with subprime mortgages that had a one in five chance of leading to foreclosure when the Consumer Product Safety Commission would never allow toasters that had the same probability of “bursting into flames and burning down your house.”
Warren said the CPSC recognized that the “complexities of consumer products and the diverse nature and abilities of consumers using them frequently result in an inability of users to anticipate risks and to safeguard themselves adequately.” However, there was no such agency doing the same for financial products, which she said could be “even more insidious,” since lower-income families were more vulnerable.
“If toasters are dangerous, they may burn down the homes of rich people or poor people, college graduates or high-school dropouts,” Warren wrote. “But credit products are not nearly so egalitarian.”
Just as “no one expects every customer to become an engineer” in order to buy a safe toaster, Warren argued that no customer should be “forced to read the fine print in 30-plus-pages” in order to insulate themselves from predatory lending. She said her proposed consumer watchdog agency could take on the responsibility and serve as the CPSC’s financial counterpart — even if it didn’t solve every problem.
“It is possible to stuff a toaster with dirty socks and start a fire, and, even with safety standards, it will remain possible to get burned by credit products,” Warren wrote.
Still, she said such regulations could make a “critical difference for millions of families.”
From there, Warren used the toaster analogy in article after article after article advocating for the CFPB — a movement that gained steam amid the financial crisis. President Barack Obama even borrowed it during a 2009 appearance on “The Tonight Show with Jay Leno,” as well as several subsequent town halls. Less than a year later (and despite opposition from Wall Street), Obama signed Warren’s brainchild into law.
“In the nearly eight years since it’s been created, this little agency has forced big financial institutions to return $12 billion directly to people who were cheated,” Warren wrote in an email to supporters Wednesday, reviving the toaster analogy in her calls for “big, structural change to get Washington working for working people.”
Warren can only hope her toaster parallel is as convincing in 2020 as it was a decade ago.