OT: Obama Administration Needs to Nominate Elizabeth Warren to Run the CFPA *updated*
**See multiple updates below**This post is not Hillary-related but I’m a huge Elizabeth Warren fan so, here it goes.
If the Obama administration is afraid to nominate Warren, the woman who first conceived of the Consumer Financial Protection Agency (CFPA) several years ago in a paper she published, then their claims of supporting meaningful reforms which protect consumers will largely be revealed to be little other than empty rhetoric. It’s bad enough that the Wall Street “reform” package contains so many pro-banking loopholes that the Titanic could sail through it and it’s bad enough that the legislation failed to deal with the very problem that led to the global financial crisis- having banks that are too big too fail-but now the administration seems to be worried that the banking industry will be mad if Warren heads the CFPA because, well, she’s too pro-consumer. Brilliant, really.
It would seem that most Republicans, Wall Street and some in the Obama admin. would like to appoint a figure-head who is more sympathetic to Wall Street than to Main Street. Talk about cynical! Apparently, Timmy Geithner (who I am not a fan of) opposes Warren, probably because of this (you really must watch this if you haven’t seen it already):
It’s like a repeat of the whole sordid fiasco with the Boy’s Club (Rubin, Greenspan, Summers and to a lesser extent, Geithner) that opposed Brooksley Born’s warning about the abuse of derivatives, the dangers of lax regulation and her prescient concerns about a pending financial crisis during the Clinton years. If you haven’t seen the Frontline program about this, check it out- that this elite Boy’s Club were able to successfully silence this brilliant woman (Born) and help lead us down the path to financial ruin, still says a lot about what’s wrong with Washington these days. We need a new sheriff in town because the Boys have had their turn and its time for Geithner, Summers, Rubin and other acolytes of no regulation, ever, to let people like Warren usher in a new era of financial responsibility and oversight.
Anyway, it’s not lost on too many people that Warren seems to be the more modern version of Born and the fact that many of the usual suspects oppose her nomination tells me that they haven’t learned much since the 1990’s. Summers, Geithner and Company are still looking out for their Wall Street pals.
Rep. Barney Frank is rooting for Warren in a not-so-subtle way:
If President Obama fears Elizabeth Warren won’t be confirmed by the Senate to head the new Consumer Financial Protection Bureau, he should just appoint her while the Senate is on one of its many vacations, House Financial Services Chairman Barney Frank said Friday.
Referring to her as “far and away the best candidate,” Frank said Warren, a noted consumer advocate and bailout watchdog who conceived the agency in a 2007 article, not only cares about protecting consumers but also has the political chops to get things done for them in Washington.
“If [Warren] can’t be confirmed she should be a recess [appointment],” Frank, who helped shepherd the recently-enacted financial reform bill into law, told the Huffington Post on Friday.
“Given the way [the Senate has] misused the filibuster… given it’s anti-Democratic, I think the President did exactly the right thing with Donald Berwick,” the 15-term Massachusetts Congressman added, referring to an earlier Obama recess appointment to head the Centers for Medicare & Medicare Services.
Warren, a popular pick to lead the new consumer agency she envisioned, has seen her chances threatened by other candidates for the job. Treasury Secretary Timothy Geithner prefers Michael Barr, his assistant secretary for financial institutions and a veteran of the Clinton-era Treasury, according to people familiar with Geithner’s views…
And then there is this, which makes me wonder what in the world Obama was thinking when he selected Geithner to head the Treasury Department:
As reported on HuffPost last week, Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner’s views.
One can assume that Geithner, being very close to the nation’s biggest banks, is concerned that Warren, if chosen, will exercise her new policing and enforcement powers to restrict those abusive practices at our commercial banks that have been harmful to consumers and depositors.
Certainly, Warren is not the commercial banking industry’s first pick to serve in this new role. And unlike other legislation in which an industry’s lobbying effort would naturally slow or cease once the legislation is passed, the new financial reform bill is continuing to attract enormous lobbying action from the banks. The reason is simple. The bill has been written to put a great deal of power as to how strongly it is implemented in the hands of its regulators, some of which remain to be chosen. The bank lobby will work incredibly hard to see that Warren, the person most responsible for initiating and fighting for the idea of a consumer financial protection group, is denied the opportunity to head it.
But this is not the only reason that Geithner is opposed to Warren’s nomination. I believe Geithner sees the appointment of Elizabeth Warren as a threat to the very scheme he has utilized to date to hide bank losses, thus keeping the banks solvent and out of bankruptcy court and their existing management teams employed and well-paid.
Warren’s appointment wouldn’t just be a setback, it would devastate Geithner’s entire plan on how to deal with trillions of bad assets the banks still won’t recognize as losers. That is why I think she is going to face enormous resistance, even inside of the administration. The next one to oppose Warren after Geithner will be Larry Summers for this very reason. Then they will see if they can get Bernanke and finally Obama on board. The pitch to Obama and Bernanke will not be personal, it will be the same phony argument that Paulson and Bernanke used to justify TARP to congress, they will say that if Warren is appointed the entire world of banking and finance as we know it will come to an end.
As to the other two potential nominees on Obama’s short list for the position, Michael S.Barr is Geithner’s boy currently working for him as an Assistant Secretary at Treasury. More importantly, he is Bob Rubin’s boy, having served as Rubin’s assistant in the Clinton administration. If you are Rubins’ boy, you are the bank lobby’s boy as this position of Rubin’s boy was previously held by Summers and then Geithner. Eugene Kimmelman seems like a nice enough person who has no background in finance. If the banking lobby can’t get their guy in, the next best thing is to get a completely clueless person in who is too afraid to act boldly given he couldn’t tell a CDO from a CEO. He has been the top lobbyist for the Consumers Union, so he is pro-lobbying and as a positive comment, really understands how toasters and garage door openers work.
So much for Change You Can Believe In.
As far as I’m concerned the argument against her running the agency is pretty weak and easily rebutted. The main argument is she lacks managerial experience and hasn’t run a huge agency before. Neither has about 95% of the heads of major government agencies including Hillary Clinton, Ken Salazar and, well, President Barack Obama (who, as we know, was a community organizer). So, that argument sucks.
Honestly, it’s time for Obama to show some backbone and STAND UP FOR SOMETHING! My God, if Obama and the Dems can’t make the case that the CPFA should be run by an actual believer in consumer rights, then they should just hang it up and let someone else lead the country.
Here’s another video with Warren- how can anyone think this woman shouldn’t head CFPA?
UPDATE: Sign the petition in support of Elizabeth Warren as head of the CFPA!
UPDATE II: More support for Warren!
UPDATE III:7/25/2010- Geithner was on the Sunday talk shows (ABC- Jake Tapper) and is doing a major backtrack on Elizabeth Warren. He’s now trying to make it sound like he supports her. I’m not buying it. After it was leaked that he didn’t support her, there was an incredible outcry and I think Obama told him to shut it.