If you read only one article this year to understand the Wall Street/Washington Axis of Evil, it should be Vanity Fair's The Woman Who Knew Too Much. Among those who have spoken up in the last three years about the gross economic inequities that dominate American society, Elizabeth Warren has been the most effective. Unfortunately for us, "effective" doesn't mean much in this context.
I am tempted to simply reprint the entire article, but it is very long and I don't have the required permission. It is all right there for you to read. No subscription required.
The Consumer Financial Protection Bureau (C.F.P.B.) is Warren's brainchild. Wall Street plutocrats and those Inside the Beltway who carry water for them—mostly, but not exclusively Republicans—hate the C.F.P.B. more than any other aspect of the considerably watered down Dodd-Frank financial "reform" law. (Well, they're not crazy about regulating OTC derivatives either.) It's always best to follow the money.
When the C.F.P.B. was first proposed to Congress, in early 2009, the Chamber of Commerce, the leading business lobbying group in the country, announced that it would “spend whatever it takes” to defeat the agency. According to the Center for Public Integrity, from 2009 through the beginning of 2010, it would be one of the biggest spenders among the more than 850 businesses and trade groups that together paid lobbyists $1.3 billion to fight financial reform.
Although a Gallup poll in the fall of 2010 would show that 61 percent of Americans supported Dodd-Frank—which was designed to curb the risky bank activities that triggered the 2008 meltdown and the ensuing recession—the financial establishment would continue to attack it even after it became law on July 21, 2010.
According to the Center for Responsive Politics, in 2010 the financial industry flooded Congress with 2,565 lobbyists. They were financed by the likes of the Financial Services Roundtable, which, according to the Center, paid lobbyists $7.5 million, and is on its way to spending as much or more this year. The Chamber of Commerce spent $132 million on lobbying Washington in 2010. The American Bankers Association spent $7.8 million. As for individual banks: JPMorgan Chase, which received $25 billion in TARP funds from taxpayers, spent nearly $14 million on lobbying during the 2009–10 election cycle; Goldman Sachs, which received more than $10 billion from taxpayers, spent $7.4 million; Citigroup, which was teetering on the brink of insolvency and received a $45 billion infusion, has paid more than $14 million to lobbyists since 2009. And none of this money includes the direct campaign donations these organizations, and their surrogates, made to members of Congress.
The banks “do not like to lose,” says Ed Mierzwinski, of the National Association of State Public Interest Research Groups, which was part of the grossly outmatched consumer coalition that managed to scrape together a paltry $2 million to lobby in favor of reform.
While Wall Street and the banks oppose virtually every aspect of Dodd-Frank—from the new rules on derivatives to higher capital requirements—the C.F.P.B. would become among the most controversial aspects of the reforms, the banking industry’s particular bête noire...
Warren knows all about the Empire's Decline, but she doesn't call it an Empire and being a public figure, can't (or won't) acknowledge its irreversible Decline. Her standard speech closely resembles many of my DOTE posts taken altogether.
In speeches, sometimes using slides filled with numbers and graphs, she would, as she did at a speech in Manhattan in early June, outline the impact on middle-class Americans of rising health-care costs, burgeoning debt, and the depletion of not only their savings but also, with the rise in joblessness, their confidence.
She spoke of “the Wild West” conditions deregulation had created, where banks could sell virtually any product they wanted, on any terms: mortgages they knew consumers could not pay off, credit cards whose rates they could raise at whim, products that came with a mind-boggling array of penalty fees, many of them not fully disclosed. But it was her final remarks that brought down the standing-room-only house in June. “We cannot run our country without a strong middle class. We cannot run a democracy without a strong middle class,” she said, her voice quavering slightly. “If we hollow out the middle class,” she said, “then the country we know is gone.”
But while audiences applauded her, Warren’s opponents lacerated her. She was called incompetent, power-hungry, ignorant, a media whore, and, in a widely televised moment, a liar, by a Republican congressman during a hearing in May.
“It was like she was the Antichrist,” says Roger Beverage, the president of the Oklahoma Bankers Association and one of the few bankers who publicly supported her. She had become the lightning rod for the opposition to the C.F.P.B.
That bluntness was evident in an interview even in late May, when Warren, who learned only in July that she wouldn’t get the job, still believed that Obama might ask her to run the C.F.P.B. “It’s money and power, the only two things we are talking about here,” she said, speaking of the people who were trying to kill the C.F.P.B. “in the back alleys,” as she put it. “There are many who are rich and powerful who say the system works fine as it is,” she continued. “America had been a boom-and-bust economy going into the Great Depression—just over and over and over, fortunes were wiped out, ordinary families were crushed under it. Coming out of the Great Depression we said, We can build a structure that makes us all safer. And notice, it’s from the end of the Great Depression to the 1980s that we built America’s middle class. That’s when we got stronger as a country. That’s when that big, solid, boring, hardworking, play-by-the-rules group in the middle emerged and defined what America was. You still had the ability to become a billionaire, but the center stayed strong and, notice, provided opportunity for growth, opportunity for getting ahead, opportunity that your kids were going to do better than you did. That was what defined America. And then we started, inch by inch, pulling the threads out of that regulatory fabric, starting in the 1980s.”
Hopey-Changey dumped Warren the Anti-Christ, nominating Richard Cordray, the former attorney general of Ohio, who Warren hired, to head the Consumer Financial Protection Bureau. Although Obama cited the impossibility of getting her confirmed, he dumped her to get back in Wall Street's good graces. (Follow the money.) Timmy Geithner hates her, in large part because she eviscerated him in public about where some of the bail-out money ended up. Hope-For-A-Change's new chief of staff, William Daley, formerly a vice-president at JPMorgan Chase, has never supported a consumer protection bureau.
By April, however, Warren’s standing in the White House was shaky. Three months earlier, in what was seen as an attempt to “repair” his relationship with his Wall Street donors, Obama had brought in William Daley as his new chief of staff. A former banker at JPMorgan Chase, Daley came into the administration just as senior Obama adviser David Axelrod left. But while Axelrod and another top adviser, Valerie Jarrett, were perceived as strong Warren supporters, Daley had reportedly opposed the creation of the C.F.P.B.
A spokesperson for the White House said that, although Daley was “not recused from” discussions about the C.F.P.B., he chose “not to participate in the process of selecting a nominee for C.F.P.B. director.” Which is possible. But with Daley and Geithner—one of Obama’s closest advisers—sharing center stage, the balance of power in the debate over Warren shifted. Geithner would never criticize Warren publicly—and indeed, as a Treasury spokesperson says, he “has expressed his support and admiration for Professor Warren many times”—but few people in Washington doubted that he remained opposed to her candidacy. To at least one person who saw them in meetings together it appeared that “he looked down on her for no apparent or justifiable reason.” As for Warren, if one mentions the video “Elizabeth Warren Makes Timmy Geithner Squirm,” she says nothing, but an impish smile crosses her face [video below].
Warren is now running for Senate in Massachusetts against Scott Brown. If she wins, and there's no guarantee of that given the enormous financial resources that will be throw around to defeat her, she will at best become buried in the Senate, just another its 100 members. On the other hand, if she had chosen to run as an independent candidate for President, and had gotten sufficient public support, which likely would have happened, she would have had an opportunity in every public debate to talk about America's decline in a way working or unemployed Americans could relate to. She would never have won such an election of course—the two-party arrangement is entrenched, the system rigged—but she could have raised the awareness of millions of Americans in a way I'll never achieve on this blog.
I admire Elizabeth Warren. It is truly unfortunate that she has chosen to play the game within our unalterable, corrupt political system instead throwing stones at it from the outside.
Bonus Video — Elizabeth Warren Makes Timmy Geithner Squirm