Who is surprised that the banking industry is drawing a line in the sand to prevent the nomination of Elizabeth Warren to head the new consumer financial protection agency?
Sen. Chris Dodd – who wanted to leave a legacy as a pragmatic financial reformer – has begun a frankly humiliating process of damning with faint praise the one individual who has conducted herself with striking integrity throughout the entire bailout and rescue drama of the past two years. “Elizabeth would be a terrific nominee,” said Dodd, the Connecticut Democrat who leads the Senate Banking Committee. “The question is, ‘Is she confirmable?’ And there’s a serious question about it.” This compares in spinelessness to Agriculture Secretary Tom Vilsack’s termination of Shirley Sherrod, and his subsequent “acceptance of responsibility” – what does that mean exactly?
Warren is the Leo Gottlieb Professor of Law at Harvard Law School, where she has focused on the economics of middle-class families. She chaired the congressional oversight panel investigating the bank bailouts and has been a leading advocate for accountability and transparency, and a long-time advocate for establishing the consumer financial protection agency.
Why would Warren not be confirm-able? Because she told the truth about frauds perpetrated? Because she made the full dimensions of the crisis transparent? Because she favored strong penalties for thieves posing as bankers? Because Sen. Bernie Sanders, the Vermont independent, is a socialist and he supports her? Because the banking lobby wants no part of ANY real consumer protection? Yes.
It was not enough to force the financial reform package to place the new agency under the Federal Reserve – the bank of bankers – rather than make it an independent entity, or at least under the FDIC which has some incentive to block banking abuses. No, it must also be an agency NOT headed by any consistent advocate of financial service consumers. So says the Republican Party which, for all its libertarian-sounding phrases, is a complete flunky for the banking industry lobbyists.
But, beyond Dodd, there are some other Democrats scuttling to the political corners trying to avoid publicly admitting their ties to the banking industry, to avoid exposing what they must do for their big funders who are calling in chips to stop the appointment of Eiizabeth Warren. New York Sen. Charles Schumer, for example. His silence is deafening. Rumors of opposition from Treasury Secretary Timothy Geithner surfaced widely, only to be followed by him also doing a Dodd – damn them with praise (but no declared support).
Financial service consumers are overwhelmingly working people, and without a strong advocate in the regulatory process, the entire labor to reform the industry risks being wasted if the regulated ends up also being the regulator — which has been the most critical challenge in the entire “too big to fail” debate. Bottom line — you want credit or a mortgage that doesn’t turn into Frankenstein on you?? — call and write your Senator and Congressperson to confirm Eilzabeth Warren.
On a deeper level, the very fact that a person with Professor Warren’s accomplishments, record and performance is being torpedoed by all the stalking horses of the financial industry – for no other reason than her absence of corruption – raises an important issue for the left. Anti-corruption politics becomes a very powerful democratic force when it is indeed corruption that blocks both economic progress and social justice.
Real consumer protection against fraud and misinformation in financial services is something the “financial sector” has fought for years. The catastrophe that required a $4 trillion public fiscal and credit injection into the economy makes no impression on the people whose reckless, unregulated behavior caused it, and whose bread is now buttered with its spoils.
Confirm Elizabeth Warren.
Photo: Elizabeth Warren, center, head of the Congressional Oversight Panel, testifies at a Senate Finance Committee hearing examining the Troubled Asset Relief Program (TARP) – in other words, the bank bailouts, July 21 in Washington. (AP/Manuel Balce Ceneta)