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The Watchdog

Bharat Ramamurti ’03 oversees CARES Act spending—and pursues corporate reform

September-October 2020

Photograph of Bharat Ramamurti

Bharat Ramamurti

Photograph by Jason Hornick/Courtesy of Bharat Ramamurti


Bharat Ramamurti

Photograph by Jason Hornick/Courtesy of Bharat Ramamurti

In early April, as America was pummeled by coronavirus-induced mass unemployment, Bharat Ramamurti ’03 got the official call from Senate minority leader Chuck Schumer’s office informing him that in a few hours, he would be appointed a watchdog of the largest federal-aid package in American history.

Ramamurti had just ended his seven-year tenure as a top economic adviser to Senator Elizabeth Warren; he worked mostly behind the scenes, developing the policies and strategies that helped build her national profile and presidential campaign. Now, as the first member chosen for the Congressional Oversight Commission, responsible for monitoring the multi-trillion-dollar rescue package that is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, he was pushed into the public eye himself. “I felt like I owed the public a lot and I wanted to absolutely be on top of every aspect of the program,” he remembers. “I wanted to do my part to make the program help as many people as possible.” Of the announcement itself, he recalls: “I sort of was scrambling around before that became public. My LinkedIn page as of that morning said I was still a student at Yale Law School.” (He graduated in 2007.)

The five-member commission—one each named by the Senate and House majority and minority leaders, and a chair chosen by Speaker Nancy Pelosi and Senator Mitch McConnellfocuses on the $500-billion portion of the CARES Act package (managed jointly by the U.S. Treasury Department and Federal Reserve) that is set aside to underwrite trillions of dollars of lending—primarily to corporations, with a smaller commitment to state and local governments. (That’s separate from the Paycheck Protection Program for small businesses and enhanced unemployment benefits that are also part of the CARES Act.) The group must report monthly to Congress on the economic impact of the funding, the transparency with which it’s being allotted, and its costs and benefits for taxpayers. To Ramamurti, that means investigating whether average workers, especially the more than 50 million who have lost their livelihoods since the start of the COVID-19 pandemic, are actually benefitting from the money.

Almost immediately, he began sounding the alarm that the money was coming with no strings attached—no requirement that companies maintain their payrolls or do anything to ensure the welfare of their workers: “literally nothing,” he says over Zoom from the Washington, D.C., home he shares with his wife and small daughters (and a rescue dog, heard snoring in the background). “You could have a company that…gets billions of dollars of essentially taxpayer-subsidized lending through the Federal Reserve, and that company could turn around and fire thousands of workers. It could pay out higher executive bonuses. It could use a bunch of money to do a share buyback to pump money to shareholders.”

For Ramamurti, who in April also started a job directing research on corporate power at the Roosevelt Institute, a progressive think tank, these are not just hypothetical concerns. “It’s what big companies in America have been doing consistently for the last 10 or 15 years,” he explains. “A huge percentage of the corporate profits that companies generate has been sent to the shareholders....And meanwhile, the wages for workers—even as corporate profits have gone up—have stayed fairly stagnant. And so to me, it shows that unless you specifically, by law, restrict how these companies use this money, they’re going to default to using it to help executives and shareholders.”

Ramamurti spent weeks as the oversight commission’s sole appointee, trying to track how the public’s dollars were being used and communicating his findings on his Twitter account and in op-eds. For a long time, the commission was—and in many ways still is—his Twitter feed. “I view my role as trying to inform the public,” he explains. He’s been interviewed by seemingly every major news outlet and policy podcast. Three other commission members have since joined him—all members of Congress. But because Pelosi and McConnell had not yet agreed on a chairperson as this issue went to press, the commission is unable to hire any staff members. (The comparable panel that oversaw the 2008 financial bailout eventually had dozens.) Ramamurti is “not letting the fact that we don’t have a chair or staff slow us down from the work that we’re supposed to be doing,” he says. “It’s a little bit tricky because, you know, literally it’s just me. But it also lets me get my hands dirty and dig into the details of everything....As somebody who spent a long time as staff, I don’t mind doing it at all.” Of his dual role at the Roosevelt Institute, he adds, “So far, it’s worked out. There’s just been some late nights.”

From the outset, he shaped the narrative about how the stimulus funds should be spent, and what Americans should demand from companies that receive them. “Taxpayer-backed promises from the Fed have let big corporations borrow cheaply with no conditions,” he tweeted on June 8, in response to reports that companies like multinational food distribution corporation Sysco and Toyota were taking advantage of the promise of publicly subsidized borrowing—and letting their workers go: “Sysco borrowed billions, cut thousands of jobs—but promised to keep dividends going. If the Fed wants to save jobs as it claims, they should require it.” If corporations are allowed to just take the money and run, Ramamurti warns, it could make America’s extreme wealth inequality even worse.

 

Ramamurti’s oversight philosophy feels in many ways like an extension of his time on Elizabeth Warren’s staff. “I worked closely with Bharat for years,” she says, calling him “a powerfully important voice in how we can make our government work for every person, not just the wealthy and well-connected.” Ramamurti began as her senior counsel for banking and economic policy in 2013, and then was deputy policy director for economic policy throughout her presidential campaign, which ended in March. He led many of the signature proposals that distinguished Warren as a rigorous and original policymaker, like the Accountable Capitalism Act, a bill that would require 40 percent of the board members of large corporations to be elected directly by their workers. Or the proposed wealth tax: a levy of 2 percent on household net worth over $50 million, and 6 percent on net worth over $1 billion, to pay for universal childcare and student-debt cancellation.

Ramamurti is “one of the smartest economic aides on Capitol Hill,” according to economist Gene Sperling, a friend and former director of the National Economic Council. During Warren’s presidential run, “He showed that he was one of those rare people who can not only delve into and master a wide degree of economic policies from college debt to tax policy, but that he could do so while also being able to exert sophisticated and nuanced political judgment,” adds Sperling. “That makes someone like Bharat extraordinarily valuable not just to Elizabeth Warren, but to virtually any progressive policymaker.” He’s also been considered as an appointee to the Securities and Exchange Commission.

“When you say corporations exist to maximize shareholder returns, you are saying the goal of corporate America is to maximize the amount of money they send to the wealthiest people in America.”

Behind the policy agenda that Ramamurti crafted with Warren is a theory of how concentrated corporate power has undermined shared prosperity and made it possible for the richest Americans to capture the economy’s gains at the expense of everyone else. “In the post-World War II period…broadly speaking, what you saw was that when corporate profits went up, wages for workers went up” too, Ramamurti says. “And then starting in the ’80s, you had this idea that corporations exist solely to maximize their return to shareholders,” regardless of the consequences for workers, society, or anyone else. “I think that that is the behavior of a psychopath: you’re only about one thing to the exclusion of how it impacts other people who might have an interest. I’m not saying that the individual executives and board members are psychopaths,” he adds—most individual people would not behave that way. But when an entire corporation does, it’s not just accepted, but rewarded.

And the shareholding class, of course, makes up a privileged minority of Americans. “About half of American households own no stock whatsoever,” Ramamurti stresses, not even in retirement accounts. “The top 10 percent of households own about 85 percent of shares. So when you say that corporations exist to maximize return to shareholders, you are saying that the goal of corporate America is to maximize the amount of money that they send to the wealthiest people in America.”

 

Ramamurti’s first home was in Peabody Terrace, the Harvard graduate-student dorm where his family lived while his father, Ravi Ramamurti, D.B.A. ’82, earned his doctorate. His parents had moved from the Indian state of Tamil Nadu to the United States in 1980, eventually settling in the Boston suburb of Lexington. Ravi Ramamurti, now a University Distinguished Professor at Northeastern’s business school, works on emerging economies in the Global South. “Growing up, I used to think all the stuff that my dad did was so boring,” the younger Ramamurti remembers, though it’s not unrelated to what he now does himself. “I would always make fun of him because his books had the most boring titles.”

Ramamurti had been interested in government and politics since his high-school debate days. “For me, it was always the question of how can we make the society we live in better, and I think it took me a while to figure out how I wanted to try to have that kind of impact,” he says. At Harvard, he concentrated in social studies, which combines fields like philosophy, history, and economics, as a way to avoid specializing; by his senior year, he had narrowed his focus to law and policy. (His twin siblings, Gita ’11 and Arjun ’11, were social studies concentrators as well.) In 2004, he chose Yale Law School, which had a reputation for being “less about becoming a practitioner, and more about the philosophy and ideas that underlie the law and the policy implications of it,” he says. “I did end up spending some time as a practitioner”—he held jobs at WilmerHale and Jenner & Block, as well as federal court clerkships—“but I think I was always trying to weasel my way back into policy.”

The 2008 financial crisis, meanwhile, became a defining problem for Ramamurti’s generation, giving rise to his interest in banking and economic policy. Government can ease the impact of recessions on people who most need help, or, as Ramamurti saw then, it can worsen existing inequalities. “It was shocking to see the government respond to [that] crisis by taking care of the banks first,” he remembers, “and, in many cases, leaving families that were struggling with underwater homes and looking at foreclosure...to face that struggle by themselves.” Warren, who chaired the Congressional Oversight Panel that investigated the 2008 financial bailout, and was often a fierce critic of it (much the same role that Ramamurti plays today), caught his attention. He would join her staff soon after she was elected to the Senate.

As Warren’s counsel on banking policy, Ramamurti was responsible for legislation that came out of the Senate Banking Committee, work in which he says he wasn’t especially experienced. When he was getting ready for his interview with Warren’s office, “They were doing some hearings on reforming Fannie Mae and Freddie Mac,” the government agencies that purchase mortgages, he remembers. “And I literally had to go look up, on Wikipedia or something, like, how do these agencies work? What role do they play in our economy?”

He excelled quickly. He is particularly known for leading Warren’s investigation of Wells Fargo, which had been fined for illegally opening millions of fake accounts without its customers’ consent, and of Equifax, after a data breach exposed the personal information of nearly half of all Americans. His law background was especially helpful in preparing Warren for the fiery Senate hearings that often became viral video clips, “like the Wells Fargo hearing, where she questioned the CEO and he subsequently was forced to resign,” he says. “In many ways I viewed it as preparing for a cross examination or a deposition, except it’s only five minutes....What are the best questions that we can ask in that time? How do we string them together [so] she’s made a compelling presentation that the public will understand and use to push for whatever changes we’re looking to make?”

Writing the script for politicians is one thing, but being in the public spotlight oneself has different demands. “After working for Elizabeth for so long, I felt prepared to handle it and had a decent idea of what to expect,” he reflects. His soapbox skills and encyclopedic policy knowledge, much like Warren’s, seem perfectly calibrated to make corporations uncomfortable.

At the Roosevelt Institute, too, Ramamurti’s big-picture critique and eagerness to comb through technical details make an ideal match. “Many people who are critics of corporate power are campaigners and are good at building public movements, but very few of them are good at reading legislation, understanding how tax law ought to be restructured, et cetera,” says the institute’s president and CEO, Felicia Wong. “Having a really important power lens and real, technical expertise—a real deep understanding of what is going wrong with corporate power in our economy and why, and literally how to write the rules to fix it—that’s a rare quality.”

 

Rewriting the rules of the economy, to many people, might imply tax-and-transfer policies. But changing the structure of corporations themselves, so that they’re more democratic and more accountable to their workers and society, Ramamurti argues, would work on a fundamentally different level. Abandoning shareholder primacy, for example, would help rebalance America’s extreme inequality before taxes. “We can shift trillions of dollars and how it flows through the economy in a way that doesn’t require the government to spend one penny and doesn’t require us to impose a single new tax. It is a way of profoundly shifting the equity of our economy without doing it in a redistributive way,” he says. “It would help shift us back toward a system where the gains are more fairly shared, and workers get a bigger share of the profits they help produce.” That’s the long-term agenda he hopes to carry out, even after the coronavirus, the recession, and the Congressional Oversight Commission have passed into history.  

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