Economy

Elizabeth Warren Attacked at Hearing: Why She Scares the Hell Out of Republicans

Many Republicans have stopped pretending their actions are motivated by anything except a desire to serve Wall Street and other large corporate interests.

Editor's note: During an unusually contentious hearing on the Hill Tuesday, Rep. Patrick McHenry, R-North Carolina, lashed out at Elizabeth Warren, the fierce consumer advocate tapped to head the Financial Consumer Protection Bureau, browbeating her and falsely accusing her of "lying." Three of the top five industries to contribute to McHenry's campaign are commercial banks, insurers and accounting firms, so his opposition should come as little surprise, but the unusually aggressive grilling caught observers by surprise. The New York Timescalled it a "rare collapse of the decorum that usually pervades discussions among even the most fervent opponents on Capitol Hill." What is it  about Warren that has Republicans so hot?

"Money doesn't talk," sang Bob Dylan, "it swears." Rep. Patrick McHenry gave the week's most famous 70-year-old a dark birthday gift on Tuesday by proving that those lyrics still ring true after nearly half a century.

McHenry's savage attack on Elizabeth Warren and the Consumer Financial Protection Bureau was an obscenity by any definition except the FCC's, an assault on human decency proving once again that Wall Street's Capitol Hill goon squad is prepared to discard decency at a moment's notice to serve its masters.

One of the best ways to understand events like today's hearing is by looking at the actors involved. Today's case study is Patrick McHenry, Republican from North Carolina. He may have disgraced himself before the voters today, but look on the bright side: Rep. McHenry is now Wall Street's "Employee of the Month."

McHenry, like other Republicans before him, is just the latest symbol of a party that's stopped pretending its actions are motivated by anything except a desire to serve Wall Street and other large corporate interests.

Meet Rep. McHenry

I'll say this for Patrick McHenry: he knows who pays his bills. His top campaign contributor in the last election was Wells Fargo Bank, which paid a large settlement after it was found to have repeatedly laundered money for the drug cartels that have killed more than 35,000 people in Mexico.

Other top contributors include Bank of America, the American Bankers Association, and PriceWaterhouseCoopers, the morally compromised accounting firm that overlooked financial misdeeds at AIG and Goldman Sachs, among others. (It also looked the other way as Goldman shafted AIG -- while both companies were clients.)

The top industries contributing to McHenry's reelection include real estate, insurance, commercial banking, and accounting. Fifty-four percent of his campaign contributions came from PACs, and 40 percent came from large individual donors. A man of the people, he ain't.

Lies and the lying liars who lie about lies

It was ironic that McHenry chose to attack Warren's integrity by claiming she was lying, of all things, since the attack on CFPB has been nothing but a series of lies. McHenry's statement on Tuesday promoted the GOP's biggest Big Lie, that CFPB has unrestrained and excessive executive power. Actually the opposite is true: GOP cynics and complicit Wall Street Democrats worked to weaken the agency so much that it now has the bare minimum authority it needs to function, and it should be strengthened in years to come.

Tuesday McHenry and other members of the GOP Goon Squad claimed that Warren lied about the advice she gave to Treasury Secretary Tim Geithner and state attorneys general regarding the widespread foreclosure fraud conducted by McHenry's paymasters. A quick review of the record reveals she did no such thing. It also shows that the Goon Squad was just as thuggish in March as it is now. Back then they suggested it was somehow improper for Warren to advise the president, his Cabinet, and anyone else they directed her to advise. As special assistant to the president, that was her job.

McHenry also displayed the seemingly infinite wellspring of pettiness that corporate political hacks seem to always have on hand. His other accusation of lying arose from his indignation that Warren wouldn't spend her day waiting for Congressional Republicans, who were planning to leave the hearing for other business and then return later in the afternoon.

Rather than apologize and reschedule, McHenry accused Professor Warren of lying about the schedule established between Warren and his staff, saying, "We had no agreement. You're making this up." Logic tells us McHenry couldn't possibly know what his staff may have said to Warren or her staff members, since he didn't participate in those conversations. This was just petty crudeness.

The Superpowerful CFPB demands one million dollars or it will blow up the planet ...

Those are the small lies, however. The Big Lie is the suggestion that the Consumer Financial Protection Bureau is somehow "too powerful." To hear Republicans talk, you'd think CFPB is an evil empire in a giant underground lair -- one that could soon feature super-villain Elizabeth Warren, sitting at a giant console and laughing menacingly as she sends her forces out to torment America's innocent bankers.

But here in the real world, the organization was downgraded from an independent agency to a bureau in last year's Dodd/Frank deliberations. That was done to gain Republican votes that somehow, at the last minute, never materialized. (Duplicity is another Goon Squad trademark, although corporatist Dems benefited from this charade, too.)

That same (non)deal placed CFPB inside the Federal Reserve, and gave it a dotted-line relationship to the Treasury Department. (Those institutions aren't known for their consumer-friendly attitude toward bank regulation.) What's more, CFPB was given the additional hurdle of being forced to have its rules approved or denied by an inter-agency council. That's a pretty severe dilution of power for an evil super-agency.

These weakening actions were taken against the advice of 18 former members of the Federal Reserve's Consumer Advisory Council, and despite the fact that Republican Treasury Secretary and ex-Goldman Sachs CEO Hank Paulson said the country needs a strong and independent agency.

The banks' minions

The bureau can still do fine work, but it's anything but super-powerful. When hacks like Patrick McHenry hold hearings called, "Who's Watching the Watchmen?" or describe CFPB as "a super class of administrative elites," they're just doing the dirty work for their Wall Street paymasters.

That's also why Republicans introduced a flurry of bills designed to strip the bureau of a director and replace her with a committee, further weaken its authority, and weaken longstanding presidential authority over appointments. Those bills were shepherded by Finance Committee Chairman Spencer Bacchus, who famously said, "In Washington, the view is that the banks are to be regulated, and my view is that Washington and the regulators are there to serve the banks."

Mission accomplished, Rep. Bachus.

What's more frightening to a banker than a super-villain?

It's important to remember what Elizabeth Warren has done that's frightened the banks so much. So far she's merely tried to offer suggestions on how to rectify widespread bank criminality in the forging of documents and other illegal foreclosure actions. She's begun building a consumer-friendly organization. And she's tried to design a simpler mortgage loan application, so that borrowers actually understand the contract they're signing. Amusingly, banks have suggested a readable mortgage contract would "stifle innovation" -- which is true only when the word "innovation" is used as it often is in financial circles: as a synonym for "deception" or "predation."

Warren tells the truth, talks straight and fights for the middle class, and that makes her dangerous to the people who call the shots for "leaders" like Patrick McHenry and Spencer Bachus. Those "leaders" are serving the interests of Wall Street firms that fear Warren and CFPB because they'll interfere with some of their core business practices: Unreadable mortgage documents that contain secret traps for unwary consumers; credit card ripoffs and deceptions; and dishonest underwriting practices that threaten borrowers, investors and the entire economy.

For America's top banks, deception and trickery are part of the business model. That's why CFPB and Elizabeth Warren are a threat.

America's Most Defrauded

The banks have deceived and exploited millions of people. But perhaps no group of Americans has been more suckered than Tea Partiers. In what may be the biggest sales fraud case in history, this heavily anti-Wall Street movement elected a crowd that lives and breathes to serve bankers. They should be listening to one of Mr. Dylan's best and angriest songs: "You've got a lot of nerve to say you are my friend ...."

As for Warren, Rep. Elijah Cummings tried to cheer her on by asking her to "keep on the battlefield." He might just as well have quoted an old gospel song, "Keep On the Firing Line." Because anyone who stands up for consumers and against Wall Street is going to be targeted by goon squads, just like Elizabeth Warren was targeted today.

McHenry's name sounds a lot like that of American patriot Patrick Henry, who famously said "Give me liberty or give me death." The representative from North Carolina isn't likely to make that kind of sacrifice. He won't even sacrifice a campaign check or a meal at the club with his banker pals. To protect those perks, Patrick McHenry's willing to attack a good public servant like Elizabeth Warren -- and the consumers she's trying to protect.

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