Corporatists in Democratic Caucus Are Terrified of Elizabeth Warren
There has been, in recent days, a groundswell of support for Elizabeth Warren, one of the top candidates to head the new Consumer Financial Protection Bureau. One less-noted reason for all this outspoken fervor is that, for many liberal critics, Barack Obama’s economic team is something of an intellectual cabal. Starting with Treasury Secretary Tim Geithner and chief economic adviser Larry Summers, the senior members of this team are all people “who have Bob Rubin on their speed dial,” as one of these critics told me. They are, in other words, part of the deregulatory brigade led by then–treasury secretary Rubin in the 1990s who helped set the stage for the financial disaster by giving Wall Street most of what it wanted, whether it was Glass-Steagall repeal or reduced regulatory oversight of derivatives trading [...]
Hence the enthusiasm among the losers in this debate for Elizabeth Warren, the fiery Harvard Law professor who largely sided with the Volcker-Lincoln camp and who first came up with the idea for a consumer-protection agency. Warren is most definitely not a Rubin acolyte. She’s more likely to be the sort of person who reveals to the public just how many administration speed dials Rubin occupies. Warren has long abhorred the sort of inside-the-box thinking that led a lot of smart people in Washington to conclude for more than two decades that Wall Street could be left to sort things out on its own.
That clubby insider's mentality has given us and the world disaster after disaster. They can't and won't regulate themselves. The only hope is an outsider, someone who has already proven her mettle by aggressively overseeing the TARP program, and proving that she's independent and incorruptible.
Today, I wrote in The Hill:
Now, there’s a push to define the new consumer bureau, and Wall Street boosters in Congress and the White House, such as Treasury Secretary Tim Geithner and President Obama’s chief economic adviser, Larry Summers, are fighting to defang the agency before it has a chance to firmly establish itself.
Meanwhile, progressive activists want someone they can trust in that important new role, and there is no better person for the job than Elizabeth Warren.
Some in the administration seem panicked at the prospect of a Warren nomination. One anonymous administration source fretted to The New York Times about her “crusading style, her seemingly visceral loathing of financial services companies and her expansive way of interpreting assignments.” Given the mood of the country, those are good things! [...]
Warren’s Senate path certainly would be difficult, but she’s earned respect from Republicans like Iowa Sen. Chuck Grassley for refusing to play nice with the White House on TARP oversight. Sen. Bernie Sanders (I) of Vermont certainly relishes a possible floor fight: “It will allow for a serious debate as to the role that government should play in protecting the American people against the outrageous behavior we have seen on Wall Street.” Even Obama spokesman Robert Gibbs said on Monday that she was “very confirmable,” suggesting Warren may indeed be getting serious consideration for the job.
And if the Senate continues its reputation of being the place where good things go to die, Obama could always give Warren the job via recess appointment.
Enter Sen. Chris Dodd. His personal unpopularity forced him into early retirement this year, and given his lack of accountability (he'll be gone soon anyway) he's taken the lead in fighting back against a Warren nomination, thus giving cover to Senate corporatists who also oppose Warren but don't want to do so publicly.
Progressives have been strongly pressuring the Obama administration to appoint Warren ever since the Wall Street reform bill passed in Congress. Some have argued that she be given a recess appointment if a minority of senators block her confirmation. Dodd objects to that idea.
"I think that would be a huge mistake," Dodd said, in response to a question from TPMDC. "Recess appointments. No, no, no."
"I think those are, you know, Republicans used to do it, I think that's a mistake," Dodd added. "Except in the most extreme circumstances where you need someone because of an emergency pending, but as a routine matter, I think it's a fundamental mistake."
Yes, Republicans used to do it. And when they're in power, they'll do it again. And given the GOP's zeal to obstruct everything, you have to use whatever tools are available to get the job done. Yet there is Dodd, making incoherent arguments against a recess appointment:
Dodd's chief concern, he said, is swiftness. If the agency isn't set up quickly with credible leadership, it will be vulnerable to GOP attacks.
"You've heard the Republicans talking about repealing this bill," Dodd said. "One of the first efforts they'd need would be to repeal this agency. If it's not set up and running, the case against it becomes easier. So you want an established entity, as quickly as you can, with credible leadership. And if you don't have that then you leave it vulnerable to the attacks. They will try to get rid of this agency, I promise you, when I'm gone. So having someone there that's established this, getting it moving in the right direction, is very, very important, or you could lose it."
What will be quicker -- trying to get a nominee through a Senate that has over 300 House-passed bills bottled up, and dozens of stalled nominees? Or a recess appointment that can be executed by executive fiat during the August recess?
Fact is, the corporatists in the Senate Democratic caucus are terrified of a Consumer Financial Protection Bureau that will actually hold Wall Street accountable. People like Ben Nelson loathe Warren, and he isn't alone among Democrats. That's why Dodd is doing their dirty work.
Meanwhile, Republicans are Republicans, you know where their priorities lie. And there's little fear of pissing them off and having them gum up the works, because they've been pissed and gumming up the works since day one.
So sure, nominate her, send her name to the Senate. And if the Senate doesn't act expeditiously, then recess appoint her.