America Still Needs Elizabeth Warren, And The Bank Lobby Is Still Lying About Her
Of all the accomplishments Elizabeth Warren has amassed during her lifetime, one of the most impressive is also one of the least well-known to the general public. Warren was a co-founder of Credit Slips, a very technical, influential blog on banking and bankruptcy. She hasn't blogged there since taking up her post as Chair of the Congressional Oversight Panel for the Troubled Asset Relief Program, but a review of her posts reveals a set of truths that Warren's opponents in the bank lobby do not want to acknowledge. While Wall Street bankers like to smear Warren as an ideologically driven crusader, Warren's blogging reveals her to be the exact opposite: a serious student of economic evidence, eager to embrace good ideas from any source.
Take a look at this post from September 2008, in which she praised economists Greg Mankiw and Ken Rogoff. Both of these economists are, let's say, unpopular among liberals. Mankiw was chair of President George W. Bush's council of economic advisors, and Rogoff is an alum of the International Monetary Fund, where he pushed draconian cuts in social programs in developing nations in the name of balanced budgets.
But it turns out that both Mankiw and Rogoff had something interesting to say at a forum back in September 2008. And what did Elizabeth Warren have to say about it? She calls them "interesting," "terrific," "calm," and "funny." She doesn't blast them for their backgrounds with institutions that are generally reviled by progressives, she just emphasizes that they're serious thinkers who are making good points about the role the bank bailout played in the economy:
Greg's work with the current administration and Ken's background with the IMF and on the Board of the Federal Reserve add a certain credibility to their assessments of conditions on Wall Street. If they are right, the $700 bailout is saving some investment bankers' jobs in the short term, but overall it is just making the financial system worse.
Aside from seeking out common ground with aggressive conservatives, Warren also displays a deep-rooted intellectual curiosity throughout her blog postings. One of the most obnoxious bank-lobby smears against Warren is that she doesn't fully appreciate the benefits of financial innovation, and that she'll cut off useful credit to poor people by pushing overzealous consumer protection. Even some otherwise respectable bloggers have taken up the chant, without really bothering to investigate whether there's any shred of truth to it. Even a casual browsing of Warren's blog work reveals this to be a silly charge.
In a post from May 2008, she details a Wells Fargo customer who was quite clearly ripped off by her bank. Warren provides a very cautious analysis of the situation. While Wells Fargo's actions were an obvious disgrace to the bank itself and the regulatory regime, the appropriate response is not obvious. Maybe the kind of product Wells Fargo was selling should be banned outright. Maybe it should only be provided with more rigorous disclosures. Maybe consumers should have to ask for the product before bankers are allowed to discuss it. The point is, Warren isn't eager to claim that an obviously abusive product should simply be banned—she wants to make sure that policymakers don't unnecessarily cut off credit to well-informed adults who want it.
Again and again, Warren reveals herself to be a devout student of data in her blog work. It isn't sexy, it sure as hell doesn't traffic in the broader blogosphere, but it's the mark of someone who truly cares about getting it right, rather than merely developing a set of popular talking points. Warren clearly loves reading economic papers on the effects of various credit policies, and determining their effects on both individuals and society at large. That's exactly what we need from a bank regulator, especially at the Consumer Financial Protection Bureau.
You can find all of Warren's Credit Slips blogs here. I'll be highlighting more of her blogging in future pieces, but it's clear from these posts alone that she is not an ideological crusader. This fact, in truth, is why the bank lobby so fervently opposes putting her in a position of regulatory authority. For decades, all of our bank regulators have been driven by ideological agendas. They've aggressively pursued any policy that creates short-term profits for Wall Street, under the view that anything that generates money for Wall Street is expanding credit in society and furthering productive economic growth. President George W. Bush even appointed a bank lobbyist to the top regulatory post in the nation. The results of this plan were disastrous, as everyone living through the current recession can attest.
Of course, there is an alternative to appointing regulators who will always put bankers and brokers first. We need a rigorous scholar who cares about finding the right policies to elevate the middle class and further healthy economic growth. We need Elizabeth Warren.