Sen. Warren is Trying to Kill American Investment Innovation
By Jared Valanzola
Sen. Elizabeth Warren built her career on expanding Washington’s grip over the financial system. She sells it as “consumer protection,” but it’s about controlling private investment and replacing it with bureaucratic command-and-control.
One of her latest target’s is the insurance industry and the capital it uses to attain higher returns, more diversification, and lower premiums by investing in the private credit market. This market provides loans to 200,000 businesses that employ 48 million Americans. If Sen. Warren succeeds, U.S. policy will turn toward Europe’s model of overregulation, a model that even Europeans admit has been a costly failure. This will limit the capital needed for America’s private sector employers.
For over a decade, the European Union has smothered its markets with rigid capital requirements, endless disclosure mandates, and suffocating rating rules. The high compliance costs and complicated requirements in the European market have stifled market growth and passed the costs on to consumers.
Even Europe’s statesmen are waving the white flag. Former Italian Prime Minister Mario Draghi has called for urgent reforms, saying that “the EU should aim to revive securitization,” an important component providing loans to consumers and mid-sized businesses, and restore the flow of capital. When veterans like Draghi admit the EU’s model has failed, it should be obvious: America should not repeat their mistakes.
Yet Sen. Warren is steering us toward Europe’s crown of fool’s gold — glittering with promises of “protection” but hollow at its core, eroding capital markets from the inside out. Indeed, her latest crusade makes clear exactly where she wants to take American financial policy — toward the same failed practices stifled growth abroad.
On July 17, Sen. Warren, the ranking member of the Committee on Banking, Housing, and Urban Affairs, penned a letter to Treasury Secretary Scott Bessent laying the groundwork to subject private credit to the same type of suffocating regulatory regime that already hobbled Europe’s financial markets. Policymakers should reject her proposals and instead lean into investment innovation.
Private credit is a solution that was born to provide loans to businesses that are too small for public capital markets but also do not fit the profile of a bank borrower. Private credit fills this gap and keeps capital flowing to mid-sized businesses and everyday consumer products like credit cards and student loans. Instead of celebrating this innovation, Warren wants to strangle it. She has demanded imposing new regulations, such as stress tests, and urged regulators to crack down on ratings, effectively trying to kill private credit.
The United States built the world’s largest economy by adopting a dynamic investment ecosystem, rather than following overreaching regulatory decrees from unelected bureaucrats. Private credit is the latest proof of that tradition: it broadens opportunity, fuels entrepreneurship, and gives consumers and businesses access to capital when they need it most.
Policymakers must resist Sen. Warren’s EU-style overreach and double down on American dynamism. Anything less is not “consumer protection.” It’s economic self-sabotage. Sen. Warren’s blueprint is not visionary. The United States should avoid importing Europe’s failures.
Jared Valanzola is Chair of the Plymouth County Commissioners and host of the JV Team on WATD.