The war on Elizabeth Warren

The war on Elizabeth Warren

Elizabeth Warren, Special Advisor for the Consumer Financial Protection Bureau, recently testified before Congress (pdf), and the Republicans went after her in force. (Why is she the Special Advisor and not Director? It’s complicated; or not.)

Here’s Paul Krugman on the subject of Warren’s recent testimony:

Last week, at a House hearing on financial institutions and consumer credit, Republicans lined up to grill and attack Elizabeth Warren, the law professor and bankruptcy expert who is in charge of setting up the new Consumer Financial Protection Bureau. Ostensibly, they believed that Ms. Warren had overstepped her legal authority by helping state attorneys general put together a proposed settlement with mortgage servicers, which are charged with a number of abuses.

But the accusations made no sense. Since when is it illegal for a federal official to talk with state officials, giving them the benefit of her expertise? Anyway, everyone knew that the real purpose of the attack on Ms. Warren was to ensure that neither she nor anyone with similar views ends up actually protecting consumers. … For people like Ms. Warren — people who warned that we were heading for a debt crisis before it happened — threaten, by their very existence, attempts by conservatives to sustain their antiregulation dogma. Such people must therefore be demonized, using whatever tools are at hand.

Note that Krugman says “conservative dogma,” not “Republican dogma.” Well done.

This Republican questioning is not just a shot across Warren’s bow, but across Obama’s as well, since at some point the people’s Fierce Advocate will have to appoint a Director for the Bureau.

So what about Obama? After heaping much praise on Ms. Warren, Krugman says this:

The interesting question now is whether the Obama administration will see the war on Elizabeth Warren for what it is: a second chance to change public perceptions.

In retrospect, the financial crisis of 2008 was a missed opportunity. Yes, the White House succeeded in passing significant new financial regulation. But for whatever reason, it failed to change the terms of debate: bankers and the disaster they wrought have faded from view, and Republicans are back to denouncing the evils of regulation[.] … By the sheer craziness of their attacks on Ms. Warren, however, Republicans are offering the administration a perfect opportunity to revive the debate over financial reform, not to mention highlighting exactly who’s really in Wall Street’s pocket these days. And that’s an opportunity the White House should welcome.

To which economist Simon Johnson adds:

The next big political battle in Washington – after the budget debate is declared “over” – will likely feature the Consumer Financial Protection Bureau, in particular the fight to determine whether Elizabeth Warren can become as the agency’s first official head. … But before you set aside time in the early summer for potentially gripping television from Capitol Hill, Ms. Warren has to get past Secretary Geithner.

If anything, Mr. Geithner at this stage is more pro-banking lobby than even [House Republican chair of the House Financial Services Committee, Spencer] Bachus. During the Dodd-Frank reform debate, Mr. Geithner would frequently argue that “capital, capital, capital” was all we really needed to fix the financial system. …

President Obama missed his best opportunity to reform the financial system when advisers – including Mr. Geithner – recommended that he defer to the top 13 bankers in March 2009. His team further punted when they failed to push for real change in spring and summer 2010, when the financial legislation was before the Senate. Mr. Geithner and his people were instrumental in defeating the Brown-Kaufman Amendment[.] … Will Mr. Geithner go for the trifecta?

It seems Mr. Krugman is hopeful that suggesting a course of action to the president might create a good result. It seems that Mr. Johnson is less so. I agree with Johnson.

So I suggest a course of action to you: (1) Pre-emptively remind Mr. Election Coming Up, ahead of her nomination or hearings, that his support for her might strongly influence your support of him. (2) Watch to see if Warren is nominated. (3) If she is, watch to see if she is supported.

And by “his support for her” I mean not just “his success at nominating her” — I mean the President actually pulling out all the stops and trying this time to win the battle, instead of relying on that pesky but ever-popular “I kind of sort of half-heartedly tried at the last minute but they just wouldn’t let me.” Because as Chris in Paris has already noted, that ship sailed long ago.

A polite letter addressed to the White House might be the best route; pen-and-ink beats electrons, for the obvious reason.


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