Elizabeth Warren for Consumer Protection Board
The Huffington Post is reporting that Treasury Secretary Timothy Geithner is trying to nix Elizabeth Warren's appointment as the head of the Consumer Financial Protection Bureau that will be created by the financial reform bill. If this is true, President Obama must override his Treasury Secretary.
While the reform bill does improve regulation in many ways, it does not fundamentally change the way Wall Street works. Goldman Sachs, Citigroup and the rest will be doing business pretty much the same way the day after reform as they did the day before reform. The one clear substantive gain was the creation of a strong and independent consumer financial protection bureau. Elizabeth Warren is the obvious person to head this new agency; there is no close second.
To start, the idea for this sort of consumer protection board originated with Warren and her writings. She made the obvious point that we don't allow businesses to sell exploding toasters, why should we allow them to sell exploding mortgages? (For opponents of government bureaucracy, this could be dealt with by making bad contracts unenforceable, but our courts do not see things this way.)
Ensuring that mortgages and other financial products are clearly written and include reasonable terms not only protects consumers, it will also make the financial sector more efficient. Why would we want financial engineers wasting their energy developing deceptive contracts? If they can't market them to consumers, then they won't write them up.
In addition to coming up with the idea for the agency, Warren has also been its most vocal advocate. She has written and spoken extensively on the issue ever since the start of the mortgage crisis.
Warren has also displayed the sort of independence that will be needed to get the new agency on a solid footing. She used her position as head of the Congressional Oversight Panel for the TARP to thoroughly scrutinize the deals made as part of this program and to point out all the ways in which taxpayers were not getting a fair deal for their money.
Undoubtedly her actions made many people in positions of power uncomfortable. But, that is exactly what we need in order for the new consumer protection agency to be effective.
The Federal Reserve Board already had the power and the responsibility to do the job that the new consumer board has been assigned. The problem was that Ben Bernanke, Alan Greenspan, and their colleagues on the Fed board (with some notable exceptions) never took this responsibility seriously. As a result, consumer protection was a joke.
Shifting the responsibility to a new board does not by itself guarantee that consumer protection in financial matters will now be treated seriously. Just ask the folks at the Mineral and Management Service about their oversight of deep-sea drilling.
Ensuring that the new board carries through its responsibilities in the way that is intended will require a leader with integrity, intelligence and independence. Elizabeth Warren clearly fits that description. Selecting anyone else will be an insult not only to her, but to all the individuals and organizations who worked so hard to bring the Consumer Financial Protection Board into existence.
Abos-freaking-lutely !! YES !!
C
July 16, 2010 10:48 AM | Reply | Permalink
A few years ago a Wells Fargo loan officer blew a big fat whistle revealing, among other skulduggeries, that loan officers were falsifying WW2 forms before sending a mortgage application up for final approval, the aim being to disqualify a borrower for a prime mortgage, qualifying? him for a subprime.
And all this was revealed before a Senate (or House) Committee which took absolutely no action against Wells. Anyone who thinks that the government is our protector is a bloody fool.
July 16, 2010 10:54 AM | Reply | Permalink
It's a no-brainer...
July 16, 2010 10:57 AM | Reply | Permalink
If Warren gets screwed out of this job, it will be the biggest cosmic injustice since God whacked Moses before letting him enter the promised land.
July 16, 2010 11:30 AM | Reply | Permalink
As I wrote at FireDogLake:
Don’t hold your breath on a recess appointment for a consumer friendly head of Consumer Financial Protection Bureau. Remember Dawn Johnsen, fierce advocate for accountability and the rule of law, had her nomination for OLC languish in the nether world of White House non-support for months until she, at RahmObama request, withdrew her bid.
July 16, 2010 11:56 AM | Reply | Permalink
I don't think we need to speculate on sources of the information all that much. Geithner's history as Wall Street's man in Washington is clear. He was head of the NY Fed. He was instrumental in seeing TARP through and she is on record saying that nobody knows for sure if it was a shakedown or that (what Geithner maintains) our economy was on the verge of falling over a cliff. The grilling he got from Elisabeth Warren at the hearings showed a palpable animosity between the two. No sources needed for that. Obviously Wall Street does not want her as head of the Consumer Protection Agency. That can be inferred by pure practical logic. Why would they?
I say that If Obama does not choose Warren he should have hell to pay from the Democratic base.
In fact I would say that if one has to be let go it is Geithner (and might as well include Bernanke and Summers while you are at it for all they are worth).
July 16, 2010 11:51 PM | Reply | Permalink
I have no idea why this post got posted in this spot. I was not trying to respond to Bushie, I was just trying to respond to Mr. Baker's post
July 16, 2010 11:55 PM | Reply | Permalink
Obama seems to get a new test every week. Will this be one of the rare ones he aces? Don't bet on it. Geithner has influence way beyond what his very limited abilities and accomplishments would justify, so expect Obama to once again capitulate.
July 16, 2010 12:08 PM | Reply | Permalink
Uh, I seem to remember that Obama wanted Geithner as Treasury Secretary. I don't think Warren has a chance.
July 16, 2010 12:24 PM | Reply | Permalink
The Huffington Post is reporting that Treasury Secretary Timothy Geithner is trying to nix Elizabeth Warren's appointment
I don't see any proof of any such thing in the HuffPo article. Most of the article is supposition based upon presuming he doesn't want her because of the way she questioned him in hearings. There's only one sentence in the middle (Geithner's objections to Warren taking over that role also involve her views on Wall Street,) that even bothers to add the measly "sources say," and even then he doesn't even bother to describe who/what those sources are.
It's a very questionable article, as in "gossip, maybe unfounded, maybe intended to fool the reporter." Could be all imaginary or all spin intended to get a certain response. Experience has taught me to only give weight to such pieces from reporters that are very savvy with much experience in the ways of D.C.
July 16, 2010 3:28 PM | Reply | Permalink
If it involves Geithner(or anyone from the administration that's not a liberal) and a liberal favorite (this time its Warren), quality of sources doesn't matter.
July 16, 2010 7:03 PM | Reply | Permalink
If she doesn't get it, it's more likely because of input from Senator Dodd and his pals on worries about her confirmability, not Geithner. Geithner's deputy has denied the suggestions in the HuffPo article:
http://blogs.wsj.com/washwire/2010/07/19/dodd-casts-doubt-on-warren-for-consumer-agency/
July 19, 2010 5:09 PM | Reply | Permalink
hmmm...let's see what obama's inner white 1970 republican persona will do on this.
July 16, 2010 6:35 PM | Reply | Permalink
If Geithner can't stop Warren's nomination then it will fall to Obama's BFF's (the Senate Republicans) to do so and I'm sure they will oblige him. Once they do, Obama can shrug his shoulders and blame it on the mean ol Republicans once again and there won't be any fingerprints at all.
July 18, 2010 2:17 AM | Reply | Permalink
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July 19, 2010 4:04 AM | Reply | Permalink
What troubles me most about this entire thread is AA's comment, above, in a reply to Bwakfat:
Okay, for goodness sake, let's go look at what Dean Baker actually said that caused him to lose credibility with AA, and stimulated her to trash him in this post. Must have been pretty bad, right?
Here it is:
Let me simplify it. He said "Huffington Post is reporting…" and he said "If this is true…"
Then he took the opportunity to write an intelligent post that supported Warren for the job and explained why, which is exactly what AA complained he should have done. After the opening sentence he never again mentioned or alluded to Geithner and certainly never said anything that could be considered disrespectful of him, much less nasty.
Yet AA will never "…trust a damn thing Dean Baker says as analysis now."
All I gotta say is, "Who's zoomin' who?"
July 22, 2010 8:13 PM | Reply | Permalink
Oops. Sorry. I posted this comment to the wrong thread. ArtAppraiser took off from her comments above with a blog of her own, and I meant to post it over there:
"Netroots" does its own Breitbart-style stuff on Geithner and Warren
July 22, 2010 8:17 PM | Reply | Permalink
er, well then, ENCORE, or something.
(clap clap clap clap)
Gotta say, it's a very interesting discussion.
July 22, 2010 9:08 PM | Reply | Permalink
Interesting, yes, but painting Baker quoting Nasiripour as equivalent to Fox quoting Breitbart, which artappraiser did in her blog, is a stretch, don't you think?
Especially since Baker didn't say the report is true. He used the report as an opportunity to write a strong post in support of Warren.
July 22, 2010 9:18 PM | Reply | Permalink
Well, I think that was a bit of hyperbole employed to make a larger point. It happens.
No, I don't think they are comparable, but I can see that there is some concern for becoming that which we condemn from the right. My point was that, maybe it's necessary. Or maybe the point was, since it is the right thing to do--who cares?
=D
Or something.
July 22, 2010 9:48 PM | Reply | Permalink