The spectacle of a bunch of Republican Congressmen spending over two hours pillorying Elizabeth Warren, following weeks of death of a thousand unkind and generally offbase cuts coverage in the Wall Street Journal has led a lot of folks from what passes for the left, and even not so left, to ride in to her defense. A partial list includes Paul Krugman, Simon Johnson, Joe Nocera, Mike Konczal, and Adam Levitin.
The last time I can recall the Journal becoming quite so unhinged about an individual was over Eliot Spitzer. And since Warren seems pretty unlikely to be found to have similar personal failings, the specter of the right throwing what look to be ineffective punches at her makes for a peculiar spectacle. What is the real aim behind this drama?
The reactions to Warren, both on the right and left, are becoming divorced from reality. She has assumed iconic status as a lone mediagenic figure in the officialdom who reliably speaks out for the average person, a Joan of Arc for the little guy. And she drives the right crazy because she is rock solid competent and plays their game better than they do. She sticks to simple, compelling soundbites and images without the benefit of Roger Ailes and Madison Avenue packaging, and she speaks to an even broader constituency, Americans done wrong by the banks, than they target. No wonder they want to burn her at the stake.
But the shadow she is casting is much larger than her current and prospective power. And as we have indicated, the policy she has allowed to become associated with her name, namely, the mortgage fraud settlement, does not serve her or the public at large well.
I want to stress that Warren did a great job at the Congressional Oversight Panel, by taking a post that was likely to amount to a hill of beans and using it to serve as a watchdog of the public’s interest. And I have no doubt that everything she has done since then has been to try to advance causes she very much believes in. But as the old saying goes, “The road to hell is paved with good intentions.”
Let’s look at the three major sets of actors in this drama, the Republicans, the Administration, and the Warren defenders. The Republicans are the easiest to address. They have adopted a very effective posture, which in bargaining terms is to be non negotiable. No matter what the other side wants, no matter how minor or reasonable, the tactic is to not merely to say no, but to do so while screaming bloody murder and throwing all toys out of the playpen.
But why the pathological fixation on Warren? It’s a bit hard to fathom, but some guesses. First, the right loves to personalize its attacks, no doubt to discourage anyone from daring to cross them. Second, they may genuinely believe Warren is a candidate to run the Consumer Financial Protection Bureau and are therefore out to make her so controversial as to assure that this won’t happen.
But this seems like overkill, since any objective reading says that her odds of getting the nod are zip. The Democratic party was firmly in the hands of the bankers, even more in the wake of the Supreme Court Citizens United decision, which has upped the expected cost of the Presidential election to $1 billion. Obama does not have the nerve to try appointing her on a recess to avoid a confirmation fight; he’d still face the wrath of donors (and even under the best of circumstance, he’s been shown to be sorely wanting in intestinal fortitude). Moreover, Geithner has been firmly in the driver’s seat as far as bank policy is concerned and he has been a loyal defender of the industry’s interests. Nothing has changed the basic equation we set forth last September:
The body language of the Administration has been clear from the outset on the question of whether Elizabeth Warren would get its nomination to head of the new financial services consumer protection agency. Despite the occasional public remark regarding her undeniable competence, which really amounted to damning her with faint praise, Team Obama has never been on board with the idea. Michael Barr, assistant treasury secretary, was noised up early on as a possible candidate, but the PR push halted abruptly when her many supporters pointed out the obvious, that she was clearly the better choice. Then we had the no doubt authorized Chris Dodd kiss of death, that he thought she was qualified but doubted she could be confirmed by the Senate.
The reality is that the Administration was never going to appoint her; the only question is whether she can be kept in their orbit and not be a net negative as far as their dubious priorities are concerned. Timothy Geithner has become a central actor on all Adminstration economic policy matters, giving him more reach, and thus more face time with the White House than is normal for a Treasury secretary. Given how Warren has successfully, and correctly, roughed Geithner up before Congress in her role as head of the Congressional Oversight Panel for various TARP administrative shortcomings, he was guaranteed to be at best a non-supporter.
But on a much more basic level, the Warren marginalization isn’t about personalities, although the powers that be love to pigeonhole thorns in their side that way. The clashes reflect fundamental differences in philosophy. Geithner, the Administration that stands behind him, and Dodd all are staunch defenders of our rapacious financial services industry, even though they make occasional moves to disguise that fact. Warren, by contrast, is clearly a skeptic, and a dangerous one to boot, because she understands the abuses well and is able to communicate effectively with the public.
Expect Warren to be pushed further to the sidelines, just as Paul Volcker has been (oh, and pulled out of mothballs when the Administration desperately needed to create the appearance it really might be tough on banks)
And this is precisely what has come to pass. Have we heard zip from Warren, save when she’s been trotted out to serve as a punching bag for dyspeptic Congresscritters? She’s been effectively leashed and collared by being made an advisor and Treasury employee. In theory, taking that post still could have advanced her aims if she was prepared to be bloody minded about it. Her real power lies in her access to media; she’d have more even in an ambiguous role in the Administration than back as a Harvard law professor. And if she was deemed to be too out of line, what could they do? Fire her? That would further enhance her stature and embarrass the Administration.
But it appears the powers that be judged her character correctly, in that Warren is apparently unwilling to take on a powerful bureaucracy. it instead appears she’s acceded to what appears to be a minor-sounding but effective Team Obama threat, that if you are not a “team player”, you get excluded from meetings and decisions. But the part she evidently misses is she’d be able to do more to influence those decisions as a semi or actual outsider using a bully pulpit than from the inside.
And what does this say for her defenders? Talent and being on the side of right count for very little when the cards are badly stacked against you. Unfortunately, her supporters, in wanting to buck her up in a quixotic battle, are also either backing or giving a free pass to the absurd mortgage “settlement” that is now being bandied about (see a long-form critique here). Whatever evil genius fobbed Tom Miller, the head of the 50 state attorneys general effort, off on Warren knew exactly what he was doing.
The media reports are conflicting; the latest, from Shahien Nasiripour of Huffington Post, seem very much influenced by sources friendly to Warren, since it depicts Team CFPB as in the driver’s seat. But whatever version you believe, some facts are clear: the settlement discussions are proceeding in fire-aim-ready fashion. MIller circulated an incomplete term sheet. It stunningly failed to describe what sort of release (as in waiver of liability) the banks would receive if they signed up. No one in a normal negotiation setting ever circulates a partial list of demands. Miller has to know better; this looks like incompetence by design, covertly working to advance the banks’ aims by botching up process in a very basic way.
Another “fire-aim-ready” element is the Administration’s efforts to come to what appears to be an uber-settlement, by joining the state and Federal efforts. Now it is routine, when state securities law examinations and prosecutions find pay dirt for the SEC to ride in and join the effort (can’t have those states encroaching on SEC turf, after all). But state and Federal securities laws are broadly similar. By contrast, the Supreme court has repeatedly rule that “dirt law” is a state matter, and the Federal government has over time severely curtailed the ability of states to regulate banking. So the state and Federal issues don’t overlap much; the idea of a joint settlement thus looks very misguided.
The last “fire-aim-ready” aspect is the lack of investigations. We’ve discussed at length in past posts that the Federal examination was far too superficial, an even more flagrant bit of bank PR than the 2009 stress tests; Shahien’s story confirmed our suspicion that the states have conducted no investigations at all.
Earth to base: you can’t negotiate a good settlement if you don’t know what abuses you are settling for and don’t have a smoking gun or two to force the other side to play ball.
So in this respect, the Republican critics do have a narrowly valid point. When Richard Shelby calls the negotiations a shakedown, he isn’t wrong. If you all you have are vague threats of future action, you are bluffing. Of course, the reality is more complicated: anyone who knows this space is well aware that even a little bit of serious examination would turn up a whole lotta dirt. And the Administration is absolutely not willing to go there because validating some of the charges against the banks, such as the chain of title issues, would blow up the mortgage industrial complex and could well kick off another financial crisis. Shelby is too smart an old fox not to recognize that. So he engages in what amounts to projection: charging the earnest but woefully underpowered clean-up crew with extortion, when that has been the banks’ main line of business since 2007.
So the odds are that all the sturm und drang over Warren will amount to naught. The Administration was keen to get her inside the tent to neutralize her. The fact that the Wall Street Journal and some quick-trigger Republicans are doing their thuggish best to intimidate her should not be mistaken an indicator that she has become effective despite the odds. It has far more to do with their pettiness and paranoia than with her ability to escape the shackles this Administration has put on her.
64 comments
Comments are closed.
Your analysis seems to make the most sense. Could it be tha the most effective path would be Warren out on her own writing a book and being on the lecture circuit. At least the main stream press would interview her then.
The main street media isn’t complicit in all of this?
Warren better stay out of small airplanes and stay away from hidden video recorders. She need not have a Spitzer moment, O’Keefe and Brietbart can simply make one up; and the media and Democrats will play along. All it takes is one amateur editing job to a speech she gives and it’s over for her. The Obama administration is dying for an excuse to jettison her. Whether she is effective or co-opted does not matter now – the right doesn’t like her, so Obama will get rid of her.
The key to dealing with the Right is to point out their hypocrisy. Yes, they may be eunuchs wrt sex, (a big accomplishment for cold hearts, I’m sure. NOT!) but their “free market” is a sham. It is in fact based on a government backed and enforced counterfeiting cartel, the fictional [sic] reserve banking system. So the basic problem with Right is not that they are selfish or greedy (How does one define either?) but that they are THIEVES.
The Right live in glass houses. They are hypocrites to speak of welfare cheats when they are the biggest cheats of all.
But alas, the Left has little problem with theft so long as it suits their agenda. So while the Right live in glass houses, the Left has no stones to throw but weak calls for regulation and bank downsizing. How does one regulate theft? How much is too much? How much is prudent?
Mr Beard,
I am on the right, and I don’t take kindly to being called a hypocrite even when it is true. There are a lot of people on the right (most in the teaparty, I would guess) that would be largely sympathetic to Yves well researched arguments. Both the republicans and the democrats are owned by the banks, in sharp contrast to the electorate.
Elizabeth Warren seems like a lovely person to me, I am sure she is marginalized largely by bank revulsion, but she is also, arguably, a statist, which would get under the skin of most people on the right.
The left and the right are really no different. Most have their hands in the pants of the banks and they are too cowardly to stand up and do the right thing. Money controls Washington and the banks control the purse strings because Obama is the biggest hypocrite of all. There is no one from either side willing to allow the truth to come out. We have a congress full of power hunger, attention seeking elitist stooges.
What is so interesting is just how the stupid the Yale, Harvard, Princeton graduates are ……If Obama got in to and graduated from Harvard Law School it can not be the school it has long claimed to be…….
I think they need to switch the curriculum really isn’t law and business. It is more likely how to get away with breaking the law and how CEO’s can pillage the American middle class because it seems like that is all a few of the graduate ever learned.
Very interesting analysis convincinlgy argued. I hope you are wrong – I voted for change I could believe in, not the same old two party lobbyist-captured system…
The country has become so shallow, What in the world would have led anyone to think Obama was qualified to be President? This is why we have so many liars and swindlers in Washington. Americans are tone deaf to criminals in three piece suits. The same reason people think it is ok for the banksters to still be running their companies, spending bailout funds on complete BS and ending up in the Adminstration as their next stop.
Neither party is better than the other, they are all self serving hacks. Being in Congress is a good GIG……I am sure not one of them ever cracks their wallet to pay for as much as a cup of coffee during their term.
We are seeing it so clearly now. First Obama smoozed he way into the white house with absolutely no credentials, no business knowledge and a very limited if not down right stupid view on foreign policy.
And the joke that was the midterm elections that were again another call for change and now they all swim in the same cess pool.
If people don’t wake up and snap out of their enjoyment of being screwed there is no chance for the little guy because the free market or even something close to a free market have been wiped out. It is a shame.
“We are seeing it so clearly now. First Obama smoozed he way into the white house with absolutely no credentials, no business knowledge and a very limited if not down right stupid view on foreign policy.”
There may be some truth to this critique, but it is a much better description of his predecessor.
What do you mean this country is so shallow?
B.T.W. does anybody know how I can make money on all those people dying in Japan… or whereever that disaster struck?
I don’t have time to watch CNBC.
(Her best work was in the “Maxed Out” film.)”Settlement” don’t jive with what is happening out in the real world, people killing themselves, people’s shit thrown out in the street, families destroyed, financial ruin. This is a g-dam war, and there is no saint in this Bank Driven police state.
Did she discredit her self upon joining the CAST, methinks so.
“validating some of the charges against the banks, such as the chain of title issues, would blow up the mortgage industrial complex and could well kick off another financial crisis.”
I for one doubt this blow up to be avoidable. How exactly can this be avoided?
That’s the biggest unanswered question out there. Yves has called this “extend and pretend” for close to three years.
I, too, have never understood what the endgame for extend and pretend is, short of mega-bank failure or the openly acknowledged migration of our democracy to an oligarchy controlled by a small elite of government and corporate self-selected and self-perpetuating leaders.
I assume Plan A is to wait out the housing decline, so the banks’ portfolio of seconds might actually be worth something, then remove life support and see if they collapse again. Which might explain the mental gymnastics involved in bipartisan plans to guarantee 30 FRMs, prop up Fannie and Freddie, make the government guarantees explicit, the administration’s desire to “move forward,” etc.
If that’s Plan A, I’d hate to see Plan B.
At this my main hope is derived from history. From the death of Julius Caesar to the fifth century, politics in the Roman Empire was a really high stakes game — most of the players got killed, even the ones who were successful for a while. Renaissance Italy was pretty good that way, too. The current .01% are the most successful predators; they haven’t yet started to compete with each other. Maybe when they do we’ll at least have some bitter satisfaction watching the mighty cutting each others’ throats.
A saw a BBC special on the Amazon (river) the other day.
Did you know that when a school of piranhas is isolated from their normal prey they will eventually turn on their weakest members?
I wonder how Rajat Gupta is doing.
Yves’ analysis is cogent. But she continues, mistakenly in my view, to conflate “the Right” with the the Republican Congressional Establishment which is, as she points out, in cahoots with the bankers. I think the political reality is more nuanced.
Plenty of Tea Party and Libertarian elements mistrust Wall Street. Obama and the Dems missed a very good chance to outflank the GOP Establishment on this issue. They probably could have forced a Mortgage deal and used Volcker as a wedge to tame some of the abuses. I think the politics of this would have worked to their advantage.
It’s probably too late now. The “dividend approval” decisions on Friday eliminated any need for the banks to play ball. Sadly, Warren and Sheila Bair are destined for oblivion. The band plays on.
“dyspeptic Congresscritters” – I loled at that
Yes, I think Yves is 100% correct. I think it’s amusing that in Krugman’s column today, at the very end he wishes that the Obama administration could use these baseless assaults on Warren’s credibility to re-make the case that the banks are bad, regulation is good, and Warren is a good consumer protector advocate. The only problem is that I don’t believe Obama has any interest in making that case. He didn’t lose control of the narrative by accident. Obama pandered to the left by saying some mean things about the banks during the height of the crisis, but then quickly let the whole thing drop to appease his buddies on Wall Street. After all he does have some politicking and fundraising to do for 2012 — and he isn’t likely to get very far if all of Wall Street hates him.
I’d love to see Warren quit, write a candid book about her dealings with members of both political parties and how they’re joined at the hip with banksters and the rest of corporate America for the purpose of looting and screwing the middle class of this country, and then launch a 3rd party campaign for the Presidency in 2012. I’d vote for her and volunteer to work for her campaign.
The longer Liz Warren stick around Washington, the less effective she’ll be. She must realize that Obama does not want her in the neighborhood. He is just waiting for her to trip, to make a mistake however small, (and there are so many people in DC willing to help her do that) to ditch her. He would make an effort to sincerely look really sorry. It’d be quite a performance, no doubt about it. But it would be just that…a theatrical performance, long on wind and short on substance.
BTW, people have already noted how silent Obama has been about this painful hearing in Congress and the overall treatment she’s received. The Hound of the Baskervilles my dear Watson!
Me think the best she could do would be to try to get the best “settlement” possible. Of course, this won’t happen. The day the banking whores (Tom Miller, Treasury, the Administration) make the “settlement” definitive, Liz Warren should call it quit…publicly! Given her unquestionable talent to explain complex financial matters in an understandable English, she could easily demolish all the stated reasons behind this immense and criminal give away to the banksters.
Make no mistake about it: looking at several interviews with Liz Warren, I was struck by how journalists and talking heads of the national media positively love her. (We’ll exclude Planet Money team from NPR who were unbelievably rude and confrontational to her the only time she was there and the usual asshats from the extreme far right)
It is easy to imagine the (well deserved) colossal embarrassment of the Obama Administration. In the minds of a lot of people, this would be the final “no way out” confirmation that this Administration, like any other, is a pet slave of the banking industry.
Would it change anything? In the short term, probably not much. But episodes like I just suggested are like individual grains of sand that pile up over time. And as Chaos Theory has demonstrated, one never knows which grain of sand will induce enough instability in a given system to force inescapable changes in the structure of the pile.
There has been a lot of grains falling on the social pile in recent years. The powers that be should read about Chaos Theory experiments. Their repeated failures to predict big changes should inspire them to be more humble toward the grains of sand; pushed by strong enough winds, said grains erode the biggest rocks into oblivion.
Warren is a Washington outsider. Warren’s resolve to honor her role as steward of the American public’s best interest is despised and feared. They want her resignation. As like Born, Warren was to be a face to quell the public’s ire. Brooksley Born is the prime example of what will be Warren’s fate. Born another Washington outsider hired by Clinton to head the CFTC took her stewardship seriously. The big boys club knew she’d put an end to their destructive financial games of greed, power, and ruination of the economy to be heaped upon the American public’s back. Her enemies the same men who exploited their positions and were rewarded in the private sector. There is no honor among thieves and villains.
Excerpt from Frontline’s The Warning: “I didn’t know Brooksley Born,” says former SEC Chairman Arthur Levitt, a member of President Clinton’s powerful Working Group on Financial Markets. “I was told that she was irascible, difficult, stubborn, unreasonable.” Levitt explains how the other principals of the Working Group — former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin — convinced him that Born’s attempt to regulate the risky derivatives market could lead to financial turmoil,…Born’s battle behind closed doors was epic, Kirk finds. The members of the President’s Working Group vehemently opposed regulation — especially when proposed by a Washington outsider like Born.”
Neither Obama as did Clinton ever expect these women to pick up the sword and shield to honor, protect and defend. Chivalry amongst brave women, who knew?
Elizabeth Warren is a credible, honest person.
You are right, she is a Rorschach test.
And people notice.
I know how much we all love to expose the Machiavellian poseurs, their attendant bootlickers, courtesans and assorted hatchet men. I know you are at the very least, are trying to put fire to the feet, in hopes of inflicting pain, if not some actual small measure of movement on the change o meter dial in DC. But, I am not buying this Elizabeth Warren is being attacked by crazies for no good reason, because its all a fraud. Window dressing etc. Let’s look at some news items about her actions so far:
http://www.npr.org/2011/01/07/132723728/gen-petraeus-wife-makes-war-on-fraud
She has tapped Holly Petraeus, wife of THE GENERAL, to head up a special office for military families and their financial issues. You may not know this, but the Navy Federal Credit Union is quite large. Well, maybe Wall St is snickering, but it has over $44BILLION IN ASSETS.
https://www.navyfederal.org/about/about.php
The military has known how to take care of itself in more ways than one, and apparently Liz seems to know how to pick an ally. I think this move speaks for itself. But know this, there already has been a federal law to protect service people for decades from foreclosures, repossessions and high interest rates on consumer credit. But if you do not know about it, it is a useless law. Having a credit union run by active and retire service people and another layer of protection within the Fed is not a bad idea. The more protection the better. And know this as well, standing military is about 2 million and retired, or just former military, in the 10 of millions, approx equal to union membership in the USA.
Elizabeth Warren is a classic example of a powerful person, if you define power by the capacity to execute policy in the face of organized opposition. She has been a forceful advocate, campaigner for this kind of federal protection for many, many years. I first heard of her being interviewed by Terry Gross on Fresh Air years before the crisis, discussing what else, consumer rip offs in the form of credit car contracts.
Liz has been authoring books and going out on the stump for the middle class for well over 10 years. You can go to Amazon yrselves. She is a Ralph Nader class consumer advocate and now is in Washington DC setting up a protective agency which will have an independently chosen leader and a budget that is a fixed % of the Federal Reserve. It was carefully crafted for a measure of autonomy and is now being constructed by a peerless advocate, not a boot licker etc. She is being attacked so strongly, because the opposition knows this is one part of a growing bureaucratic regulatory apparatus. It may not be the first, or the best, but taken together as a system, here is yet again, another agency, that did not exist before. If it is not used to its full potential, it can and will be in the future and they know it.
Furthermore, Liz is not a complete team player, is outspoken and is a real threat to see FinReg make some headway.
http://www.politico.com/news/stories/1010/42995_Page2.html
This is her condemnation of TARP and AIG in particular. We live in a world wide capitalist system. There is no socialism at home or abroad about to remove the power of the nation state system and capitalist global system. There is no magic bullet policy or agencies. However, taken together, there is a collection of laws, agencies and regulations that try to keep the system from corrupting itself and collapsing. It is not always staffed by people who carry out the stated mission due to political capture or if not out right capture, organized political opposition, such as you see when the republicans gain a measure of majority force in legislatures or executive offices.
As a stand alone agency, the CFPB will not solve many problems, but will be another division in the army of state power. It is more than we had before and can be augmented, now that it exists at all.
Very intelligent reasoning. You write as if you’re familiar with how this circus works in Washington.
You are laboring under the assumption she will get to head the CFPB. That is simply not happening. It is the first head of an agency who puts a stamp on it. She’d been cashiered with this move. The fact that she’s defending this half-baked settlement is really telling. It would be much better to let the state AGs move forward on their own. Enough will find real dirt to bring the banks to the table eager to settle.
The fact that she is great on TV does not make her an effective bureaucratic infighter. Geithner runs rings around her on that one. This move is all about keeping her OFF TV as long as possible.
Perhaps to show support a “Thank You” note campaign to Elizabeth Warren as she crusades for us. It’s a lonely battle to bear the flag and lead the charge whilst surrounded by Benedict Arnolds. Got an address?
I shouldn’t have read this…I have BP issues already.
This is the kind of stuff that makes me start thinking desperate thoughts about voting Republican in order to just get this whole ideological train wreck over once and for all.
Paul Krugman: “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.”
Krugman, still a believer.
Professor, newsflash, there are no differences to highlight. Everybody is in Wall Street’s pocket these days, the President first and foremost.
Can’t help but like the old neo-liberal, liberal, though. Yes, he sees the giving of trillions of free dollars to insolvent criminal organizations — so they can conjure up mindless exponential growth in a world of exponentially depleting resources — as one-way monetary ticket to human prosperity.
Sill, I believe he is a decent man; devoted, in his own misguided way, to the common good.
A well-crafted and grown-up analysis: I had come to similar conclusions without the information-infrastructure you have, having read Nikos Poulantzas in 1975-6 on the Theory of the State. Some one should have an Anti-Obama site, a repository of Anti-Obama from the progressive perspective;;; a sickening man who chanted “change, change,” now cheating the youth of their future.
Kudos.
You mean like this:
http://obamascandalslist.blogspot.com/
You may be right about Elizabeth Warren, and she may have decided to muzzle herself in the interests of being a team player and gaining influence. On the other hand, it remains unclear how effective the agency she’s been building will be. She may have been building, behind the scenes, an agency that will be effective and powerful in the long run. We don’t yet know. I realize you’re disappointed in the AG settlement but I think the jury is still out on this whole thing.
Still, the fact that the only remaining fight to be had at this point, and likely a losing one at that, regards the CFPB is sign enough that in the biggest picture the war was lost long ago.
The person who “builds” an agency and puts a stamp on it is its first head, not someone playing the “pre birth” role that Warren has taken. And as indicated, there is no way she will be chosen to head the agency.
FinReg was gutted in the House and then passed to the Senate where it was gutted even further. The CFPB, the Consumer Financial Protection Board, became a shadow of what it might have been as a result of all the whittling down in Dodd-Frank. It was really something of a surprise that the CFPB survived at all.
But I have to say we have seen this all before and it is standard operating procedure for the two wings (Democrats and Republicans) of our one corporatist party. During the healthcare debate the one option which was known to work and deliver better healthcare at lower costs, universal single payer, was taken off the table and any discussion of it was squelched, not just by the right but by “liberal” Democrats as well. Having removed the only real solution, the next step was the gutting of healthcare reform in the legislative process. That went on for nearly a year. The result was a bill that overwhelmingly favored Big Insurance. But things did not end there. Now as we see there are multiple efforts to undo what little was done.
I would say the exact same thing happened with FinReg. Real reform was never part of the plan. A long legislative process produced a bill with little substance and many blanks to be filled in later, mostly by the industry’s tame regulators. And there is a strong push to undo and eliminate what minor positives the bill inadvertently contained. The attacks on Warren and the CFPB are just part of this endgame.
Re Warren, the right loves a good demon to rail against and the left has a deep-seated need for heroes, perhaps because it has so few. I think we need to keep in mind that Warren did not end up at Harvard by accident. She may be liberal but she is also very much Establishment and that places real limits on what she understands and what she is willing to do. Establishment liberals believe in and are members of the system. They may criticize aspects of the system but never the system itself. It’s why I think it’s a mistake to consider Warren an outsider. It would be more accurate to say that she is less of an insider, but still an insider. It was her Establishment cred that got her her position on the COP from which she could criticize the TARP but it was her identification with the Establishment that allowed her to take a position in the Administration that had decimated the CFPB and seek to salvage what was left of it.
Some might have wished that she might denounce the criminal and kleptocratic nature of our elites, especially that of Obama and the Democrats, but quite simply Establishment players, even liberal ones, just don’t go there, never will go there.
That’s the push me-pull me essence of people like Warren. We see her being critical yet still failing to complete the critique. We go: well, if she can see this, why can’t she have seen that? She must have been snookered or fed bad information. No. That is the nature of the Establishment liberal. They only go so far and no further. They always go only so far and no further. If they could go further, it is unlikely they could work inside a government as corrupt as ours, or be asked to.
I think you’re right.
Z
As an outside observer, the political game in Washington DC is symptomatic of an insidious cancer that will eventually
have the beast.
Elizabeth Warren is getting the Ken Starr treatment. She can do it! She can save the Republic! A drowning Republic will clutch at a straw.
Warren, who I respect in many ways but thought lacked the political tenacity to be effective while inside the big tent, sort of telegraphed this latest probable sellout when she was a member of the congressional oversight panel on tarp and she bought off on the misleading narrative that almost all the tarp funds were paid back by the banks when it was really just the workings of a shell-game between the fed, the government, and the banks … and she had to know that.
If I am, someone please correct me … but that’s the way that I saw it.
Z
Elizabeth Warren is only one person, and without a position of truly great power like the Presidency, but she is about as great a person as you’ll find anywhere, brilliant, kind, and courageous.
I recommend that everyone read her books The Two Income Trap and All Your Worth. The latter I believe is the best personal finance book on the market, by far. I’ve used it at the University of Arizona since 2005.
I just listened to a depressing Congressional Hearing headed by Ron Paul ( http://financialservices.house.gov/Hearings/hearingDetails.aspx?NewsID=1802 ).
It is depressing because RP, a supposed libertarian, is apparently in favor of a government enforced gold standard. While you liberals and progressives wring your hands about regulating an inherently dishonest money system, the fascists are planning to use this crisis to enslave us to a shiny metal.
We need fundamental reform. That should be obvious after 317 years of failure.
“is apparently in favor of a government enforced gold standard.”
I don’t think this is correct. As I understand it, Ron Paul favors a free market money system. Government completely out of the business of issuing money, banks (or even individuals) can mint or print their own specie-backed notes. I think the idea is that the sounder money will win out over bad, counterfeit money.
To be sure this has lots of problems (Number one: completely unimplementable. The American Ruling Class is never going to give up their number one scam), but it ought to be understood as an attempt to try and fix some notable problems with our current system. Which is basically that the American Ruling class can stealthily transfer wealth to itself via printing.
“the fascists are planning to use this crisis to enslave us to a shiny metal.”
Sorry, but who do you think the guys set up our current system are? Socialists? And what gave you the idea that we’re not slaves now?
“RP, a supposed libertarian”
Ron Paul’s Libertarianism is a personal philosophy. I think it’s far less significant than people realize. Just like Bernie Sanders’ supposed Democratic Socialist ideology.
Both these gents are national level politicians. And because they are participating in the political process within the currently existing structure, they are essentially engaged merely in trying to make the existing machinery and structure function better. This is, like liberalism, an inherently Conservative (in the sense that it conserves this flawed system) project.
The system simply cannot be made to work adequately, or made to meet the problems and challenges that are coming down the pike. So yes, we need fundamental reform. But how to accomplish it? I don’t think anyone has a good answer to this, but Ron Paul’s plan to preach anti-interventionism and ending the Fed to the Republican base is about as good an effort we’re going to get. Sure beats any other politician’s plan to get his or her @ss into office, as selling out to achieve that is exactly the reason why our system works so pathetically poorly.
But I agree that RP’s approach is in other ways woefully inadequate and conservative. All efforts to “reform” this aspect or that of the system are essentially proposals to let the Wall Street Scamsters keep the wealth they stole from the rest of society. But this could be said even of liberal reformers like Elizabeth Warren. And while I would dearly love to see some national level figure go completely Che Guevara and demand that our Financial Class be arrested and interned in Gitmo en masse, and all the wealth they stole from the rest of society over the past 40 years confiscated and redistributed to the poor, I think I have to face reality and acknowlege that that sort of talk is just a tad too radical right now for the American people and is likely to put them off rather than gain their support.
As I understand it, Ron Paul favors a free market money system. Government completely out of the business of issuing money, Rabid Cranky Troll
Who else should issue legal tender for government debts, taxes and fees, but government itself? Should we have to buy gold, for instance, to pay our taxes? Would that not be governemnt privilege for a particular shiny metal and those who own it? However, the government’s money should NOT, as it currently is, be de facto legal tender for private debts else we allow the government to counterfeit (the stealth inflation tax) private money.
banks (or even individuals) can mint or print their own specie-backed notes. I think the idea is that the sounder money will win out over bad, counterfeit money. Rabid Cranky Troll
Fine. Let the PM bugs play with shiny metals and usury to their hearts’ content in the private sector. That’s all they should honestly seek. Instead they are seeking to reverse the current injustice and replace governemnt counterfeiting of private money with private counterfeiting of government money!
The solution is separate government and private money supplies. The government is force and its money (fiat) is appropriately backed by force. It needs no and should not have any other backing else it endorses (with force ultimately) a particular form of private money. The private sector is voluntary cooperation. Its money must be completely voluntary (no government endorsement).
But don’t take it from me: Jesus solved this problem 2000 years ago except we are a bit slow to catch on it seems:
Matthew 22:16-22
Should we have to buy gold, for instance, to pay our taxes?
Gold backed doesn’t mean made out of gold.
the government’s money should NOT, as it currently is, be de facto legal tender for private debts else we allow the government to counterfeit
As I understand it, the End the Fed crowd thinks the situation is a bit worse than that. Right now the government isn’t in charge of creating new money – it’s the Federal Reserve, which is owned by private banking interests.
Who else should issue legal tender for government debts, taxes and fees, but government itself?
You’ve lost me a bit here… why the distinction between private debts and government debts? At the end of the day it boils down to resources, labor, and goods. We could set up a 2-tiered currency system I suppose but I’m not sure that would really solve any problems. The reason why the goverment collects money in the form of taxes and fees is presumably so that it can exchange them for something that has actual value – i.e. pay its employees so they can go and buy themselves food, etc. So even if we have a 2-currency system, if government counterfeits its currency you’re going to have to deal with that by mandating a fixed exchange rate, or some such measure. It can’t help but skew and influence the real goods and services economy.
Jesus solved this problem 2000 years ago except we are a bit slow to catch on it seems:
But he’s talking about God vs Government, not private sector vs Government.
But speaking of solutions for modern day problems found in the Bible, I think I can do one better and point to this as a solution to the banking crisis. :D
In Leviticus, of all places. Hah.
Sorry, not the banking crisis – I mean the economic meltdown caused by the fact that the American consumer is no longer able to buy because we’ve outsourced too many of their well-paying middle class jobs and they’ve reached debt-saturation.
A Jubilee would absolutely wipe out the banks and make the Financiers go flat broke. Which is exactly what needs to happen.
Oh and distinction between gov’t creating money and Fed creating money – basically it’s an issue of who is getting to collect seigniorage here. If government was printing new money and using it to provide welfare for the poor, arguably that might not be so bad. It would be one way to counteract the wealth trickle up effect. But if the Bankers are becoming richer every time new money is added to the economy… well, that just hastens wealth concentration at the top.
“Should we have to buy gold, for instance, to pay our taxes?” FB
Gold backed doesn’t mean made out of gold. RCT
There is no real difference unless fractional reserves are practiced which the Austrians claim to be against.
“the government’s money should NOT, as it currently is, be de facto legal tender for private debts else we allow the government to counterfeit” FB
As I understand it, the End the Fed crowd thinks the situation is a bit worse than that. Right now the government isn’t in charge of creating new money – it’s the Federal Reserve, which is owned by private banking interests. RCT
True but I am looking ahead of that to when the US Treasury issues its own fiat.
“Who else should issue legal tender for government debts, taxes and fees, but government itself?” FB
You’ve lost me a bit here… why the distinction between private debts and government debts? At the end of the day it boils down to resources, labor, and goods. RCT
Ideally yes, but we are far from ideal. We are not short of resources, labor or goods but money in the right hands. And the reason money is in the WRONG hands is because we effectively have a government enforced counterfeiting cartel via the government enforced monopoly money supply for private debts.
We could set up a 2-tiered currency system I suppose but I’m not sure that would really solve any problems. The reason why the goverment collects money in the form of taxes and fees is presumably so that it can exchange them for something that has actual value – i.e. pay its employees so they can go and buy themselves food, etc. RCT
No. The government (let’s include the Fed for simplicity) taxes to maintain the purchasing power of its fiat. Taxation is akin to money destruction. Like I said the backing of fiat is force. Wiki explains: Chartalism
So even if we have a 2-currency system, if government counterfeits its currency RCT
The government CANNOT counterfeit its currency since it is the ONLY one who should issue it. Who else?
you’re going to have to deal with that by mandating a fixed exchange rate, or some such measure. It can’t help but skew and influence the real goods and services economy. RCT
No fixed exchange rate is necessary. The government’s money would be sold on the open market by those who received it (government workers, SS recipients, the military, etc.) to those who needed it to pay taxes. The exchange rate would be set by the free market. The income and capital gains tax would have to be abolished to be replaced with excise taxes on things that could be objectively measured such as gallons, pounds, KWHs, etc. The government should be completely oblivious to any money form but its own fiat.
“Jesus solved this problem 2000 years ago except we are a bit slow to catch on it seems:” FB
But he’s talking about God vs Government, not private sector vs Government. RCT
The principle is similar. Government is force and is distinct from all other aspects of society. It’s money should be distinct too else we distort the private sector as is evident today.
But speaking of solutions for modern day problems found in the Bible, I think I can do one better and point to this as a solution to the banking crisis. :D RCT
Yep. I advocate debt forgiveness too. :)
In Leviticus, of all places. Hah. RCT
The Bible is filled with economic wisdom, including Matthew 22:16-22. It really is the solution, I bet. It should please every interest worth pleasing.
The much touted CFRB is crippled because Dodd-Frank says that Fed policy is paramount. To ensure that this always remained so, they made CFPB an arm of the Fed.
But that’s not enough for TPTB. No doubt they want to see the CFPB run like the Fed’s Inspector General’s office (see Congressman Alan Grayson questioning the Fed inspector General Elizabeth Coleman.)
I’m not sure that Warren has been “leased and collared.” She has always seemed to me to be independent-minded and dedicated to her consumer-friendly agenda. She will either be the first the lead the CFPB or a more effective critic (having learned a great deal about the players and the game). I think its too early to write her off.
“I’m not sure that Warren has been “leased and collared.””
I think the problem might be that she is part of the technocratic elite. People like that, who do well in our system (by which I mean, she isn’t trying to feed a family of four on $30K of annual income, exactly) tend to have a lot of trouble understanding that our system is *really* messed up and broken.
So, no indication that she cares about how to confiscate all the wealth the Financial Class looted from the rest of society over the past 40 years. Merely thinking about how the looting can be kept at “acceptable” and sustainable levels, by regulating the thievery.
There’s no indication that she’s pleased by the looting either.
A social movement that makes the changes you seek will take a lot more than an outspoken Elizabeth Warren. Americans are only now waking up to the problems.
“There’s no indication that she’s pleased by the looting either.”
That’s true. Clearly she’s an opponent of the looting, which makes her one of the “good guys/gals”.
I was merely pointing out that she’s thinking in terms of fixing the barn doors, rather than first going out and getting back the horses from the horse thieves.
“Americans are only now waking up to the problems.”
Sadly, I have to disagree. And even folks who understand there’s something wrong can much too easily misdiagnose the problem. Or fail to come up with a proper solution.
Come to think of it, even I fall under the latter category. I have no idea how we can fix this.
How much have you seen her on TV? That tells you how leashed and collared she is. She’s only been hauled out because Congress demanded it.
And as I said earlier in the thread, she is not getting the nomination to run the CFPB. She said very early on that she didn’t want it, I can find the link in my archives. She may well have changed her mind, but that sort of remark was not helpful either.
I think associating her with this mortgage settlement, which looks pretty certain to crater (a lot of state AGs are not going to sign up), was part of the plan to justify not nominate her. Obama needs to maintain the appearance of not being a right-winger, so he needs cover for some of the moves he intends to take.
Yves, your analysis is cogent. She DID say she didn’t want it. She HAS been silent.
And I am just as skeptical of Obama-Geithner. But I can’t believe that she didn’t recognize the dangers of working with the Administration, and I don’t see what she gains by allowing herself to be compromised (I don’t see her becoming a banker or pol).
Perhaps Warren feels she must guard against being seen as having an anti-bank bias (much as Obama could not let himself be baited into being labeled an “angry black man”)?
So, maybe its wishful thinking, but I’m just not ready to write her off just yet.
If she isn’t gathering data to write an expose, I don’t know what she’s doing.
If she’s trying to parlay this into a job at AIG, well, I don’t see it happening. But crazier things have happened.
It seems to me if this nebulous settlement is cratered (my preference) this (uncomfortably reasonable) analysis is moot.
She hasn’t been specific about her goals re the ‘settlement’, so I want to think she judged it as a non starter but elbowed her way to a seat at the table anyway to try to get something for the CFPB, and engage with the un unified AGs, or to at least maximize her irritant value re Timmy and the admin. What balls! Maybe that’s a fantastic, deluded view, but she’s the last person I’m willing to throw under this bus or blame for the failures of her opponents. Your logic seems sound, but its hard to embrace.
If she finally does comes out and embrace a bad settlement,then all bets are off. But I think (pray) this settlement will not happen. The overwhelming spin that a settlement is imminent doesn’t ring true to my ears.
She was on CNBC this morning. The scam bots were brutal…
Chartalism
A Jubilee would absolutely wipe out the banks and make the Financiers go flat broke. Which is exactly what needs to happen. RCT
Since the banking system has cheated savers too, I advocate an equal bailout of the entire population with new legal tender fiat, combined with fundamental reform.
Oh and distinction between gov’t creating money and Fed creating money – basically it’s an issue of who is getting to collect seigniorage here. If government was printing new money and using it to provide welfare for the poor, arguably that might not be so bad. RCT
Actually, with truly separate government and private money supplies, the government would have to tax almost as much as it spent in order to avoid losing purchasing power in its money. But the private sector would benefit from government overspending since the money used to pay taxes would become CHEAPER in exchange for private monies.
Slick, eh?
Truly separate money supplies achieves what the gold-bugs claim to want (fiscal responsibility) but without the silliness of a PM based money.
Ms. Warren does not need to be defended as much as she needs to be enjoined in solidarity. After all, the drive to end corruption is what it’s all about, not just her. And in this, both parties will soon find out that again, they are on the wrong side of history.
After all, the drive to end corruption is what it’s all about, not just her. Jim Crittenden
The system itself is corrupt which is why there are so few indictments; most of the wrongdoing is legal!
But some persist in thinking they can regulate theft to a “prudent” level.
And in this, both parties will soon find out that again, they are on the wrong side of history.
I feel your pain to quote one former president. But who is on the wrong side of history is pretty much unclear.
It looks like oligarchy grip on the society tremendously strengthened during the past 20-30 years and nothing suggest forthcoming weakening.
Judging from the recent emergence of tea party, “What the matter with Kansas” problem with half of the US states, Sarah Palin phenomenon, etc it might well be us who are on the wrong side of history. As sad as it is…
it might well be us who are on the wrong side of history. kievite
There is little danger of much more history being written,imo. I figure “The End” can’t be far off. Of course we might put it off as Nineveh did (for 120 years or so) if we repent.
Why? The money system is broken. We will either fundamentally reform it for the better or it will be further centralized leading eventually to the “666” economic system of the Devil.
How many of you laugh at that? But widespread unbelief is also predicted for the End Times.
As with obama, it is with warren, identity politics is a fools errand. Better to understand the forces at play and the likely victor, how you wish to position yourself is a personal one.
Skippy…national / international fiance vs, the commons is turning into a 5 day test cricket match methinks. Addendum how many umpires have side-bets or have been bought off, monetarily or ideologically?
Better to understand the forces at play and the likely victor, how you wish to position yourself is a personal one.
All I know that there is an ample supply of educated or even well educated young people who have no future in the current system. As states became simply tools for enrichment of oligarchy that’s not a stable situation…
It looks like they start shifting their primary loyalty away from government and state they are living in to a wide variety of other entities: religions and sects, parties, ethnic groups, gangs, ideologies, and so on. Well educated young people with nothing to do and some radical ideology that makes their lives meaningful (religious or not) might be an explosive mix, it already was a couple of times in history.
Too true, stored energy of sizable mass_once released_is formidable.