The White House snatched back one of the few bones it's thrown to the people outraged at the looting of the United States Treasury by failed financial concerns - the big banks and Wall Street. The promised appointment Elizabeth Warren as head of the new agency to protect consumers from the financial services industry has been seriously downgraded. Instead of running the Consumer Finance Protection Agency, Warren's role has been diminished to that of special assistant to the president and adviser to Treasury Secretary Tim Geithner.
"President Obama, sidestepping a possibly heated confirmation battle, will appoint Harvard law professor Elizabeth Warren as a special advisor to the Treasury Department to launch the government's powerful new Consumer Financial Protection Bureau, according to two Democratic officials familiar with the decision." LA Times, Sept 15
An interim appointment would have given the no-nonsense Warren the full authority to structure consumer bureau in the interests of the people. A special adviser role is defined in a New York Times article as follows:
"Ms. Warren will be named an assistant to the president, a designation that is held by senior White House staff members, including Rahm Emanuel, the chief of staff.
"She will also be a special adviser to the Treasury secretary, Timothy F. Geithner, and report jointly to both men." September 15
The title of the Times article says it all: Warren to Unofficially Lead Consumer Agency.
Of course, President Obama could have set it up for Warren to officially lead the agency through an interim appointment. Warren's outstanding efforts and her extraordinary record of being right on the issues are more than enough justification for that.
Even better, the president could have submitted the nomination to the Senate for approval and dared any or all members of that body to challenge Warren. Her record of written and live presentations has been excellent. Why should we believe the storyline that confirmation is out of the question? It's probably just more corporate media stenography dictated by White House operatives who opposed the appointment from the start.
But here's the kicker. The soon-to-be retired Chris Dodd (D-CT) warned that the consumer agency might implode if Warren received an interim appointment:
"Outgoing Senator Chris Dodd (D-Conn.) warned Tuesday that an interim appointment of Elizabeth Warren to head the Consumer Financial Protection Bureau 'jeopardizes the existence' of the nascent agency." Ryan Grim, Sept 14
That would be the same Sen. Dodd who crafted a financial reform bill that had a highly favorable impact on a financial services firm that employs his wife.
So there you have it. The chairman of the Senate Finance Committee who got a deal we'd never get on a mortgage from a big bank and who authored a self-serving financial reform bill is determining who will protect citizens against the rapacious greed of the financial services industry. Telling, isn't it?
How will Warren be treated by "co-boss" Geithner?
Here's an excerpt from Warren's questioning of her new boss at an oversight hearing on the AIG bailout. She wanted to know why AIG counterparties (mainly large financial institutions) got 100 cents on the dollar while investors in other bailed out entities got much less. Specifically, she wanted Geithner to tell her if he'd had conversations with any of the beneficiaries of the sweet AIG deal. Here's a key portion of the exchange.
Geithner: "Where are you going. What would you like to know?"
Warren: "Did treasury have conversations with any of the counterparties…
Geithner: "I was not Secretary of Treasury but I was president of the New York Fed and of course I was central to the basic judgment we reached together to prevent default by AIG. I'm sure that was the right judgment at the time and you're right to point out that that action did help make the system more stable, did have broad benefits to the stability of the system, including the direct counterparties." (Starts 1:44)
Geithner refused to answer the question about conversations with those who would benefit from the AIG deal. He looks like a horses ass and he got beaten up in the press as a result of that encounter. Yet we're expected to believe that the Treasury Secretary will be supportive of Warren's efforts to institute real consumer protection from the same industry that Geither protects so fiercely.
A bit later in the hearing, Warren had Geithner so flustered, he clearly alluded to the foreign banks that got 100 cents on the dollar from the AIG bailout. They are the "people abroad" whom he's so reluctant to mention or acknowledge meeting.
"By preventing default we helped AIG meet it's financial obligations, not just to people abroad, insurance protection, savings protection products, but to its broad counterparties." (author's emphasis) (Starts 4:07)
Warren has been challenging Geithner and the socialism for the rich program known as the bailout from her first days as chair of the Congressional Oversight Panel monitoring the bailout. Now we're expected to believe that she will be given real authority to advocate for the people in an unofficial capacity while reporting to Geithner, as well as President Obama. We are asked, further, to believe that Obama couldn't get the nomination approved by the Senate and that he couldn't appoint her as the consumer bureau's interim director.
The people know a fraud when they see it. This one is in sharp relief against the background of the great wealth transfer program from just about everybody to the self-selected few who own the controlling interest in the executive, legislative, and judicial branches of our government.
The Democratic Party as "The Cooler"
We've entered an extraordinary era in U.S. politics. The financial and power elite are now in a no lose situation. The Republicans are in full lock step with the rigged game for the super rich. This includes relentless anti-union activities; the continuation of the same Wall Street practices that toppled the financial system; a failure to relieve people losing retirements, homes, etc.; and, an economy dependent on wars of any type. Despite their numerical superiority in the Senate, the Democrats claim that they just can't get anything passed without 60 votes, no way around it. That, of course, is fiction. The end result is stasis, the status quo, and the continuation of failed policies with a few cosmetic changes on the margins.
Rather than acting like a real opposition party, the Democrats enable the worst excesses of the Republican era of greed by their failure to undo those excesses. They pawn tepid "reform" and then run to their corner begging for mercy from the people who elected them to bring real change and some degree of social justice.
In the case of Warren, a fake drama was created whereby the White House could get credit for appointing Warren for full Senate approval while snatching back both that appointment and an interim slot; all in the name of political necessity. Whose necessity? Who benefits?
All involved in this destructive drama should be ashamed. But they won't. They don't care because they don't have to care. They're above the law and the real world consequences of a truly open political system.
Chalk it up as another big triumph of The Money Party.
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She reports to Geithner?
Have you seen her on the COP panel (I've overviewed many of those hearings and reports) grilling Geithner and now he is her boss?
Frankly I think she should just go back to Harvard than deal with that. I mean they sidelined Volcker, they have the queen of offshore outsourcing on that team...
Not saying that Warren isn't tough as nails and assuredly navigated many a rough waters...
but would she even be able to influence at all Obama? I doubt it, esp. considering his positions and who he choose in the first place on his staff.
This is shabby corporate politics in the extreme
EP has done an excellent job of covering Warren. She's smart and tough and, most importantly, intellectually honest. That's why they had to marginalize her.
We're supposed to think - Oh, Timmy will pick on her but Barack is there to protect her and make sure she gets her way. Give me a break. This is disgusting.
I predict she'll resign in a storm of controversy.
There's no such thing as "interim head"
"An interim appointment would have given the no-nonsense Warren the full authority to structure consumer bureau in the interests of the people"
No such position exists under the bill. The only way under Dodd-Frank bill to get her into the CFPB w/o senate confirmation is to install her under Geithner. Under Section 1031 of Subtitle F, Geithner is the transitional head of the CFPB. The only way to get Warren into the CFPB, then, is to give her a position in Treasury under him.
Interm appointment yields an interim head
Anything to say on topic?
The one chance at
The one chance at transparency and ....****POOOF****....
This is what Charles Keating was trying to accomplish when he launced his attack on Bill Black.
Shows how much stronger the vested interests have become.
PS - belated Happy Lehman day (the one where the US Government gives out billions to those who brought about the collapse) - How'd you make out?
What a sorry story. I was not involved, thank goodness.
The vested interests continue to call the shots, down to the handling of Warren, who is now a virtual "non-person" in the government.
Elizabeth Warren will be controlled by Obama and Geither.
Warren has been openly critical of Geithner, calling him out on funding AIG. So when you put EW under Geithner and remove her from CBO, you get much better control and you get silence from an important critic of Geithner.
Best still, they can fire her.
I think you are right on target. Put a muzzle on her, short leash, they think.
The interesting action to watch is what Warren does. Will she just take it or will she quit to make a point.
I don't know but I'd hope the latter option emerges. We'll see.
The base called for her appointment. Appointment to an agency needed to go through the Senate where they have hundreds of appointees who passed the House sitting for two years waiting for action. There is bitterness about the Senate stonewall. So she has a job creating what she wanted. I am happy she is there and not beginning the semester at Harvard. The left gets lost in their Kabuki. Time to focus on what the GOP has done over the past two years or watch the left disappear when the GOP takes over once again. The GOP fights dirty and better than the Dems.
I'm not the left
And I like to focus on what The Money Party does, that bipartisan coalition of Democrats and Republicans that perpetuates the rigged game that the owners win every time. They're even congratulating themselves on how smart they are, forgetting they rigged it that way in the first place.
The Democrats are virtually useless, other than not being barking at the moon crazy on social issues. War, bailouts, and nothing for the people. That's their continuation of Bush.
Officially the Economic Populist is not partisan. There is good reason for that. While many authors either come from or have written on the "left" political blogs, many, many times, economic theory and reality have been ignored on the left and instead economic fiction published, trying to justify some sort of political agenda.
Needless to say we can count and say the same thing about the right blogs and we can assuredly state this as fact from the financial press and especially cable noise.
So, you're right at home, focusing in on the money party. That's the problem. While I think all of America, the middle class, know what the real issues are, we have a very controlled media, with controlled messaging, trying to claim the issues are some sort of "left", or "right" or "centrist" (to me that's code for corporate corrupt!) and then they use issue du jour, usually non-consequential and trivial, to prattle on during a news cycle...against diverting us from the fact the banks just got trillions in loans from the Fed or a bunch of corrupt CEOs just got bonuses while we have record poverty now in the U.S.....
So, the point of EP is to put the focus on actual fact, actual economic results, cause and effect of policy x, what works, what does not...with the desired goal to increase the strength of the U.S. middle class and thus increase the strength of the U.S. economy as a macro economic whole.
You guys are really spot on....
...and something really needs to be done and done now. These current political parties are destroying this country. There needs to be a new party with its main and possible sole focus being economic populism. I really believe the social issues are being used to divide people who have common economic interests. Regards,
It is about results
If the broad base of people are in favor of a fair society that encourages true competition and manages to care for those who are in need, one that behaves itself in the world around it, then there's plenty of room to collaborate. Labels shouldn't matter.
But when we're in a period like this one, where the results are always headed in the wrong direction, it's time to share the critique with the official parties and demand better performance.
Warren now "Czar"
Honestly, I don't know if this is ok or she's sidelined. I mean Geithner as boss, she would have to be sidelined.
But, are they telling the truth they really cannot get her confirmed in the Senate?
I mean we already know how corrupt Democrats are (Republicans a foregone conclusion) which is why we could not get real financial reform.
But confirmations are a different story.
Telling the truth
Her confirmation would be a political fight but Obama would have a huge advantage. Take Warren to the public in a really big way, show her videos, get her on the talk shows...MAKE them vote against real financial reform. He'd win outright, I think. But when they say confirmation is a problem, they silently assume (I bet) that they'd make about as much effort for her as they did for foreclosure relief.
It is clear that they're pulling a fast one on the reasons for dropping her to a "adviser" role. They claim it's a confirmation problem. Well, over the past few weeks, they've let it be known that they were submitting her name in nomination, then planning and interim appointment instead of that. Then we got the "special adviser" deal.
When the whole process started with the claim of nomination through the Senate, the "opposition" was there in the same form it was on Sept 16th. One might conclude that, all along, they'd planned to give her the adviser job but figured they'd get a little credit for "trying" to nominate her (even thought the Senate votes would have been the same at the start or end of the process).
If I'm right on this point or any part of the cynical interpretation, she's not going to be given a chance. I think that would be a mistake because she handled Congress pretty good and, if they mess with her, she can just resign, which would be a political disaster.
They waste endless time scheming while they should be working with defined goals and procedures.
My impression is Warren
is going to try to do whatever she can regardless but considering Geithner, Summers and especially TARP, especially the Fed., the reappointment of Bernanke and all of the rest, I have a very hard time believing the Obama administration is interested in anything remotely close to the reforms we need.
I think we'll see, I find it more interesting that Warren is going to do it.
Also, getting one good one in that administration, well, it's one person. the entire team is front loaded with "the money party" as we've documented here many times.
Even worse, economists who speak truth to power, even in Academia are outsiders in many ways.
The last bit of faith I had
The last bit of faith I had in Obama disappeared. So many times I have read that our two party system is just a dog and pony show and that the politicians on both sides are just in it for themselves. We are at their mercy and there's nothing that we can do about it.
Elizabeth Warren in her own words on HuffPo
Link is here.
One thing is certain, she's pretty new communications media savvy. She seems to be going for it, so odds are this was the best she could get.
I'm thinking they are using this as a bribe to keep her mouth shut. It doesn't make sense otherwise. She grills Gaither and now he is one of her bosses? I wonder what scams is going through her mind right now.
wait and see I guess
We just don't know what, if anything she can get done. But bottom line, she's not working on the macro economic side to create jobs.
To Gut the Welfare State, Warren must move from CBO
Warren is a real thorn in the side of Geithner/Obama at CBO. Next year big deals will be made with the New Majority on Social Security, Trade, Medicare and Unemployment Insurance. Warren cannot stay at CBO in the eyes of this Administration. Put her where she can do the least amount of exposure of the Fraud of the Money Party.
Many of the same players of the Contract with America are directing the Puppet Show with the Tea Party. Next year, Newt and the whole crowd will become much more vocal in shredding the remnants of the Net protecting ordinary Americans. Bet that Obama, Geithner and the Money Party will behave like Clinton and Gingrich did in 1994-1996.
is the Congressional Budget Office. That is the "independent" branch of Congress for the purposes of financial/budget reporting.
Geithner is head of U.S. Treasury, he is Obama's treasury secretary, a position of the cabinet.
Warren is now a "Czar", and it's unclear if she is still reporting to Geithner.
Czars are a nebulous reporting position in the Obama administration, but they have been using this to avoid Congressional confirmations.
Warren is putting together the CFPA, which is under the Federal Reserve (cough, cough). That means she has nothing to do with social security or policy in this regard and probably not macro economic policy.
The idea is to create protection on financial products, such as credit cards, home mortgages, auto loans and so on. That's the CFPA's charter.