The White House snatched back one of the few bones it’s thrown to the people outraged at the looting of the United States Treasury by failed financial concerns – the big banks and Wall Street. The promised appointment of Elizabeth Warren as head of the new agency to protect consumers from the financial services industry has been seriously downgraded. Instead of running the Consumer Finance Protection Agency, Warren’s role has been diminished to that of special assistant to the president and adviser to Treasury Secretary Tim Geithner.
An LA Times article on 15 September states:
President Obama, sidestepping a possibly heated confirmation battle, will appoint Harvard law professor Elizabeth Warren as a special advisor to the Treasury Department to launch the government’s powerful new Consumer Financial Protection Bureau, according to two Democratic officials familiar with the decision.
An interim appointment would have given the no-nonsense Warren the full authority to structure consumer bureau in the interests of the people. A special adviser role is defined in a New York Times article on 15 September as follows:
Ms. Warren will be named an assistant to the president, a designation that is held by senior White House staff members, including Rahm Emanuel, the chief of staff.
She will also be a special adviser to the Treasury secretary, Timothy F. Geithner, and report jointly to both men.
The title of the Times article says it all: “Warren to Unofficially Lead Consumer Agency.”
Of course, President Obama could have set it up for Warren to officially lead the agency through an interim appointment. Warren’s outstanding efforts and her extraordinary record of being right on the issues are more than enough justification for that.
Even better, the president could have submitted the nomination to the Senate for approval and dared any or all members of that body to challenge Warren. Her record of written and live presentations has been excellent. Why should we believe the storyline that confirmation is out of the question? It’s probably just more corporate media stenography dictated by White House operatives who opposed the appointment from the start.
But here’s the kicker. Ryan Grim, in an article on 14 September, wrote that the soon-to-be retired Chris Dodd (D-CT) warned that the consumer agency might implode if Warren received an interim appointment:
Outgoing Senator Chris Dodd (D-Conn.) warned Tuesday that an interim appointment of Elizabeth Warren to head the Consumer Financial Protection Bureau ‘jeopardizes the existence’ of the nascent agency.
That would be the same Sen. Dodd who crafted a financial reform bill that had a highly favorable impact on a financial services firm that employs his wife.
So there you have it. The chairman of the Senate Finance Committee who got a deal we’d never get on a mortgage from a big bank and who authored a self-serving financial reform bill is determining who will protect citizens against the rapacious greed of the financial services industry. Telling, isn’t it?
How will Warren be treated by “co-boss” Geithner?
Here’s an excerpt from Warren’s questioning of her new boss at an oversight hearing on the AIG bailout. She wanted to know why AIG counterparties (mainly large financial institutions) got 100 cents on the dollar while investors in other bailed out entities got much less. Specifically, she wanted Geithner to tell her if he’d had conversations with any of the beneficiaries of the sweet AIG deal. Here’s a key portion of the exchange beginning at 1:44: .
Geithner: Where are you going. What would you like to know?
Warren: Did treasury have conversations with any of the counterparties…
Geithner: I was not Secretary of Treasury but I was president of the New York Fed and, of course, I was central to the basic judgment we reached together to prevent default by AIG. I’m sure that was the right judgment at the time and you’re right to point out that that action did help make the system more stable, did have broad benefits to the stability of the system, including the direct counterparties.
Geithner refused to answer the question about conversations with those who would benefit from the AIG deal. He looks like a horse’s ass, and he got beaten up in the press as a result of that encounter. Yet we’re expected to believe that the Treasury Secretary will be supportive of Warren’s efforts to institute real consumer protection from the same industry that Geither protects so fiercely.
A bit later in the hearing — starting at 4:07 — Warren had Geithner so flustered, he clearly alluded to the foreign banks that got 100 cents on the dollar from the AIG bailout. They are the “people abroad” whom he’s so reluctant to mention or acknowledge meeting.
“By preventing default we helped AIG meet its financial obligations, not just to people abroad, insurance protection, savings protection products, but to its broad counterparties.” (Author’s emphasis)1
Warren has been challenging Geithner and the socialism for the rich program known as the bailout from her first days as chair of the Congressional Oversight Panel monitoring the bailout. Now we’re expected to believe that she will be given real authority to advocate for the people in an unofficial capacity while reporting to Geithner, as well as President Obama. We are asked, further, to believe that Obama couldn’t get the nomination approved by the Senate and that he couldn’t appoint her as the consumer bureau’s interim director.
The people know a fraud when they see it. This one is in sharp relief against the background of the great wealth transfer program from just about everybody to the self-selected few who own the controlling interest in the executive, legislative, and judicial branches of our government.
The Democratic Party as “The Cooler”
We’ve entered an extraordinary era in U.S. politics. The financial and power elite are now in a no lose situation. The Republicans are in full lock step with the rigged game for the super rich. This includes relentless anti-union activities; the continuation of the same Wall Street practices that toppled the financial system; a failure to relieve people losing retirements, homes, etc.; and an economy dependent on wars of any type. Despite their numerical superiority in the Senate, the Democrats claim that they just can’t get anything passed without 60 votes, no way around it. That, of course, is fiction. The end result is stasis, the status quo, and the continuation of failed policies with a few cosmetic changes on the margins.
Rather than acting like a real opposition party, the Democrats enable the worst excesses of the Republican era of greed by their failure to undo those excesses. They pawn tepid “reform” and then run to their corner begging for mercy from the people who elected them to bring real change and some degree of social justice.
In the case of Warren, a fake drama was created whereby the White House could get credit for appointing Warren for full Senate approval while snatching back both that appointment and an interim slot; all in the name of political necessity. Whose necessity? Who benefits?
All involved in this destructive drama should be ashamed. But they won’t. They don’t care because they don’t have to care. They’re above the law and the real world consequences of a truly open political system.
Chalk it up as another big triumph of The Money Party.