Recent Items

Inept Obama “Anybody but Warren” Stance Reveals Fundamental Bank v. Middle Class Fault Line

Posted on by

It is obvious that Elizabeth Warren should head the Consumer Financial Protection Bureau. No less than our favorite NC nemesis, the staunch Administration defender Economics of Contempt, has said she is “tailor made” for the job. In the face of increasingly vocal bank opposition to the notion of an effective bank watchdog for consumers, she’s done better than anyone anticipated. And despite the Republican bluster about using a pro forma session to keep the Senate in business to block a recess appointment, the Democrats could break that maneuver if they wanted to.

So why does Team Obama try to hide its choice not to appoint her behind silly “compromises” like its trial balloon of serving up the CFPB’s number two, Raj Date, as a candidate to lead the agency? The Republicans have already said they will approve no one unless they can cut off CFPB’s air supply by controlling its budget. You can’t negotiate with someone who won’t negotiate. Your options are to defy them or capitulate.

So this “compromise” is an inept sleigh of hand to shift responsibility for the Adminsitration’s refusal to appoint Warren on the Republicans.

The failure of the Team Obama to move beyond this impasse is revealing. It isn’t merely, as we have repeatedly mentioned, a sign that the Administration is in bed with the banksters. That’s a given. We predicted that Warren would not get the job.

But what is astonishing is how she has managed to out maneuver them and how Team Obama has failed for months to come up with responses. It isn’t as if this crowd feels any compunction to hide the contempt it has for the idea of keeping prior promises; just look for some of many examples, at this video Lifting the Veil, from 7:00 to 13:00, or at Glenn Greenwald’s discussion of how in mere weeks what was promised to be a mere fly over exercise in Libya is now turning into another nation-building exercise.

The Warren fiasco reveals deeper layers of the Administration’s character defects: its indifference to the plight of the middle class and its tactical incompetence. These flaws appear to be so seriously at odds with the carefully cultivated Obama brand is that its operatives are desperate to hide them. Lying about what we do to whom in parts of the world that most Americans can’t find on a map is standard operating procedure for Presidents for at least the last 50 years. The Obama Administration feels it can do what it pleases on the defense and anything it can conceivably call the national security front.

Warren happens to be applying pressure on what is turning out to be a central fault line for this Administration. It bought the bankster line that giving them first priority on the “fix the economy” money would not only appease this key donor group, but it would also work out just fine on the economic front. Enough peasants would be lifted up along with the financiers’ yachts that the economy would be, if not in rude health, at least enough on the mend to assure an Obama re-election.

But that is not how things are working out, as we know all too well. The President is waking up to the fact that if the jobless situation is as bad as it is now next year (and it is possible it will be worse), his reelection bid is going to become quite complicated. Ditching Warren overtly, as he clearly would like to, will cost him valuable campaign support among the activists who are still somewhat warm to the administration and will provide what remains of his grassroots army for 2012.

And the gap between the banks’ demands and what the great unwashed populace wants is widening. Team Obama relied on several devices to paper over the differences. First was the time honored political practice of kicking the can down the road. Economists came up with fancy rationalizations that more or less amounted to “Time heals all wounds.”

Second was cheerleading. If the economy was looking less awful and the stock market rallied, it could at best restore confidence and help spur a recovery and at a minimum improve the optics of what was actually happening. The public, however, is no longer interested in seeing the officialdom demonstrate its skills in the application of porcine maquillage.

Third was stunt fights with the banks, or as Adam Levitin described it in the context of bank cease and desist orders, phony penalties:

The bank regulators are going to provide cover for the banks by pretending to discipline them very hard, but not really doing anything. The public will see a stern C&D order, but there won’t be any action beyond that. It’s as if the regulators are saying so all the neighbors can hear, “Banky, you’ve been a bad boy! Come inside the house right now because I’m going to give you a spanking!” And then once the door to the house closes, the instead of a spanking, there’s a snuggle. But the neighbors are none the wiser.

The 2009 stress tests seemed to prove this approach to be a winner. Almost daily headlines over two months seemed almost designed to convince the public that this assessment was a serious exercise, when as we discussed at length, it was anything but. Yet dissenting voices were frozen out of the mainstream media. For instance, a William Black said at the outset “there are no real stress tests going on” Even after giving his critical views on the widely watched Bill Moyers show part way through this charade, no journalist called Black.

But none of these approaches are working any more. Kicking the can down the road and cheerleading, which in finance circles is called extend and pretend, have hit their limits. The sale of the assets in Maiden Lane II, one of the AIG vehicles, has precipitated a broad selloff in credit instruments, with the subprime ABX doing a cliff dive. The fragile bank system cannot bear too much in the way of reality, but between periphery county stress in the Eurozone and the fundamental and legal tsuris afflicting the RMBS markets, it is going to be hard to keep fantasy valuations going much longer.

The banks, rather than playing nicely along with the Administration’s regulatory theater and having the decency to be appreciative of the useful cover it provides, have instead escalated their demands. All that coddling has gone to their heads. It isn’t enough that they get to pay themselves record bonuses; they are now taking a page from the Republican playbook and going for total victory. They recognize what we pointed out early last year, that Obama’s March 2009 decision to reconstitute the banking industry rather than bring it to heel ended his freedom of action :

Obama’s repudiation of his campaign promise of change, by turning his back on meaningful reform of the financial services industry, in turn locked his Administration into a course of action. The new administration would have no choice other that working fist in glove with the banksters, supporting and amplifying their own, well established, propaganda efforts.

Thus Obama’s incentives are to come up with “solutions” that paper over problems, avoid meaningful conflict with the industry, minimize complaints, and restore the old practice of using leverage and investment gains to cover up stagnation in worker incomes. Potemkin reforms dovetail with the financial service industry’s goal of forestalling any measures that would interfere with its looting. So the only problem with this picture was how to fool the now-impoverished public into thinking a program of Mussolini-style corporatism represented progress.

And here is where Warren and the CFPB come in. In the face of mounting evidence that the banks are in the driver’s seat (the infrastructure land grab here and abroad and the spectacle of Jamie Dimon making demands of Bernanke are two of many examples), the Administration needs to mount a credible pretense that it is doing something for the average person. Since its HAMP mortgage mod program looks about as successful as exploding Pintos, it needs more than ever for the CFPB to look credible.

This is where the second failing of the Obama brand comes in: its tactical ineptness. Let me stress that: the Warren mess reveals that the Administration is tactically incompetent. People who’ve attributed “11th dimensional chess” type skills to the Obama camp are smoking its brand fumes. We are now seeing that once the Obama Administration has to go outside its comfort zone of PR (which includes its thuggish methods for maintaining message discipline among its putative allies), it is at a loss as to what to do.

And a President who is recognized as poor at running his own plays is a de facto lame duck.

How did the Administration screw up so badly with Warren? The idea appeared to be (correctly, given the Obama propaganda objectives) to take advantage of the Warren name while neutralizing her. I thought bringing her in as an “advisor” meant she’d be busied with needlepoint like writing policy papers, sitting in on meetings, being humored, and getting occasional face time with the President to make her feel slightly less irrelevant. Oh, and kept out of the media save safe outings on venues like Jon Stewart.

So whoever allowed her to start building the agency made a colossal mistake. Whether this was the Administration’s offer or her counteroffer is moot. Perhaps they underestimated her, but that reflects a failure to pay attention. She did more to make the banks miserable from her post at Congressional Oversight Panel than the prosecutor, SIGTARP’s Neil Barofsky, who seemed notably uninquisitive save for controversies that landed in his lap, like Fed’s 100% payout on AIG’s credit default swaps. Indeed, at the nascent CFPB, she has managed to take a tremendous amount of ground, as the New York Times’ Joe Nocera noted:

When she was first appointed to set up the agency, I heard rumbling that she had no management chops and would make a hash of things. This prediction has turned out to be spectacularly wrong. She has attracted first-rate talent for virtually all the top jobs. The new bureau’s first move was to persuade two government agencies to combine mortgage forms into one easy-to-read document — no easy task given how government works. She has consistently talked about making bank disclosures easier for consumers to understand.

Now that she has taken her seat, she is refusing to get up despite lots of pained hints. And the Administration looked even more foolish as candidates refused to show interest in the post, with several pointed saying Warren should get the nod. This is where the Republican scorched-earth campaign is not serving them well. Who’d be nuts enough to want a job where you’d regularly be raked over the coals by rabid Congresscriters?

And that’s why the Date move on a superficial level looks clever. Here is one person who cannot turn down the offer! And since Warren hired him to be her number two, he has to be pretty good, right?

So the Date trial balloon is meant to paint a PR happy face over what is turning out to be an embarrassing episode for the Administration.

For the banks, the noising up of Date is meant to reassure them that the Administration is not going to install that inconvenient woman, and will find some sort of industry-conditioned member of the elites to take the post.

For the yet-again-about-to-be-sold-down-the-river traditional Democratic base of ordinary citizens, the orthodox Democratic messagers are trying to paint Date as just as good as Warren and keep the drumbeat up that she really should just get out of everyone’s way and take up knitting in the Scott Brown senate seat. Knitting is pretty much all she’d get to do, given the combination of the Democratic pay to play system and the certainty that she’d not be able to raise money from major corporate donors. Per Bob Kuttner at the American Prospect:

It’s hard to imagine Date letting his name go forward without Warren’s consent.

I took issue with this via e-mail with Kuttner; the idea that the Administration was looking at people in the CFPB proper is weeks old. I have it via two separate channels that Warren was shocked, which is at odds with the idea that she blessed this move. In addition, she has maintained a studious silence on this topic, which is even more revealing than a tepid or formulaic endorsement. When pressed, her office issues tortured formulations along the lines of “whatever is best for the CFPB is fine with her.”

The implications are obvious. No matter how strong Date’s other qualities are (he looks to be very competent technically and appears to have undergone a real change of heart after his levering-up-consumers days at Capital One), it has become clear that whoever gets the job will have to fight a persistent and shrewd battle to keep the agency from being reduced to a mere fig leaf. That is what pretty much everyone but Warren, her beleaguered troops, and the public at large wants.

Remember, the Democratic party has not been on the side of the consumer since at least the Clinton Administration. The clearest evidence comes via Arthur Levitt, the head of the SEC under Clinton, in his memoir Take on the Street. The destruction of the SEC as an effective regulator took place under Levitt despite his efforts to stem the tide. The very choice of Levitt, a former Wall Street executive, when the previous SEC chiefs had been attorneys with real regulatory experience, was no doubt intended to put an industry sympathizer in place. Indeed, Levitt was pro deregulation as far as professional investors were concerned. He was on the wrong side of history in his lack of interest in ferreting out derivatives abuses in the wake of a 1994 meltdown and in standing against Brooksley Born’s efforts to regulate credit default swaps.

But Levitt was a strong proponent of consumer protection and education. And in this modest stance, he ran into full bore opposition from Congressional Democrats, led by the Senator from Hedgistan, Joe Lieberman. They regularly threatened to cut the SEC’s appropriations and punished Levitt for his intransigence by making sure the agency’s budget increases were meager at best (this when growth of financial activity, the proliferation of new instruments, and swelling tax receipts would have argued for bigger increases).

So anyone daring to stand up for consumers has long been subject to concerted Congressional opposition. This means Warren possesses at least one, and probably two critical assets that Date lacks: a great rapport with the media and the public, which her opponents have been unable to undermine, and a remarkably willingness to take pain to advance her cause.

This struggle reminds me more and more of the famous heavyweight championship fight between George Foreman and Muhammad Ali (if you have managed never to hear of it, you must watch the documentary When We Were Kings). At 32, Ali was virtually ancient, while Foreman wasn’t simply the reigning world champion. but also a fearsome physical specimen, both extremely powerful and fast on his feet. Ali looked to be so badly overmatched that some members of his team expected him to be killed in the fight.

Unlike Ali, I don’t think Warren has chosen to use a rope-a-dope strategy, but that’s what it looks like from the peanut gallery, and it looks to be just as effective for her as it was for Ali. Her opponents, like sour faced aspiring prosecutors on the House Oversight subcommittee that grilled Warren last month, got angrier and angrier and threw wilder and wilder punches as their blows failed to land. Similarly, the Obama device of putting Date forward is a jab that looks unlikely to connect with its target. The AFL-CIO and the Campaign for America’s Future rejected the idea and urged Obama to make Warren a recess appointment. Other consumer groups are reported to be up in arms.

We’ve said that even if Warren loses, she will have won by enhancing her stature and keeping the media spotlight on the officialdom’s efforts to neuter the CFPB and more broadly, to cast a blind eye to banks’ continued predation. But she’s managed, despite all odds, to fight her opponents to a draw. If she is still in contention and comes through the ordeal planned for her on July 14 (a full day House Oversight Committee Republicans intent on burning her at the stake) with her attackers again looking like ineffective bullies, what once seemed like a quixotic struggle will start to exact a real toll on her foes, who will be revealed to be implacable enemies of the common good.

Print Friendly
Twitter65DiggReddit1StumbleUpon0Facebook194LinkedIn7Google+0bufferEmail

106 comments

  1. Foppe

    Great post. :)

    Though I am curious how people would have responded had you written “working class” in stead of “middle class”. Would that be enough to be branded “unSerious”, as Greenwald likes to call it?

    1. Yves Smith Post author

      Thanks for the kind words.

      I decided to give Warren a nod by using her rhetoric and “middle class” was shorter than the other formulations I might have used (I was not thinkin’ “working class” to be honest, but with growing income disparity, the “middle class” might be kidding itself as to how “middle” it really is these days).

          1. Paul Tioxon

            There is no middle. The liquidation is so complete, that like being able bodied, it is only a temporary condition, preceding age and accidental misfortune. If you do not have regular and dependable access to a source of a living wage with its main benefits of health care and a pension, you are permanently relegated to poverty. There is simply no place in America for anyone outside of the top 20% of the population with credentials from top universities. There is no place for you if you are not in one of the noble professions of medicine or law. There is no place with out a graduate professional degree in a necessary component of management. A technical engineer, a medical technician, a media operative or a computer science engineer of some skill level for e commerce, high frequency trading or telecom networking other than that, and you are relegated to menial servitude on an intermittent basis when you can get a hold of a temporary position. Of course, The Yuppie Nation, at 20%, is still some 60 million strong, so there are a lot of them. And it is exceedingly difficult to argue against your own meal ticket, considering the alternatives. There is a splitting of the camp along repressive police state tactics to deal with growing political fallout and the classical liberal solution, which is to co-opt, cool out and buy out mass violent disruptions, which will be the ruination of us all. The republican end game is finally explicit and widely, proudly displayed in public. The alternative, with the Democratic response characterized by health care reform, is the move to quell open, disruptive and violent dissent. It will be a cumulative, incremental battle, due to the historic structure of American Civilization. But it will go one way or the other, and as the crisis deepens and can not be smoothed over, desperate measures will come to the foreground, such as actually allowing Liz Smith a small measure of power.

            The reason why Liz is so resisted is more complicated than just siding with the banksters. Every agency, every bureau with the federal government has the capacity for organizing people for using power to control their lives, to whatever small or large degree possible. By merely admitting that it is possible, that it is operational and changes the way banks do business, in matters as small as stopping over limit fees on debit cards, shows that power can be acquired, can be directed against the banks and can change the banks behavior in the favor of the people, EVEN IN THE FACE OF ORGANIZED OPPOSITION. Especially in crisis, when Obama is facing a real possibility of a real, competent opponent in Mitt Romney, and failing economy to bolster the claims that he is simply not up to the task of dragging America up out of this economic catastrophe. It is now, that more can be extracted from the Democrats as a whole and move them to decide to maintain the furious push to retain power that will be necessary in the 2012 election. They will then betray who they have to stay in power and only votes can keep them in. That is our leverage. Prosecution of BofA, slapping down the oil companies, whatever it takes to let populace know that if wealth can not be immediately shared, then pain will be. Throwing a few corporate sacrifices into the volcano of presidential politics will be a good sign that Democrats need votes of from people who will put them over the top, and we are no longer talking about soccer moms and moderate independents. People who look at the republicans as decoupled from reality in their attacks on abortion, gay marriage and complete shunning of taking on jobs, foreclosure forgiveness and other meaningful emergency acts during an economic crisis, have developed a completely new political calculus built around $4/gal gas, long term unemployment, forced early retirement, loss of lifetime savings and even homes. This is the calculus of survival for over half over half the country, many of whom just 7 years ago, were worried about a third garage for storage of all of the stuff that spilled out of their 2750 sq ft homes. They don’t have that to worry about any more.

          2. Mary

            That gives me an idea, Paul. National Garage Sale Day (unofficial of course). Everyone sells their extraneous crap, no taxes for Mr. IRS and the some goodly portion can be collectively donated for sponsoring a real “peoples” potential candidate, such as Ms. Warren. It could raise quite a bit of money.

      1. sgt_doom

        While I appreciate the post, one would have to exclaim,

        “Oh, puuuhhlease”

        As Obama hasn’t been inept, but following a decided script, appointing the most stridently anti-worker types possible: Diane Farrell (McKinsey Global Institute — her sole career has been as jobs-offshoring specialist), Larry Summers (that is, Larry “climate change is a hoax” Summers, as in Larry “women can’t do science” Summers, as in Larry “workers don’t deserve unemployment, makes them even lazier” Summers), Larry Fuhrman, Timothy Geithner, Eric “Chiquita” Holder, Peter Orszag, etc., etc., etc.

      2. wes

        yves, i just read a most troubling interview with mr barofsky at counterpunch. please read it & i hope it deserves a mention. funny i used to respect mr barofsky, he seems to be full of excuses & seems to be saying “its the best we could do.” thank you

  2. Max424

    YS: “…that inconvenient woman…”

    Was that the title of a Wilde comedy? Note to self: check Oscar’s canon.

    Good boxing analogy (Yves does sports!) Poor Liz, though; I think she’s in the ring with more than just Foreman. She’s a rope-a-dopin’ most of the ghosts of heavyweights past; including Smokin’ Joe and Gentleman Jim and Rocco Francis Marchegiano.

    Great post.

    1. yetimechanic

      hmmmm, extreme liberal’s comment – to which I was replying – is no longer visible to me…

      1. Yves Smith Post author

        I almost never get rid of people that quickly, but when someone is a first time commentor, shows up with a barmy/nasty comment offering no support for his attack, and also link whores to his own site which is borderline nuts, I’m not about to keep him around. Looked like the type who would be persistently argumentative with no redeeming features.

        I like dissent, but I’m pretty insistent that the tone stay civil, otherwise comments will devolve into a food fight.

        Put it another way: I’ve learned to recognize the abusive energy sucks at 50 paces.

  3. Eric

    This is one of the most puzzling developments from this Administration. The President seems to have two constituencies that he would like to please: one that wants her nominated and another that doesn’t want her to get the job. The Senate has a minority that is extremely effective in frustrating the majority party, plus there are almost certainly a fair number of Democrats that don’t want her in the job either. Nominate her and there is a 98% she never gets the job. A Senate minority that won’t let Peter Diamond through can be relied on to block Warren. Sometimes I think that McConnell would be even more effective if he occasionally threatened not to obstruct the Administration….that would be the real dilemma for the President that nominating her would give her the job!

    1. Antipodeus

      Nothing puzzling about it, Eric, I don’t believe. The people who want her appointed are, by and large, most of ‘the People’ who actually voted for him. The people who don’t want her to get the job are, of course, the ‘people’ whose interests her appointment would threaten and, I now believe, who ‘support’ the President (who is thus obligated to them) but NEVER voted for him. I think you can probably guess who I believe them to be? ‘President Potemkin’, indeed — SO disappointing.

    2. ajax

      [intended as a reply to Yves Smith's main post, sorry.]

      Very convincing expose revealing of the FIRE-industry
      friendliness of some influential Democrats in the Congress.

      I always thought that a candidate for Head of the CFPB
      with a J.D. (a degree in law) would be a plus. This
      is because people who complete law school will have
      learnt about the adversarial nature of criminal and
      civil court proceedings, perhaps even extending to practical
      experience in “mock court” exercises.

      Almost surely, Elizabeth Warren has a J.D. and in any
      case: her regular job was/is Law Professor.

      I don’t mean to berate Raj Date. However, I’d be curious
      to know what his(?) professional background is.
      Has he gone to law school or alternatively has he
      worked closely with jurists, or been an expert witness
      in court proceedings ?

      1. Yves Smith Post author

        He has a law degree from Harvard but worked only briefly as an attorney. I’ve heard DC types express reservations about his regulatory expertise.

        1. ambrit

          Most Estimable Hostess;
          Wasn’t another presently influential politico (I use it in the Latino Perjorative tense,) a Harvard lawyer too? Look where THAT has led us.

  4. Schofield

    I suppose if Obama was raised by a banker ( his grand-mother ) and is now clearly in bed with the the banksters he really ought to be called Bankster Obama and not Barack Obama.

  5. F. Beard

    Inept Obama “Anybody but Warren” Stance Reveals Fundamental Bank v. Middle Class Fault Line Yves Smith

    Since 97% of the money supply is so-called “credit” which is debt to the bankers then all non-bankers work for the banks 97% of the time. We are thus 3% free in this so-called “land of the free”.

    The Bible declares:

    The rich rules over the poor, and the borrower becomes the lender’s slave. Proverbs 22:7

    Then why do we have a debt-based money supply? And it is not even legitimate debt as it is conjured from nothing.

    1. Foppe

      The Bible declares:
      The rich rules over the poor, and the borrower becomes the lender’s slave. Proverbs 22:7
      Then why do we have a debt-based money supply? And it is not even legitimate debt as it is conjured from nothing.

      I’m sorry, but why are you asking such obvious questions? 1. The bible is an authority like any other.
      2. The people who rule believe in another rule set, more along the lines of “might makes right.”
      3. To quote from my own bible (and this claim is merely to be understood as a descriptive, political truth): “between equal rights, force decides”.
      4. Force has decided, it is now up to you (or us) to come up with a counterattack.

      As for your suggestion that debt-based money is “illegitimate”: so long as it works, it, for all intents and purposes, isn’t. Subversion is a start, though I don’t really understand why you are hoping to convert NC readers first.

      1. F. Beard

        I’m sorry, but why are you asking such obvious questions? Foppe

        If only they were!

        1. The bible is an authority like any other. Foppe

        Not so. We live in a Judeo-Christian culture even if it is past its prime. The Right claims to believe in the Bible so why not use it against them?

        2. The people who rule believe in another rule set, more along the lines of “might makes right.” Foppe

        Not really. They justify their actions as “economic necessity”. And who can refute them? The alternatives their opponents present are usually painful ones.

        3. To quote from my own bible (and this claim is merely to be understood as a descriptive, political truth): “between equal rights, force decides”. Foppe

        Unfortunately many are so blind they cannot distinguish what is right so their force is likely to be misdirected.

        4. Force has decided, it is now up to you (or us) to come up with a counterattack. Foppe

        Yes, but we should have basic agreement on goals.

        As for your suggestion that debt-based money is “illegitimate”: so long as it works, it, for all intents and purposes, isn’t. Foppe

        But it isn’t working and for very sound moral reasons.

        Subversion is a start, Foppe

        Understanding is also needed.

        though I don’t really understand why you are hoping to convert NC readers first. Foppe

        Not first. I started with libertarians but it is important to hear all sides to get the full picture.

    2. Patricia

      I don’t understand why we allow all these conservative “Christian” citizens spew their “God is on our side and ‘free-market’ economics” meme when their religion so clearly is about caring for the poor, taking care of the land, and giving a livable wage for a day’s work.

      Where are the Christians who know better? Why aren’t they condemning outright heresy? Why aren’t the rest of us loudly pointing out their frickin’ lack of belief in their own tenets?

      I dream of a rotating series of prime-time tv ads pointing out their BS.

      1. F. Beard

        I dream of a rotating series of prime-time tv ads pointing out their BS. Patricia

        Excellent strategy!

  6. brian

    i look at lebron and i see obama
    and vice versa
    when it comes to push or fourth quarter
    choke

  7. DP

    I read yesterday that Obama intends to raise $1 billion for his reelection campaign. A lot of it will have to come from the banksters and hedge fund community. They may forgive some phony tough talk that they know is only intended to pacify the little people, but appointing Elizabeth Warren to head the CFPB would be construed as an act of war by the banksters.

    1. Uncle Tom

      Ding ding ding…we have a winner. When one reduces politics down to purely money flows, *everything* makes sense. 90% efficient predictability.

  8. Francois T

    Sent to the WH:

    If you want me to fight for you.
    You got to fight for me too.
    Appoint Liz Warren
    And I’ll be your man.
    Refuse to do so
    I shall be a foe
    Come November 2012
    We’ll give ya time aplenty to dwell.

  9. Tom

    Warren is undoubtedly the best choice. But if an alternative is required, Date seems exactly the wrong type for the top job.

    He appears to be, as you note, a bright technocrat, who has spent his life sucking up to the right people at the right time without demonstrating any particular character or moral independence. He appears to be pretty much the average Harvard widget who feeds on recognition – whether it’s inside a bank or a government regulator.

    The agency needs a leader to survive and have a chance to thrive. This means someone with both political acumen (experience) and an overriding dedication to a just cause – in this case consumer financial protection. There are (a few) folks out there who fit the bill. There are multitudes of Date-like indiscriminately ambitious Mckinsey/HBS (or comparable) meritocrats who can make the trains run on time at the CFPB.

    Unfortunately, the Obama administration is filled with the latter and they can’t stop gazing at their reflection in the pond long enough to give a shit one way or the other.

  10. Tom g

    Ron Paul/Elizabeth Warren 2012

    Ultimate outsider mind fuck ticket, he takes care of foreign policy and she cracks down on the financial malfeasance.

    The neocons(libs) won’t know whether to shit or wind their watch.

  11. drb48

    “You can’t negotiate with someone who won’t negotiate. Your options are to defy them or capitulate.”

    Team Obama has repeatedly gone with the 2nd option since taken office. No reason to believe the outcome will be any different here. That’s assuming we believe that said “capitulation” isn’t really just the Obama team doing what they really wanted to do in the first place and using “the Republians made do it” as a cop out.

    1. readerOfTeaLeaves

      Agree.
      And they’re up against Richard Shelby and Lieberman, which is a whole badge of courage on its own at this historical moment.

      Add it the College Republican background of McHenry, which means that he went through the same training ground as Jack Abramoff, Karl Rove, etc, and you need to recognize that the expression ‘common good’ is an inoperative, non-existent mental construct for any of these political gluttons.

      They’re good at tactics.
      They’re terrible at strategy because, over the long term, they literally don’t understand what the fight is actually about.

      These are not people who exhibit any real grasp of ‘the common good’, nor do they operate like reasonable people.
      Fundamentally, they’re tyrants: it is either their way, or the highway.
      Which means you need different strategies to contend with them.
      They love to suck up energy and time.

  12. Norman

    The most powerful office in the known World today, yet is occupied by an outwardly inept individual who is best at flip-flopping, or should that be 3 card Monte? I think Kieth Richards should loan “O” his pair of brass balls, perhaps then the country might see someone who really cares, not just a pretender to the thrown.

    Great post today Yves Smith.

  13. Dave of Maryland

    I made myself read the post all the way to the end, even though I had a feeling I’d read it all before someplace.

    Obama’s a guy who kisses ass upstairs, kicks ass downstairs. Until he became Prez there were always a lot more deserving asses upstairs (in sheer numbers) than there were downstairs. Jeremiah Wright was once just an outlier. Now he’s not.

    Unlike college educated idiots who will believe in 13th dimensional chess, the unwashed masses of the public cannot be fooled. I have great respect for them. “Education” has not blunted their sense of smell. Which is raw.

    So I tell you this:

    When the public says Darwin stinks.

    When the public says Global Warming is balmy.

    When the public says Obama wasn’t born in Hawaii,

    BELIEVE THEM.

    However, merely being able to smell does not mean there are any brains or minds behind it. The unwashed masses may have the best noses in town, but they are also the most easily misled. (Tea Party, anyone?) You might think of the public as bloodhounds. They will find the man, but have no idea why he is wanted. They would just as soon lick him to death.

    Obama is an unqualified hack. And has been, for a very long time. This was clear back in 2007.

    Despite the fact that he had no prior experience, could Obama have learned while on the job, a la Kennedy?

    No, because as it turns out, Obama, unlike Kennedy, has never shown an ability to learn. Obama is like 3-card monte. If Obama had talent, he would have progressed to Bernie Madoff. Instead he’s stuck peddling the same three cards. Elizabeth Warren has now put him to shame. Given enough time, somebody was going to do it. She reminds me of Edward R. Murrow before Congress long ago.

    (I had another paragraph here, but you would not have read it. No, Obama wasn’t born in Kenya, but most likely in Chicago. The fruit does not fall far from the tree. Obama has a manufactured ID. Call up anyone you know in the fake ID biz – an FBI contact will do nicely – & have them explain the importance of the “mother’s brother” or “mother’s mother” as a backstop to you.)

    Meanwhile, what were you expecting? Kenya, Hawaii, in the end our noses made no difference. The only prayer we had with Obama as our President was in his choice of advisers. Which means the game was lost before the administration took office. I fear before a single vote was cast.

    1. Mark P.

      @ Dave -

      “as it turns out, Obama … has never shown an ability to learn.”

      Yes.

      Setting aside your homage to “the Public,” which is no such monolithic entity as you suggest, that’s the most interesting thing. I would swear that Obama knows as little about economics as he did when he was elected — and appears to have no interest in learning.

      That Olympian disinterest in economics takes Obama some ways beyond merely being an empty shirt, given the particular straits the country now finds itself in.

  14. steelhead23

    OK, I’ll say it again – Director of CFPB is simply too low a goal for Ms Warren. The intensity of her desire to “serve the American People”, her willingness to lead through the enforcement of black-letter law, her savvy and her remarkable intelligence make her the perfect candidate for POTUS. Screw working for team Obama, dethrone it!

    1. Tom g

      See my above comment

      This would be a nearly invincible combination of a statesman (paul) and a legal and regulatory technician (warren). Huge amounts of wanderlust “republicans” and “democrats” would find a home with this pairing.

      1. Chester Genghis

        Statesman? Ron Paul?? Are you being ironic? If he had his way, would the State Dept. even exist?

        (An extreme isolationist like Paul doesn’t exactly square with my definition of ‘statesman’.)

        1. Tom g

          Oops, someone forgot to throw out their McCain debate playbook in 2007.

          Tell me what the state department does now that squares with the actual definition of a what a statesman is (building embassies around the world to augment political clout doesn’t count).

          The problem with kucinich is that he does not respect the raw force that a free market has. It is absolutely unmatched in history.

          Only problem with Paul is he doesn’t understand that we will never have a free market with the global forces at work currently (labor/environmental arbitrage). He needs Warren to help him on the regulatory side, hence my suggestion.

          Don’t worry I disagree with Paul on a lot of things (gold standard etc..) but he is the only respectable one that has been on TV and even in the running (as far off as he may be).

      2. steelhead23

        Well, if I were to suggest a downticket running mate for Ms Warren I would suggest someone with legislative moxie from the left of the Democratic Party – Kerry, Kucinich, Feingold, or the like – but this is way premature. Perhaps we should talk Yves into starting a Run Liz, Run campaign, complete with T-shirts and coffee mugs. How bout it Yves?

        1. Peter T

          I would go for experience in a VP, and that could be Hillary. If Warren can with Clinton and survives the first presidential primaries with many votes, she should give Clinton a call and offer her a copresidency: Warren for economy, courts, people, Clinton for security, foreign policy. One African-American on a ticket would be trumped by two competent women on the other.

        2. Peter T

          More important than the running mate would be congress. If Warren wins the primaries, could she push for something similar but opposite to the “Contract for America” that democratic candidates could either sign or not? The document would have to be simple, but powerful, to give the legislative agenda momentum from the start, to reduce corporate power in politics. I’m thinking of complete transparency of political contribution, a public option, restoration of Bill Clinton’s tax rates, modifying the filibuster from a blocking to a merely delaying action, packing corporate boards with 33% labor elected members, and the like.

          1. Glenn Condell

            If such a program was her campaign platform, there is no way establishment creatures like Kerry or Clinton would have a bar of her.

            Likewise you would hope that she wouldn’t stoop so low as to ask them. If she did, well it would be deja-vu all over again for those naive enough to believe in promises of change.

  15. ep3

    awesome post Yves. I love it when you call out the Obama administration for exactly what it is.
    Re: the democrat party. Your right too. It was obvious over a year before the election,2008, that it didn’t matter who the candidate for the party was (tho hillary was preferred amongst the party elite), all that was being elected was the “democratic party”. So it could have been anyone of the clowns that would appear for the debates, they all represented the democrat money. I remember once it was down to 3 candidates, how hillary and obama sounded very much alike (him saying even less than her) and Edwards being the “jerry brown” outcast who had the people’s support but not the bankers/elitist.

  16. ep3

    Yves, I wanted to comment about your article from last year “empire strikes back…obama”.
    First, in regards to why obama sided with the banks i think has two more possibilities. One I think the fact that the banks were/are such large campaign cash contributors. So a deal was made “we will save u and not prosecute in exchange for large donations in 2012″. Second, I think it also has to do with the wealthy elite conspiracy theory. The banks represent metaphorically the wealthy elite of the country/world and to let them fail would be disaster.
    I also one time, in 2004ish heard a report that 60% of Bank of America stock is owned by the Arab soveirgn wealth funds. Basically, stock was traded for cheap oil. So imagine us suddenly saying to the Arab world, “guess what, your investment is worth absolutely nothing, the bank is blowed up, you just lost $1 trillion because of our gov’t stupidity, btw, can you send us another billion barrels of oil please?” If Al queda is mad now, imagine the chaos such a situation would cause.
    Second, regarding Obama (and bernanke) being “scholars of the great depression”, I think what they learned about the depression is how to rescue the bankers and wealthy elite, instead of allowing the middle class to be born again and grow.

  17. Phichibe

    Yves,

    For once I wonder if you’re being naive. (To paraphrase Paul Krugman to his critics after winning the Nobel Prize, “The evidence suggests I’m not stupid. I think what you mean to say is that I’m evil.” I know you’re not dumb so that leaves naive.)

    In truth, I don’t think you’re either naive or dumb but I do think you’re missing something about the administration that explains all their appointments and actions (or inactions) since November 3, 2008. DP above touched on it, and the NY Times had an article on it yesterday. It’s the money raising for 2012.

    I’ve never been in politics but I’m a political junkie and read obsessively, and I know that to the professionals the day after the election is when they start strategizing for the next one. Recall Obama eschewed campaign financing in 2008, so confident was he in his formidable campaign finance machine raising more than the Repugs could raise – and he was right, he raised $800 million. I will guarantee you that his money team the day after the election knew that for 2012 they were on the hook for that plus 20% or so – call it an even billion.

    To use an old expression, the penny dropped for me on this when Mark Shields on the PBS Newshour first mentioned this number a few months back. Obama’s actions in 2008 essentially gutted public financing for presidential elections, and threw down the gantlet to the Repugs: I dare you to outraise me.

    And Obama did this knowing two facts in this country:

    1) the Repugs have a significantly better fundraising apparatus than the Dems.

    2) real money – not the dribbles that come in from the Internet – can be found in only a few pockets: Wall Street and mineral extraction, specifically. The latter won’t give money to any party that embraces the Sierra Club so that leaves Wall Street.

    The truth is that Obama doomed true Wall Street reform that day in July 2008 when his campaign team decided to abandon public funds for the fall campaign. Like the first act of “Oedipus Rex”, when Oedipus’s hubris sets in motion all that will unfold, Obama’s fatal flaw came early and its true import wasn’t obvious at the time. Team Obama knew that they could not govern as a Roosevelt (either of them, Teddy or Franklin, take your pick – and especially not as an Eleanor) and have any hope of raising $1,000,000,000 from wealthy donors in 2011-2012.

    And Obama hasn’t even tried to push a progressive agenda – reining in the shadow bank system, breaking up mega banks, restoring Glass-Steagal, raising capital limits to adequate leves – none of these have been pushed. In fact, Obama’s actions look nothing so much as like those Herbert Hoover tried from 1929 to 1933.

    (Ironically, the much maligned Hoover was not a laissez-faire true believer like Andrew Mellon, he actually was a well-intentioned technocrat who simply couldn’t get his mind around the scope of the problem that the Repugs had allowed to develop in the 1920s; in truth, he’d be read out of today’s Republican party by the likes of Grover Norquist).

    So here we are. The Democrats nominated a pig-in-poke in 2008, a man we thought was one thing but turned out to be a closet Republican, a man whose earliest Wall Street backer/adviser was none other than Robert Rubin, who joined Team Obama back in 2006 (much to the Clintons’ collective ire). Even if Obama’s instincts were progressive (and I doubt that) he couldn’t move a progressive economic agenda because he couldn’t bite the hands that he was going to need to feed him for 2012.

    As with any well-crafted tragedy, the ironies are replete. Obama bent over backwards to be nice to Wall Street (and Greenwich) only to see his actions likened by hedge fund billionaires to the rape and pillage that Wehrmacht unleashed on Poland in September 1939. Irony piled on irony: there are millions of people who are suffering because of Obama’s actions, but they’re the unemployed who are losing their houses, pulling their kids out of college, selling their cars, moving in with their families. All because Obama lacked sufficient courage to seize the moment in the first three months of his time in office to galvanize the country the way FDR did in 1933.

    No wonder we got no Pocoro hearings, no prosecutions of the banksters. Instead, we get Alan Greenspan, after a brief mea culpa, turning around and resuming his evil peddling of Ayn Rand-inspired laissez-faire triumphalism.

    And as an insult to these injuries, we get the sad spectacle of Paul Volcker, like the last noble Roman, agreeing to come out of retirement, despite his major misgivings about Obama or at least the people Obama was surrounding himself with, only to have his worst fears confirmed, that he was to be used as a Potemkin wise man, trotted out to press events but totally ignored otherwise.

    The horror of the present situation is almost too much to bear. Obama made his Faustian bargain with Big Money back in 2008, he equivocated and applied half-measures that have failed to turn around the economy and yet the little he has done has alienated Wall Street and its checkbooks, unemployment is at Depression levels in the critical industrial states any Democrat must carry to win the White House, and the Repugnant Party is in the hands of Jacobins who are so intent on the purity of their laissez faire terror that they will allow their revolution to carry the United States over the brink rather than accommodate themselves to the realities of governance, starting with paying for those government services the people refuse to live without.

    And I haven’t even mentioned the coming world of campaign financing post-”Citizens United”, which will only accentuate the role of money and further empower those who have it.

    Elizabeth Warren? Sadly, her noble (and lost) cause is likely to be the least of our worries. I recall the day in mid November 2008 when President-elect Obama had a press conference to introduce his financial team. The moment I caught sight of Larry Summers standing in the back row I knew we were f&*ked: “meet the new boss, same as the old boss” (from the Who’s “The Punk Meets the Godfather”, in case you’re not up on mid 60s rock n roll ;-). But even my forebodings have been shown by events to have been too timid.

    All that said, I still come here daily for some glimmer of sanity, and remain one of your biggest admirers.

    Best,

    Phichibe

    1. chris

      Great analysis.

      I became disenchanted the moment the Teleprompter appointed Summers, Geithner, and the rest of the Wall Street swine.

      At least those of us not in charge get to watch the end of this foolish empire.

    2. Old Steve (formerly Steve)

      Great post. Follow the money. Three quibbles:

      1) “Meet the new boss…” – The Who was from “We Won’t Get Fooled Again”

      2) Bankers were way more responsible for this crisis than were hedge-fund managers; it’s not even close.

      3) Republicans are not the party of “laissez-faire” economics. They are the party of the Military/Industrial complex. The Democrats are the party of the Permanent, All-Encompassing Welfare State. Both parties are the party of Wall Street. Economic libertarians would have never allowed a banking cartel backed by Government deposit insurance to dominate the economy.

      1. Phichibe

        Yves,

        I hope I didn’t step on your toes. It wasn’t my intent. As a matter of fact, some of what I’ve learned about the way other countries run elections (notably Australia) I’ve learned right here from your posts.

        I just wanted to stress in my comment that the root of the problem is the horrific campaign finance system in this country. I’ve cited Buckley v. Vallejo as one of the worst Supreme Court decisions for years, only to see the current court make it immeasurably worse with Citizens United. Only the most benighted can confuse money with speech, and now we’re going to need a constitutional amendment to fix it. I frankly don’t see how that can happen short of another depression, given that it would need 38 states to ratify, and the Repugs have a lock on the south and the mountain west.

        And Obama threw the only system of public finance overboard when he thought it was to his advantage. Given the economy of late 2008, I think there was no way he could have lost, whether he limited himself to the public matching funds or not. It was pure opportunism and we’ll pay for it down the road, perhaps as soon as 2012. The prospects of Republican control of both ends of Pennsylvania Avenue are just frightening.

        Anyway, I remain a devoted reader. You’re the best…

        Phichibe

        1. Glenn Condell

          ‘I just wanted to stress in my comment that the root of the problem is the horrific campaign finance system in this country.’

          Yes, but I would add that until the US abandons electronic voting and returns to a checkable paper trail election process reforms in campaign finance won’t be enough. Otherwise you could clean up the Augean stables, but have the people’s will denied with a ‘stolen’ result.

          In Australia we have paper elections with ballots stored for any challenge, which almost never happens. Elections are generally contests between careerist time-servers like everywhere else, but they are clean.

          To me the real difference between the US and Oz in this regard is that here we have and pretty much always have had a strong public broadcaster, beaming out across the nation on radio and TV and now internet. This is regarded by virtually everyone as a central civic institution and woe betide any pollie who tries to gut it. Rightwing govts have tried to stack the board and have appointed wingnut lieutenants as CEOs, but Aunty sails on powered by the trust of Australians from all walks of life, with a reputation for balance and therefore a political power of it’s own.

          The Murdoch vampire squid controls 70% plus of commercial media here and the other privates are similarly down-market, conservative entities not unlike their US counterparts, but the huge pole at the sensible middle that the ABC represents has a powerful pull that keeps the privates from descending into that cesspit where most of your MSM dwell.

          Simply, many of the outrages that have been and continue to be visited upon the benighted American population with nary a whimper from a compromised and co-opted corporate media could not have occurred here, and the history of ABC honesty and independence is key to that.

    3. Yves Smith Post author

      I referred repeatedly in other posts to the fact that the banks are the second biggest source of funding in DC. With the “in bed with the banksters” remark in the third para, I provided a link to an NYT story from yesterday which discusses how Obama is making nice to the banks as part of his fundraising strategy. I also mentioned in passing the fact that Warren would get to do precisely nothing useful if she were elected to the Senate because she has pissed off BigCorps and would be unable to raise enough money to get on any decent committees. The Dems have an explicit pay to play system where the amount you kick in to the DCCC determines what committees you get on and what slot you get too.

      The role of money is so obvious I didn’t deem it to be worth harping on. I can’t make every post comprehensive, otherwise this nearly 3000 word post would have been 6000 words.

      1. Peter T

        Yves, you seemed to argue more that Obama wanted to cuddle the bankers; Phichibe’s point seemed to be that he had to. The effect is the same, and to decide when Obama reached the point of no return is not that important. He has reached it and marched well beyond of it. Thank you both for your good analyses. (For me, the disappointment came when I heard that Geithner, the head of the New York Fed, was chosen as Treasury Secretary. Each time, I get another request to donate, I reply only “Fire Geithner”, knowing that it won’t happen.)

      2. Phichibe

        Yves,

        To state the obvious, my reply above was in response to your response to my reply above above but I clicked on the wrong reply link. (If you parse that sentence, it’s kind of like the movie ‘Inception’).

        Anyway, having read a few of your other replies in this thread I sense a certain asperity. Sigh. Take comfort in that your readers adore you, even if you don’t always adore us ;-)

        Phichibe

        PS: I realize that your original post was indeed copious at 3000 words. I’m grateful for everything you write here or elsewhere, and make a point of watching whenever you pop up on video.

        PPS: I cheerfully withdraw ‘naive’ from my original post(it was only offered rhetorically, in any case.) Of all the
        adjectives I would use to describe your worldview, it’s the last that would be le mot juste. Hardbitten, in a Lauren Bacall meets Betty Davis way, maybe, but never naive. Please don’t have my knees broken ;-)

        1. Phichibe

          Yves,

          I am second to none in my respect for your insights in these matters. Further citations of your earlier posts are absolutely welcome but can’t possibly raise my estimation of your perspicacity on these matters. I know you’ve been beating the tocsin for desperately needed reforms since I’ve been reading you (mid 2008) and you are a hero in my book. If there were an emoticon for raising the white flag, I’d insert it here.

          That said, while I absolutely agree that Obama *could* have (and, indeed, SHOULD have) brought fundamental reform to the whole financial infrastructure, I think the record shows that he lacked/lacks the true dimension of leadership: to risk his personal interest in favor of the commonweal. Washington had it. Lincoln had it. The Roosevelts had it. Harry Truman had it. Obama doesn’t.

          Obama must have known from the moment he declined federal matching funds, that he’d be dependent on Wall Street for his 2012 campaign funding to an extent that no president has been since the Watergate reforms. He thought he could have his cake and eat it too: pass a half-hearted stimulus, push for anodyne reforms that left the heart of the financial cancer untouched, and hope that the economy would recover enough by 2012 to be re-elected. Krugman warned him, Stiglitz warned him, and you warned him. His arrogance carried the day and we’ve all lost. (BTW, one of my all-time favorite anecdotes of leadership concerns Teddy Roosevelt: after the 1904 election, when TR revealed himself to be a trust-buster and foe of “malefactors of great wealth”, one of JP Morgan’s crony’s asked him what had gone wrong; Morgan replied “we bought the son of a bitch but he didn’t stay bought”. Obama stayed bought.)

          Obama is, in every fundamental respect (and I love your analysis of the healthcare bill, I completely agree that it was a sellout to big pharma and the insurance co’s – just look at what happened to their stock prices after the bill passed) a failure. I think the country is in greater peril than any time since before the Civil war (and as the child of a con law professor, I know what those words mean). As I said in an earlier response to an earlier response of yours (damn recursion, lucky I was trained in computer science) I think ‘Citizens United’ will go down as one of the worst Supreme Court decisions of all times, and here I’m thinking of ‘Dred Scott’, which paved the way to 1861.

          Even before this debacle of a decision, the plutocracy was ascendant and, as Tallyrand said of the Bourbons before they were carted away in the tumbrils, the uber-rich have forgotten nothing and they have learned nothing. They are going to push their luck, and keep tempting fate, until the whole system comes crashing down. The true tragedy is that, like floods and other natural disasters, the carnage will be felt least by those who live in the houses high on the hills. The poor will be devastated most. For those who want to know what I mean, I can recommend the book “Let us Now Praise Famous Men” by James Agee with photos by Walker Evans. From Wikipedia:

          “In the summer of 1936, during the Great Depression, Agee spent eight weeks on assignment for Fortune with photographer Walker Evans, living among sharecroppers in Alabama. While Fortune did not publish his article, Agee turned the material into a book entitled, Let Us Now Praise Famous Men (1941). It sold only 600 copies before being remaindered. Agee left Fortune in 1939.”

          To conclude: Yves, in the cacophony of the Internet, there are only a few blogs I place on a pedestal: yours, Paul Krugman’s, Brad Delong’s, and Baseline Scenario. With your credentials and contacts, I know you could make a very comfortable living in “private banking” and not spend the many hours every day that writing for/managing NK requires. I can only repeat my gratitude.

          I think I’ll leave it at that.

          Best wishes,

          Phichibe

          PS: I hope this reply went to the right reply – your reply to my reply to your reply to my reply. If not, I could not be more confused.

        2. Max424

          YS: “He had a window of opportunity at the beginning of his Administration to bring them to heel and he blew it.”

          Could not agree more.

          I repeatedly wrote in the Fall of ’08 that I thought the first three months of the Obama administration would prove to be the most important three months in our nation’s history.

          Too smart me: they were.

          Obama was gift wrapped his shot at greatness. He came into office with his “boot” firmly planted on the enemies throat. Not only did the enemy survive the “boot,” like giant mutant rabbits from hell, they thrive and breed and proliferate — and consume all.

          Only if the future is extremely charitable will Obama be remembered as either a hapless dud, or a worthless clown. If it is not charitable, his legacy will do down … more as it should.

      3. skippy

        @Phichibe,

        Obama had a wet dream on a platinum plate (mandate of the commons), yet he threw it away. FDR had to fight to get traction, let shit get worse before enough anger built.

        Yeah I know, pre-military+ complex thingy and no Smedley Darlington Butler around to hang over their heads, the world is tightly coupled now days…so no real sovereignty…cough one big STD clinic.

        Skippy…in my opinion the real difference is FDR was a made man, had the experience of a wealthy life from birth, need no mental blanket to assure him self, raised by wolves. Where Obama is rife with insecurity, still trying to play / be the part, like a waiter shining on the clientele, hoping to get noticed, invited to the after party, accepted by his betters as a potential acolyte.

        1. ambrit

          Skippy;
          Too right.
          Obama: “Absent father syndrome?”
          FDR: “Lo, there were giants about the earth in those days.”

    4. Doug Terpstra

      Money quote: “The horror of the present situation is almost too much to bear.”

      ” ” ” ” ” or, “this nightmare is NOT HAPPENING!”

  18. Slade Smith

    You say that “despite the Republican bluster about using a pro forma session to keep the Senate in business to block a recess appointment, the Democrats could break that maneuver if they wanted to.” Please explain how.

      1. Cugel

        Simple.

        The decision whether to adjourn is NOT subject to filibuster. So, 53 Democrats vote to adjourn end of story.

        They just can’t do it by voice vote or acclimation which is the normal procedure for pro-forma votes like the vote to adjourn.

        But, Senate Democrats don’t WANT to get Republicans “angry” with them (Republicans never worry about this of course). And Obama signals that he will never in hell appoint Warren via a recess appointment because that would “antagonize Congress” during the “delicate” budget negotiations. So, Democrats don’t want to bother with a fight.

        From their perspective — why bother since Obama’s not appointing her anyway?

        1. ajax

          Would you go as far as saying that Republicans in
          Congress would act the same way long term whether or
          not Obama nominated Elizabeth Warren to head the
          CFPB? (just curious …)

        2. Slade Smith

          at, apparently, is not the end of the story. The House can evidently nix a Senate adjournment, according to the constitution– “Neither House, during the Session of Congress, shall, without the Consent of the other, adjourn for more than three days.”

          And the President can adjourn Congress– “[The President] may, on extraordinary Occasions, convene both Houses, or either of them, and in Case of Disagreement between them, with Respect to the Time of Adjournment, he may adjourn them to such Time as he shall think proper…” I’m just not sure whether he can adjourn them for more than 3 days, whether he has to convene them in order to adjourn them, or what qualifies as an “extraordinary Occasion.”

          If it can be accomplished procedurally, “whoever allowed [Warren] to start building the agency” might make another “colossal mistake” and appoint Warren. (By the way, I like how Yves can’t bring herself to acknowledge that it is Obama that appointed her to build the agency– never mind that he signed the law that created the agency in the first place! I also like how Yves cannot logically explain certain facts that do not fit in with her view of the Obama Administration, so they become blunders. We are supposed to believe that the Administration meant to sell out to the banks, but they slipped on a banana peel and put Warren in a position of power).

          1. Yves Smith Post author

            Slade,

            With all due respect, can you not read the post?

            The CFPB was part of Dodd Frank, or did you miss that part? Dodd Frank was watered down reform presented as a real Dem accomplishment. Tell me why Obama would have ever vetoed that.

            The Obama position is to toady to the banks while trying at the same time to look like he has not sold out his base. A CFPB is perfect cover. Look at his health care “reform”. It actually ENRICHED Big Pharma and health care insurers when our biggest problem with health care in the US is runaway costs.

            I discussed the Obama calculus in earlier posts and alluded to it here. The intent was clearly to sideline her. She was kept very much under wraps for months. Having someone as mediagenic as her completely out of the limelight was consistent with the strategy to neutralize her. If Obama had really wanted her to run the agency, he would instead have put her on the road on a charm offensive to the banks, she would have been doing tons of meetings with bank execs, with heavy MSM coverage of that campaign. And she would have been on TV at any and every instance. Did any of that happen? No.

            Her biggest threat to the Administration is her access to media. Journalists adore her and she comes off extremely well. Having her in the Administration means they get to control her access to the media and her messaging. This was a big reason for getting her inside the tent.

            She and Geithner are ideologically 180 degrees apart. Geithner is widely acknowledged to be Obama’s most powerful team member. Warren would be the job only over Timmie’s dead body. I can’t fathom why they let her have a real job, but it was very clear there was never any intent to have her be the first director of the CFPB. The Administration’s conduct makes that blindingly obvious.

            And where did you get the idea that this was Obama’s idea that she be an advisor to the President as well as to Treasury? I’d bet this was Timmie’s idea or that she insisted that she have access to the Prez as part of the deal and they figured they’d call her an advisor to the President too to improve the optics to the public.

            He did the same thing to Petraeus, bringing him into the tent to neutralize him, and the media read it the same way. It’s called “keep your enemies close”. It is hardly an unprecedented move. It just happens not to be working out very well.

          2. Slade Smith

            With all due respect, can you not read the post?

            I do read your posts. Regularly. I think your blog is a terrific resource, in fact. But I simply do not buy a lot of your anti-administration theories.

            The CFPB was part of Dodd Frank, or did you miss that part? Dodd Frank was watered down reform presented as a real Dem accomplishment. Tell me why Obama would have ever vetoed that.

            It’s fair to point out the compromises and weaknesses in Dodd Frank, but if it was so watered down as to be entirely toothless in all respects, then the CFPB would be toothless as well. But it’s not toothless. There were compromises in the formulation of the CFPB, for sure– I recall how title insurance was exempted from the purview of the agency for just one small example. But the agency still has the potential to have effect. If this were not so, why would you even want Warren to head the CFPB in the first place? If the agency had no power, it would be a waste of her talents, would it not?

            The Obama position is to toady to the banks while trying at the same time to look like he has not sold out his base. A CFPB is perfect cover.

            If your theory were correct, then, logically, to continue the cover, Obama could have nominated Warren. He’d let her get voted down by the Senate, then, worst case scenario, appoint her during a recess (if possible) to the toothless, watered down CPFB and warehouse her there, “keeping an enemy close”, according to your theory.

            The fact is, we have not seen what the endgame looks like yet. The next move is likely known only to a select group of insiders. I can’t claim that I even know for sure what Warren herself wants. I think it is likely that she still wants the CPFB job but I do not know that for a fact.

            I discussed the Obama calculus in earlier posts and alluded to it here. The intent was clearly to sideline her. She was kept very much under wraps for months. Having someone as mediagenic as her completely out of the limelight was consistent with the strategy to neutralize her. If Obama had really wanted her to run the agency, he would instead have put her on the road on a charm offensive to the banks, she would have been doing tons of meetings with bank execs, with heavy MSM coverage of that campaign. And she would have been on TV at any and every instance. Did any of that happen? No.

            She has been on the road talking to bankers… that’s what she has been doing with much of her time for the past several months! It has been exactly the charm offensive you have asked for– and she’s actually won over a few bankers!

            It has not been an MSM friendly tour– it has been a getting down to business tour. Just because she’s not on TV every day does not mean that she is “under wraps.” And she has still managed to be on TV quite a bit anyway– she is far from forgotten.


            Her biggest threat to the Administration is her access to media. Journalists adore her and she comes off extremely well. Having her in the Administration means they get to control her access to the media and her messaging. This was a big reason for getting her inside the tent.

            So again, your reasoning argues for the administration to appoint her as head of the CPFB. Otherwise, she’s outside the tent. And they certainly would not want to piss her off right before she goes out of the tent, by going behind her back and appointing her first lieutenant.

            I suppose you could again argue that the conspiracy is not coherent because the Obama administration is so bumbling and stupid, but I’m not buying that.

            She and Geithner are ideologically 180 degrees apart. Geithner is widely acknowledged to be Obama’s most powerful team member. Warren would be the job only over Timmie’s dead body.

            The difference between Geithner and Warren are likely overblown. Warren’s role on the TARP oversight panel put them in adversarial roles, and obviously they differ philosophically on the bank bailouts, but I’ve watched the videos of her grilling Geithner at hearings and the exchanges were entirely respectful and on topic. A lot of folks want there to be a hateful relationship between the two but I doubt it is the case. Geithner has publicly been very complimentary of her work setting up the agency.

            I can’t fathom why they let her have a real job, but it was very clear there was never any intent to have her be the first director of the CFPB. The Administration’s conduct makes that blindingly obvious.

            I think they put her in that position because she’s great for that position! Presidents want to be successful above everything. Generally they appoint people who they believe can do a good job. Unfortunately, it’s almost gotten to the point where you’re considered a pollyanna if you don’t conjure up all kinds of cynical motives for every single move that a politician makes. They’re human beings, not monsters.

            And where did you get the idea that this was Obama’s idea that she be an advisor to the President as well as to Treasury? I’d bet this was Timmie’s idea or that she insisted that she have access to the Prez as part of the deal and they figured they’d call her an advisor to the President too to improve the optics to the public.

            I have no idea whose idea it was but at the end of the day her appointment was Obama’s call.

            It’s called “keep your enemies close”. It is hardly an unprecedented move. It just happens not to be working out very well.

            Or, maybe they never thought of her as an enemy. There’s a whole premise here that is built on scant to nonexistent evidence. Having heard Warren and Obama talk about each other in the past, it has sounded like pure mutual admiration. Now maybe that has changed, but I have not seen evidence of that change.

            You still did not answer the question as to why you are so confident that Obama could recess appoint Warren if he wanted to. I’m not confident that he could pull it off at all. There’s plenty of Dem senators that take checks from banks, and remember how public Dodd was about not using a recess appointment for the CPFB, just as an example about how inconvenient Dem Senators can be for a Dem president.

        3. Yves Smith Post author

          Slade,

          You are really acting as if you did not read the post.

          I said CLEARLY that there was never any intent of having Warren head the CFPB on behalf of the Administration. I have numerous well placed contacts, both close to Warren and close to very powerful people in the Dem party who confirm this. And as I have said separately, even without insider confirmation. all you have to do is look at her position v. Geithner’s. Geithner has long driven the train on bank policy; Obama defers to him on bank and even economic matters. Geithner is 100% opposed to the Warren posture on banks.

          I know a considerable amount about how this Administration works and it is far worse than you imagine. What I put out is actually pretty mild compared to what I could say.

          Why have Warren head it? It’s a bully pulpit. She has the ability to change the debate and perceptions around the role of banks. And the CFPB can do research. I don’t think much of its formal powers, but she can keep the banks in the media spotlight in a negative way for their misdeeds. That is not normally the source of power for an agency, but with her in that role, it could be very influential in shifting popular perceptions as to the role of banks.

          Obama would never have Warren subjected to a no vote and appoint her, that would set him up for being raked over the coals for defying Congress. Of all the ways to get someone in the job, that is from a public perceptions standpoint the absolute worst in terms of creating maximum controversy (the hearings alone would be a circus).

          The Republicans have handed him an opportunity. There stance is: We refuse to let the agency go forward under normal procedures unless we hobble it in a way no banking regulator is hobbled. Obama can say, ‘You have given me a no-win choice, to gut a part of the reform bill that was voted through by both parties last year and most voters want to see go forward, or make a recess appointment. You’ve forced me to make a recess appointment.”

          As for media, you really do not understand what a media campaign looks like. She has barely been on TV, given no exclusive interviews, no op eds. She got vastly more profile via her being beaten up before Congress than through her formal media ops. She’s only gone out to second tier venues and then very rarely.

          I don’t know how to persuade someone who refuses to read very obvious evidence. Everyone who knows DC can see what the game plan is. This is not how you treat someone you expect to be part of the team. She would have been announced as the person who was putting the agency together, not an ambiguous advisor. I have no idea how she was able to do it, but my contacts have confirmed my reading: the intent was that she’d be irrelevant. She was abused when she headed the COP, the assumption I am told by people with VERY high level contacts was that to the extent she did get any profile, she’d be ground down and retreat. They appear to have assumed she’d fold under the abuse, so she could be sidelined with the Administration having clean hands.

          1. Slade Smith

            You are really acting as if you did not read the post.

            I said CLEARLY that there was never any intent of having Warren head the CFPB on behalf of the Administration. I have numerous well placed contacts, both close to Warren and close to very powerful people in the Dem party who confirm this…

            You have to look at things from the perspective of a reader with a normal level of skepticism. I can’t evaluate your unnamed contacts, or what they have said. From my point of view, this is just anonymously sourced information. I might not be as impressed with their placement with respect to the important actors. I might believe that they could have personal axes to grind. I’m not privy to what they have told you and if I did I might interpret what they say differently than you have. That might be frustrating to you if you have a high level of faith in your sources, but there are several valid reasons for someone in my position to take anonymously sourced info with a grain of salt. So it’s not that I’m not reading that part of your post; I just can’t give much weight to it.

            And as I have said separately, even without insider confirmation. all you have to do is look at her position v. Geithner’s. Geithner has long driven the train on bank policy; Obama defers to him on bank and even economic matters. Geithner is 100% opposed to the Warren posture on banks.

            They have different positions and different and almost necessarily opposing roles, and it does seem likely that Obama has a lot of respect for Geithner’s opinions, but that does not on its face mean that Warren could not coexist with Geithner within the Administration– even if it is true that Geithner and Warren do not get along well. Hell, they are both in the tent now and both seem to be rising in stature.

            I know a considerable amount about how this Administration works and it is far worse than you imagine. What I put out is actually pretty mild compared to what I could say.

            I can only read what you put out there, and what is out there in the news.

            Why have Warren head it? It’s a bully pulpit. She has the ability to change the debate and perceptions around the role of banks. And the CFPB can do research. I don’t think much of its formal powers, but she can keep the banks in the media spotlight in a negative way for their misdeeds. That is not normally the source of power for an agency, but with her in that role, it could be very influential in shifting popular perceptions as to the role of banks.

            The reasons for appointing Warren are obvious, and you mention them yourself. She is mediagenic and popular with people who hear her talk. If voters like the president’s people, and if the president’s people convey a winning political message, the president should benefit from that at election time.

            Obama would never have Warren subjected to a no vote and appoint her, that would set him up for being raked over the coals for defying Congress. Of all the ways to get someone in the job, that is from a public perceptions standpoint the absolute worst in terms of creating maximum controversy (the hearings alone would be a circus).

            It has been done before– see John Bolton, for example. It’s not like that scenario would have been outlandish.

            The Republicans have handed him an opportunity. There stance is: We refuse to let the agency go forward under normal procedures unless we hobble it in a way no banking regulator is hobbled. Obama can say, ‘You have given me a no-win choice, to gut a part of the reform bill that was voted through by both parties last year and most voters want to see go forward, or make a recess appointment. You’ve forced me to make a recess appointment.”

            Okay and this is why I asked you to clarify how a recess appointment would actually work. Is it legal if the Republicans force pro forma sessions every three days in the Senate? Will enough Democratic Senators cooperate? You still haven’t addressed this, even though I’ve brought it up numerous times now.

            As for media, you really do not understand what a media campaign looks like. She has barely been on TV, given no exclusive interviews, no op eds. She got vastly more profile via her being beaten up before Congress than through her formal media ops. She’s only gone out to second tier venues and then very rarely.

            Who is not reading who? I said verbatim “It has not been an MSM friendly tour– it has been a getting down to business tour.” Translation: I fully acknowledge that she has not been on a media campaign, which you seem to have wanted. But Warren, despite her media friendliness, is a policy wonk. It was a good use of her talents to have her out on the road interacting with industry people– which is what she has been doing, despite your initial claim to the contrary.

            I don’t know how to persuade someone who refuses to read very obvious evidence. Everyone who knows DC can see what the game plan is. This is not how you treat someone you expect to be part of the team. She would have been announced as the person who was putting the agency together, not an ambiguous advisor. I have no idea how she was able to do it, but my contacts have confirmed my reading: the intent was that she’d be irrelevant. She was abused when she headed the COP, the assumption I am told by people with VERY high level contacts was that to the extent she did get any profile, she’d be ground down and retreat. They appear to have assumed she’d fold under the abuse, so she could be sidelined with the Administration having clean hands.

            Again, I can’t give this anonymous stuff a lot of weight. I severely doubt that Obama or Geithner actually explicitly told your contacts or anyone that Warren was being set up to fail, so it’s likely that at best this has been inferred by your contacts, so whatever “evidence” there is has been filtered through a set of eyes unknonwn to me, and then your eyes, before it gets to me. I don’t know why you should think that I would accept that as “very obvious evidence.” And a person’s political contacts tend to reflect their own political views, which leads to the possibility of confirmation bias.

          2. skippy

            @smith…what part of he hired or renewed contracts with those that brought this upon us all…compute…eh…Warren is the only crumb tossed too the commons, as if there was any ear at *all*.

            Skippy…I smell fear, your words are soaking in it.

          3. Yves Smith Post author

            Slade,

            Have you actually bothered looking at Warren’s calendar? I could get more TV than Warren gets if I hired a PR person (admittedly not Jon Stewart, but that fits with the idea of pandering to progressives). Similarly, she has few meetings with bankers, and many are repeat meeting (community banking and independent banking organizations). She makes (or takes, not sure who intiated them) calls with bank executives. That’s not bad, but it’s no way to try to win opponents over.

            When Hillary Clinton, who was a similarly disliked woman, was selling her health care program, she went around the country and met in person with executives in the industry. The minimum in a charm offensive is to go kiss the ring, as in meet with the people who don’t like you IN PERSON on their turf.

            As to Geithner and her “coexisting”, huh? Geithner managed to get his former mentor and master of bureaucratic infighting, Larry Summers, ousted (technically Larry left). Why should Geithner have any reason to want Warren around long term? He’s the driver of this train. There were tons of complaints among Obama team members about Shiela Bair, a Bush appointee, not being a “team player” remember?

          4. Slade Smith

            I have not “bothered” to look at Warren’s calendar til now, but I have heard Warren herself talk about what she has been doing the past several months, and seen numerous reports of her meeting with various industry leaders. There’s often more than one way to gain knowledge. I find it hard to believe that you had really examined her calendar either, or you would not had made this claim:

            If Obama had really wanted her to run the agency, he would instead have put her on the road on a charm offensive to the banks, she would have been doing tons of meetings with bank execs, with heavy MSM coverage of that campaign. And she would have been on TV at any and every instance. Did any of that happen? No.

            I scanned her calendar from December to April and picked out the only the meetings with big bank execs or big bank industry groups. I’m not even going to count the meetings with state bank associations, community or state level bankers, or community bank groups– there are far too many meetings of that sort to mention, over a hundred, as a conservative estimate. These too are meetings with bank execs, but you have now adjusted the goalposts so that a meeting with a community or state bank executive doesn’t count for much, but fine, let’s exclude all of those.

            So anyway, here’s what I picked out as meetings or calls with the big banks or the heads of the big banker groups:

            December 8th 8:30 Meeting with Brian Moynihan (President and CEO, Bank of America)

            December 9th 3:45 Call with Ken Chenault (CEO, American Express)

            December 16th 1:00 Call with Richard Davis (President and CEO, U.S. Bancorp)

            December 17th 3:00 Meeting with Jim Wells (Chairman and CEO, SunTrust)

            January 5th 3:30 JPMorgan Chase Visit with Jamie Dimon (Chairman and CEO)

            January 7th 1:00 Meeting with Kelly King (Chairman, President and CEO, BB&T)

            January 24th 12:00 Call with Richard Fairbank (Chairman and CEO, Capital One)

            February 2nd 2:15 Meeting with Michael Grant (President, National Bankers Association)

            February 11th 3:15 Meeting with Frank Keating (President and CEO, American Bankers Association)

            February 25th 9:00 Call with Jamie Dimon (Chairman and CEO, JPMorgan Chase)

            March 10th 11:45 Lunch Meeting with Richard Davis (President and CEO, US Bancorp)

            March 10th 5:15 Call with Frank Keating (President and CEO, American Bankers Association)

            March 10th 2:00 Call with Brian Moynihan (President and CEO, Bank of America)

            March 14th 9:00 Call with Arkadi Kuhlman (Chairman and President, ING Direct)

            Seems good to me– there are only so many big consumer banks out there, and she’s met with a goodly percentage of the CEOs and some of them more than once (You nitpicked the fact that there were repeat meetings with some small bank groups… is it a problem that there are also repeat meetings with the CEO of Bank of America and JP Morgan Chase? or that she met with the head of the ABA twice?).

            You are simply wrong about her not meeting with bank execs, whether we are talking about big banks, small banks, or anything in between.

            I look at her calendar and she has been meeting furiously with just about everybody– a cross section of everybody she should be meeting with. It is simply not a schedule of someone who has been leashed, warehoused, marginalized, or silenced. Quite frankly, there is just no reason to believe that Warren does not have complete or near complete autonomy in setting her schedule.

            Warren’s task is to build the agency. Judging by her schedule, she’s done exactly what she should have done. She’s built up her own personal credibility and the agency’s. She’s pretty much vaporized any objective doubts about her capabilities as an executive or a leader.

            It’s hard for me to see a valid complaint here. This is what good governing looks like! It’s not all about preening for the MSM and grandstanding. Perhaps that is part of her appeal to folks like myself… she does not have the hallmarks of a grandstander.

    1. Peter T

      Recess appointments are traditionally only made if the Senate recess is three days or more. Recesses of three day or more have to be confirmed by the other house. There is nothing in the books, however, that would prevent Obama from making recess appointments in a two-day recess. He should (oh, hope, sweet hope) appoint Warren in a recess and write a strong-worded explanation that the Republicans didn’t want consider any appointess for the job and, thereby, broke the law.

      1. Slade Smith

        There is some legal basis for the three day rule– see here. Attempting to go against that would put Democratic Senators in a tough spot, because Harry Reid and the Dems used the tactic of blocking Bush43′s recess appointments by having pro-forma sessions every three days. I think it’s doubtful that Democratic Senators would unanimously go along with such a strategy, and you’d need their cooperation. It’s also very unlikely that such an appointment would stand up in court… and you know that it would be challenged.

      2. Yves Smith Post author

        The belief among people in DC is that the five week recess from the end of July to Labor Day would be a defensible window. It is one thing to have pro forma sessions over one wee, quite another over 5 weeks. And another way to break it is to introduce some real business.

        But this is all moot, I’m just raising it to show there are options that Obama is not willing to take. He would first need to make a stink about Republicans making the country impossible to govern and creating uncertainty for business by treating legislation as an unending negotiation process. You’d start with that sort of talk before you escalated.

        1. ambrit

          mz Smith;
          It would be interesting to have a peek at the psychological profile the Conservatives had made on Bankster Obama. (I’m adopting an apellation suggested on an earlier thread.) Every serious political movement today does this. In the old days I think it was called “The Art of Politics.” Add a little science and you have a formidable tool.

  19. Sam Adams

    Obama has already lost the election and the amerikan people. Unemployment, student debt bubble ready to exlode, consuner’s credit limited and foreclosures combined with the worst housing market (including the Great Depression). It won’t matter who will oppose the democrats and Obama, unless there is a deo ex machia moment they are history.

  20. readerOfTeaLeaves

    Wonderful analysis, although not comforting.
    These bits particularly resonate:

    As with any well-crafted tragedy, the ironies are replete. Obama bent over backwards to be nice to Wall Street (and Greenwich) only to see his actions likened by hedge fund billionaires to the rape and pillage that Wehrmacht unleashed on Poland in September 1939…..

    …[meanwhile]…and the Repugnant Party is in the hands of Jacobins who are so intent on the purity of their laissez faire terror that they will allow their revolution to carry the United States over the brink rather than accommodate themselves to the realities of governance, starting with paying for those government services the people refuse to live without.

    Wow, analysis like this, plus “exploding Pintos”, the Ali rope-a-dope, and “porcine maquillage” all in one single post.

  21. Hugh

    The primary Obama electoral strategy for 2012 is to have one of the current crop of crazy Republicans run against him. The problem the Republicans have is that if they sound halfway sane, they alienate their base, and if they come across as insane as their base wants they alienate everyone else. The most sellable to the general population is Romney, but his problem with the Republican base is that he has the rep of a rudderless, indecisive, say anything kind of a guy. A case in point is his current attempt to recast himself as a shirtsleeve common man instead of the suit he has been all his life. And he is a Mormon, which much of the Christian right looks at as little more than a cult.

    Obama’s secondary strategy is to goose the economy from time to time to keep it from falling apart before the election. The White House has been talking about extending the payroll tax rollback for a while now. I suppose their thinking is that even if they don’t get it they can blame the Republicans for failure to do so.

    I don’t see Warren as part of their calculus. In the great scheme of things Warren and the CFPB are minor matters. Warren has symbolic importance for the Democratic base, but Obama since the 2008 campaign has had no interest in the base and been hostile to it. His whole view of it is that it has nowhere else to go, so f*ck it.

    Ineptness is a matter of perception. From the perspective of many out here, he is inept and much worse. From his own, he is nothing of the kind. He is pursuing, with a fair amount of success I might add, the conservative, corporatist, kleptocratic agenda he wants. I would say he sees Warren as more of a nuisance than a threat. With regard to her he is applying the time honored strategies of hanging her out to dry, death by a thousand cuts, and hoping that she will just go away.

    I don’t see him recess appointing her, it’s just not his style, but even if he did, it would only be a largely symbolic victory for the Democratic base.

    1. Jumpjet

      As I think Lambert has said, why choose between stupid or evil when you can choose both? Obama has never been a very apt leader. His campaign of terror against the average American requires nothing on his part but doing what he’s told.

  22. VietnamVet

    Great Post.

    Barack Obama was raised and educated to be the elite’s front man. He cannot be anything more. In a two party system, with wedge politics, and billion dollar marketing campaigns; the middle class has a problem; they have no one to vote for who represents their interests. Vote for the loons or the flim-flam man. From such existential choices, revolutions are born. “We are all Egyptians now”.

  23. Peter T

    Obama is neither liked by bankers who have the money he needs and nor liked much by his previous voters, see, for example, his “low cost” fundraiser in Florida, under
    http://www.politico.com/politico44/perm/0611/empty_seats_108717af-a6fd-4c08-b970-fe9b3eb2e4c4.html
    where Obama couldn’t fill the seats anymore. He still gets some money from bankers at dinners like the one that the New York Times wrote about, but if he supports Warren, he won’t anymore.

    And Warren? Could it strengthen the Democratic Party if she would primary Obama? Anyway, she would need a strong motivation to throw herself into a campaign.

  24. decora

    “(which includes its thuggish methods for maintaining message discipline among its putative allies)”

    Can anyone fill me on what Yves is referring to here? I have become obsessed with his unprecedented Espionage Act prosecutions, but I am rather ignorant of other ‘message discipline’ actions.

      1. Peter T

        Van Jones believing in a big conspiracy about 9/11 is first a reason to disown him in the Democratic party and second a reason to have structures in place to disown. Believing in big conspiracies will hurt a party, independent of the percentage of believers inside the party. The Republican leadership does the same with birthers.

  25. Conscience of a Conservative

    The answer is fairly obvious. Tim Geithner is making the calls. He’s not pro Warren. Keep in mind he’s also done battle with Sheila Bair and is a protege of Robert Rubin and Larry Summers.

    1. Jonathan

      This might be true, but brings up a good point: The very fact that Geithner is still in place is the clearest signal of where the President stands on true reform. But unfortunately, the clearness of this signal is all relative.

  26. Jonathan

    Excellent post. I hadn’t been following the latest happenings with Warren or the CFPB and this caught me up nicely.

    You mention that Warren has a certain stature with the public that makes it difficult to undermine her work. I’d like to think this is true, but I’ve found that even where someone is doing work for the common good, their voice is only as loud as the nearest corporate owned broadcaster allows it to be. Your mention of Bill Moyers was one example of where this was not so true, but Bill was certainly the rare exception.

  27. Hugh Sansom

    I find Elizabeth Warren a particularly interesting phenomenon. In some respects, she reminds me of Brooksley Born — someone with great insight and catching the entrenched powers unprepared. Warren is a very rare breed at Harvard Law School, someone who did not go to the big five Elite God-Blessed Law Schools. When Elena Kagan was named (pathetically predictably) by Obama to the Supreme Court, there was some comment that only Harvard and Yale would now be represented among the justices. Warren went to Rutgers. Obama has been a hardcore Harvard lackey in many, even most, of his appointments.

    This is not a trivial observation about “old school ties.” The issue is one of concentration of power. A particular school affiliation is only a symptom. As more and more are noting with greater and greater frequency, a tiny percentage of Americans are benefitting at the expense of the vast majority. This is reflected in the coddling of Wall Street at the expense of the entire country.

    In the case of Obama specifically, there is a question of psychology. He shares with the president he most resembles, Bill Clinton, the experience of being abandoned by a parent. In Obama’s case, from the sound of it, he was completely abandoned by one parent, his father, and substantially abandoned by the other. He demonstrates a pattern of behavior that psychologists likely understand — a desperate need to please power figures. But this is just armchair psychologizing.

    More important is a problem evident in the growing pattern of political decision-making that isn’t just _indifferent_ to the welfare of the overwhelming majority, but is directly repugnant to it. A huge percentage of the executive, legislative, and judicial branches of the United States systematically disregard existing law (as Obama has now in Libya or in his treatment of Bradley Manning, among others, or as the Supreme Court did in Citizens United or in Bush v Gore). This huge percentage also disregards the general welfare — and the longterm wellbeing of the United States — to serve a tiny fraction of Americans, arguably numbering no more than 10,000, and perhaps far fewer than that.

    The three branches of the US government, under the Constitution providing checks and balances with respect to one another, are instead a collective agency capture by American Oligarchy. The system of checks and balances exists today only in the petty bickering between two very similar pseudo-parties. Otherwise, it is absent. So what are We the People to do when (1) the entire government is failing to serve our interests and (2) that same government has very effectively ensured its longevity and continued capacity to serve those interests it does prize?

    This is not idle rhetoric, nor is it a view isolated to the left (as it was in the past). There is a growing, very respectable literature on the decline or failure of American democracy. It includes scholars like Sheldon Wolin, Larry Bartels, Joseph Stiglitz, and Paul Krugman. And that’s just four.

    Elizabeth Warren has sailed on through American doldrums. Why, I don’t know.

    1. financial matters

      When Elizabeth Warren first started studying bankruptcy I think her findings were counterintuitive to her presuppositions. She found that most weren’t deadbeats but were bankrupted by medical bills or unemployment. Her book The Two Income Trap laments the fact that women joining the workforce didn’t lead to the extra income being used to increase a families flexibility and ‘emotional health’ but went to a ‘better home’ in ‘better neighborhoods’ often for the search for ‘better schools’ for their children. She found that families would rather live near a toxic dumpsite than in a bad school district. Families became dependent on the two incomes instead of becoming more flexible and a loss of one job or one parent needing to stay home with a sick relative could lead to bankruptcy. She seemed to have picked up the mantle of the middle class and never looked back.

      This was a good lecture she gave at Berkeley in 2008.. The Coming Collapse of the Middle Class.. http://www.youtube.com/watch?v=akVL7QY0S8A

  28. Skippy

    LONG EXTENDED SIGH……….if it is to be…that we must pin our seemingly last vestiges of hope[?] in reforming>>>Contractual Law…on one pony, because none else will take the bit (it takes monies to be elected)…..so be it [sigh+!!!!}.

    After Obama, I am loth to back any one in such a way, I now give my voice, will you[?], she needs not money at least (scruples can not be bought) , just our bloody hearts (worth more in my book).

    Skippy…Elizabeth I withdrew my support….not because of your nature…but the game you entered…amends, if you can accept my humble apology. Rip their balls off…after you ice them!

  29. Doug Terpstra

    Insightful commentary, Hugh, and terrific blog, apocalypseroad, thoughtful realism with a hopeful spirit.

  30. Adroit Prestidigitation


    sleigh of hand to shift responsibility for the Adminsitration’s refusal to appoint Warren on the Republicans.

    The failure of the Team

    Here you got chore Donkey Hypocrisy Party telling us that they are pushing for an end to the Bankster Gottcha Overcharges that are designed to fund bank president’s new yacht. Telling us, “Yes! We are trying to stop the robbery but we are frighted of voting against Those Rough-Elephants From The Heresy Party.”.


    “His sleight and
    his covin.” –Chaucer

Comments are closed.