Senator Warren and America Win in a Skirmish in a Long Struggle Against Wall Street’s Coup

Yves here. Bil Black underscores why Senator Warren was able to force the Administration to back down from its plan to have Antonio Weiss Serve in the number three position at Treasury. Weiss was all too obviously a patronage pick, and not one based on having th right skills for the role. He also reminds us that the Administration is set on its plan to continue getting Wall Street cronies in positions of influence, even if in Weiss’ case, it is a position of lesser influence than they had intended.

And lest you think I’v overstating the case in calling Big Finance’s influence over government a coup, please read Simon Johnson’s 2009 Atlantic article, The Quiet Coup.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Originally published at New Economic Perspectives

There is an excellent indicator that Senator Warren’s successful effort to block the appointment of Antonio Weiss, an Obama Wall Street bundler, to a senior Treasury position while merely a skirmish was an important accomplishment. The financial media that pander most slavishly to the Wall Street and the City of London’s CEOs is enraged at Warren’s success. The headline in the UK’s Business Insider reveals their angst “Elizabeth Warren Wins, The Treasury Loses.” The article doesn’t try very hard to support that headline with facts because there is no real case to support the claim.

A number of former Treasury officials thought Warren was way out of line, and that Weiss’ experience was perfect for the position he was being nominated for.

The White House stood by its nominee throughout, stating last month, “This is somebody who has very good knowledge of the way that the financial markets work, and that is critically important.”

No argument on that here.

Let’s begin with logic. There’s no logical way to declare that “Treasury lost” without knowing who else is willing to take the position of Under Secretary for Domestic Finance. No one thinks President Obama selected Weiss on the merits. He was selected because he bundled Wall Street campaign contributions for Obama’s campaigns. Treasury does not “win” when we appoint such people – Wall Street wins. We have no way of knowing whether Obama will select someone for the position who is better or worse than Weiss. The Undersecretary position is prestigious enough that we know that Obama has the ability to appoint hundreds of people who would like to take the position and are better qualified than Weiss. As a matter of logic, therefore, the authors could not support their claim.

The authors also don’t seem to have felt they could even try to make a case for their claim. They simply quote authority rather than reasoning. Their effort unintentionally made Warren’s opponents look bad. Consider the extraordinary arrogance of the statement “A number of former Treasury officials thought Warren was way out of line.” A U.S. Senator who is a member of Treasury’s oversight committee is completely “in line” to oppose nominees. Warren obviously did not oppose Weiss for partisan reasons. She opposed him on the merits. Weiss does not have a strong background for the skill sets required for the Undersecretary position. Again, no one can claim with a straight face that Obama selected Weiss on the merits. Of course, the same thing was true of many of the Treasury officials who think it is “way out of line” for Senators not to rubberstamp political reward-style appointments of Wall Street bundlers.

The best that the White House could come up with was that Weiss “has very good knowledge of the way that the financial markets work.” That description fits about one million Americans.


Warren has given Obama a golden opportunity – a “do over.” Obama can appoint someone who has a “very good knowledge of the way that the financial markets work” – and a passion for changing how they work in order to end the Wall Street culture of corruption and create radically improved markets based on integrity and service to investors with radically reduced profits. Obama could pick someone good for America, not “Treasury” and its Wall Street overseers. It is “critically important” that the financial markets be restored to a condition in which they aid Main Street and small investors rather than acting as parasites and predators.

At this juncture, the White House is signaling its continued opposition to serious reform.

“‘We continue to believe that Mr. Weiss is an extremely well-qualified individual, who is committed to the policy goals of this Administration and firmly supports the Administration’s policies on fostering economic growth and supporting our middle class. We are pleased that he has accepted the role of counselor to the Treasury secretary.’”

The administration continues its policy of never missing an opportunity to miss an opportunity to openly side with the American people (all of them, not simply “our middle class”) and demand the end of the corrupt culture of Wall Street. Warren has given Obama a priceless opportunity for a “do over.” No one expects Obama to do the right thing on the appointment, but Warren is doing the right thing by giving Obama a new the chance to do the right thing.

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  1. hidflect

    Is Obama now asking his minders to furiously flick through the electronic rolodex of JPM/CitiGroup/Goldman Sachs ex-employees for a new nominate? What’s wrong with this guy? As a very risk-averse CEO I think he’s been bamboozled by smarter economic minds into believing he needs to go with “trusted” people to maintain the economy and just follows the lead of whomever talks to him in a sophisticated manner.

  2. timotheus

    I’m surprised the White House didn’t add after ““This is somebody who has very good knowledge of the way that the financial markets work,” the phrase “so well.” It’s as if they didn’t live through the last decade and think we didn’t, either.

  3. bkrasting

    Warren won? Weiss is starting at Treasury next week. What will he be doing? According to the T Sec:

    Mr. Weiss will “provide advice to me on a broad range of domestic and international issues, including financial markets, regulatory reform, job creation, and fostering broad-based economic growth,”

    If this is a ‘win” for Warren what would have been a loss?

    1. Northeaster

      It’s the same way Warren is looked at when she publicly scolds various Administration officials in front of her Committee. Lots of harsh language, but absolute zero appearances by those who can really do damage (i.e. prison) – The Department of InJustice. The masses eat it up, as though she’s scoring multiple victories against The Banking Cartel, when in reality, it’s the same as it ever was, only difference is the costs are a little higher, which they make up in nanoseconds over a few days time.

      Just another pretender pol, much like many of the Republicans that were swept into office in 2014. The establishment is here to stay – too much money and power is at stake, and the establishment will never give that up.

      1. Banger

        You misunderstand how politics is “done” in Washington and what goes on there. Nothing and I mean nothing of significance is done on major issues that is not a reflection of pure power–and I mean power that has nothing to do with political parties. Warren has been posturing but that’s how politics is done in Washington–you posture, you elbow into position by making bold moves while, at the same time, making all kinds of side-deals to avoid making enemies–Warren’s much criticized position on FP and Israel are strategic positions every politician takes in Washington to avoid making enemies that would bar you from any clout. For example, let’s assume Warren took a stand on Israel’s brutal policies if she did that she would be attacked at every appearance mainly by the rabidly pro-Israel MSM, her colleagues would attack her, her book sales would plummet and so on and her career would end and she would slip into obscurity. Instead, she chooses to stay in the political game by playing it.

        The results of her staying in the game is to be focal point for dissidents and those who believe in rule-of-law and accountability–even though, in the short run, not much changes. However, in the Washington game, Warren has created space for bureaucrats and minor politicians and operatives to enter into the play–because you haven’t seen these things close up you think politics is about sermonizing and that, all of a sudden, decent people will see the truth, and reform will happen. Well that is not even remotely the case–nothing changes there unless force is applied and Warren’s method has a chance of working in concert with some support in the electorate and, more importantly, in the MSM–if it becomes acceptable to write favorable stories about Warren then that also gives “room” for others to come in. By itself I don’t think Warren’s moves will be decisive but if we unite under the sorts of things she champions those ideas will get out into the popular culture and something can happen perhaps with some important oligarchs coming into her camp.

    2. Yves Smith Post author

      He does not have execution authority. He’s a mere advisor with no formal power. Treasury has people with Weiss’ views on its speed dial already.

      Obama still has to fill the #3 Treasury slot.

      For Obama to have to back down on an appointment, and due to opposition from within his own party, is a meaningful revolt. You would not have seen three screechy articles in the NYT Dealbook and a campaign in the Washington Post (with more abject misrepresentations than in Dealbook, which is hard to do), if the Administration wasn’t committed to winning this fight. Warren has just told anyone with big fiance ties who wants an Administration post that subjects them to confirmation that she will rake them over the coals.

      The attacks on someone as powerfully placed and heretofore low public profile as Weiss will make other Wall Street cronies think twice before taking Administration offers for revolving-door jobs, which is progress. Even though this may seem modest, this is a demonstration that the banksters don’t always get their way, and denting that perception of invincibility is a critically important step in weakening their power.

      1. Banger

        Amen, Amen, Amen. Well put–better than I said it. Her “victory” is a victory also because she shows she has clout and that means she will have people approaching her as an ally.

      2. bkrasting

        YS – “Obama still has to fill the #3 Treasury slot.”

        Does he? I think it will take a very long time to find another soul to take this job. That, or the individual has no ties to/knowledge of the domestic and international capital markets.

        Still struggling to see how this gets spun into a ‘win’. For who? Warren? We shall see. Now she has no friends with the leaders of either party.

        1. Demeter

          Warren IS the leader of the party–de facto.

          She is the only one promoting the American people and the party’s traditional platform. Obama is less than a lame duck. Kerry is an ass, still. Biden is still the pandering opportunist. Hillary is waiting for a cue that may never come. Harry Reid and Nancy Pelosi are bookends, not leaders.

          The Democrats haven’t had anything like a leader since Obama betrayed his supporters, just before Inauguration 1. People who would have followed him through hell were thrown unceremoniously under the bus at every opportunity.

          Karma is not a patient lady.

  4. Banger

    Because this event, even though it does not appear to be that big a deal, is seen as a victory by Warren, her clout goes up in Washington particularly in the MSM. She knows how to play the game there and is immersed in it, clearly and she is one of the few pols who I know mean well. She has no background of being corrupt.

  5. tiresoup

    I can’t believe I even need to say this. Obama = Wall Street. Wall Street = Obama. How do I know? Everything he’s done since the 2008 election.

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