4 Bogus Attacks Bankers and Their Political Puppets Are Using to Attack Elizabeth Warren

No reformers question whether Elizabeth Warren is the best candidate to head the new Consumer Financial Protection Bureau. She's a lauded scholar, an inspiring advocate who will draw talented and dedicated reformers to the new agency and she came up with the whole idea for creating the CFPB in the first place. Nominating a dedicated reformer like Warren will send a clear signal to the entire world that the U.S. government is serious about regulating the banks that drove the global economy off a cliff. Nominating anybody else will send a clear signal that bankers still have veto power over key political appointments.

By contrast, there are no compelling arguments against appointing Warren. Four have basically been offered, and they are all so weak that it's hard to view them as anything but bad-faith excuses to block somebody the bank lobby simply doesn't like. There's a perfectly rational reason for the bank lobby not to like Elizabeth Warren: she's spent much of her career explaining how elite bankers rip off American families, and there is every reason to believe she will crack down on this behavior if she's given the CFPB post. That's not a knock against Warren—that's what the CFPB director is supposed to do.

Here are the lousy objections that bankers and their apologists are voicing:

Bogus Talking Point #1: Elizabeth Warren is insufficiently attuned to the benefits of financial innovation.

There is simply no evidence for this claim whatsoever. Her career has been devoted to empowering the American middle class. She wants to see financial innovations, she just wants them to be good for the middle class, rather than tricks and traps designed to extract its wealth and convert it into bonuses. This is part of Warren's political appeal. Not only is she right about policy, but her policies resonate with American families left, right and center. Find me a politician who is willing to publicly advocate for tricks, traps and big bonuses, and I'll show you a politician who can't get re-elected.

Bogus Talking Point #2: Elizabeth Warren lacks the management experience needed to run a federal agency.

This is not important, nor is it a typical standard for agency heads. As Tim Duncan of the Cambridge Winter Center for Financial Institutions Policy emphasized with me in conversation, there were plenty of Bush-appointed regulators who would have been rejected if "management experience" were a prerequisite for regulatory chiefs. When John Dugan was named Comptroller of the Currency in 2005, he had no management experience—he was a bank lobbyist and had been for more than a decade.

"Management experience" is banking industry code for "one of us." Bankers and their congressional backers weren't worried about Dugan's lack of management experience, because they knew he was an industry activist who could be relied on to promote whatever banks believed to be in their own short-term self-interest, regardless of the consequences for society at large.

Just as important, agency heads are not HR reps or administrative officers, and there are plenty of qualified people who can help Warren flesh out the new agency. Those people are going to be hired by whoever ultimately ends up heading the CFPB, and pretending that Warren will be getting things up and running all by herself is more than a little bizarre. What she can do is set the tone for the new agency, and develop a culture of regulatory rigor. She's already proven that she is capable of this—her work as Chair of the Congressional Oversight Panel for the Troubled Asset Relief Program has already changed the way Washington talks about banking and bailouts. Nobody else under consideration for the job can put that on their resume.