The Wall Street Journal dropped a bit of a bombshell yesterday when it intimated that the reason the Obama Administration hasn’t been able to choose a director of the Consumer Financial Protection Bureau is that their preferred candidates don’t want the job over Elizabeth Warren:
White House officials seeking someone to run the Consumer Financial Protection Bureau have so far failed to find a nominee, with several candidates rebuffing the administration’s overtures, according to people familiar with the process.
One concern of some: That accepting would undercut Elizabeth Warren, the Harvard law professor and consumer advocate who is currently a special adviser to the president charged with setting up the bureau. She remains a hugely popular figure among many Democrats and anathema to many Republicans [...]
That deadline could result in the White House nominating Ms. Warren, now a special adviser to the president charged with setting up the bureau. She is believed to want the job but her candidacy likely would trigger a Senate confirmation battle. President Barack Obama could avoid that fight by appointing her during a congressional recess before July 21.
The White House has unsuccessfully reached out to possible nominees, including Democratic former Michigan Gov. Jennifer Granholm, Democratic former Delaware Sen. Ted Kaufman and attorneys general from Iowa, Illinois and Massachusetts, these people said. Among those under consideration for the post include Democratic former Ohio Gov. Ted Strickland and Federal Reserve Board member Sarah Bloom Raskin.
The White House is coming up against the rare instance of an individual with their own competing power base in the Democratic Party. Democrats like Granholm and Kaufman don’t want to cross her because they genuinely believe she’s the best person for the job. Granholm said so publicly. So has Ted Strickland: “My personal feeling is that Elizabeth Warren should have that position.” The other concern for politicians who may want another job in the future is that the Democratic base, who admires Warren, will be unrelenting on what amounts to a scab taking her job. Furthermore, Raskin, who just got to the Fed, almost certainly won’t get the job, and create another vacancy on the Board of Governors.
What’s more, the White House is stuck. They can’t find anyone to take the job ahead of Warren, and the deadline for a director is rapidly approaching. By July 21, someone needs to be in that position, or else the agency forfeits powers over non-bank financial institutions until a director is in place. You may say that’s the point, that the Administration doesn’t want a strong CFPB, but if that were the case, they could have relieved themselves of this hassle altogether by simply not putting the agency into Dodd-Frank. CFPB is part of the Obama brand, the one place where he can boast of helping consumers over Wall Street, and by all accounts, he wanted the agency built over some objections from his economic team.
It’s impossible at this point to get any director, Warren or otherwise, nominated and confirmed to CFPB in three months. A recess appointment will almost certainly be required. So the idea of avoiding a confirmation battle is a moot point: it’s going to be avoided. So the strikes against Warren have been negated, and what’s more, nobody wants to step in front of her.
Some believe that there’s no chance this scenario gets implemented. Yves Smith’s case is as follows:
1) Obama is moving to the right for re-election. Mostly true, but Obama is mainly moving to a position that he thinks will appeal to voters. The appointment of Warren doesn’t contradict that at all. She’s a telegenic presence and generally seen as an admirable figure. This would appeal to base voters without alienating independents, much like the stated policies (at least rhetorically) of taxing the rich and protecting Medicare that came out yesterday.
2) Tim Geithner would never allow it. In a fight between the economic policy types and the political types, the political types have won on several fronts. They artificially lowered the stimulus because they didn’t want to spook the country with a bigger number. They have so far kept Geithner et al away from Social Security. I could see the political team thinking that Warren is a good hire with “good optics,” and overruling Geithner. Furthermore, the consolation prize for Geithner is that this would get Warren out of Treasury as a special counsel and as a special assistant to the President. Geithner could more easily freeze Warren out of economic meetings. Warren would be involved in arguably less decisions at CFPB, though obviously she’d have concentrated power over consumer protection, which differs from Geithner’s apparent core mission to protect the banks at all costs.
It’s probable that the President tried to neutralize Warren by putting her in this special assistant position, but Warren is confounding everyone again with her internal bureaucratic skills. Once she got in the Administration, it appears to be much harder to get her out.




45 Comments

Support this site!
Subscribe to the newsletter
Advertise on Firedoglake
Send
us your tips
Make us your homepage
About FDL News Desk
Maybe no one wants it because it’s an impossible job: taking on powerful interests while working for a president who really doesn’t want those fights.
I still don’t believe for a second that he’ll nominate Warren.
Unless these past few months they’ve been able to corrupt her too.
Good!
Ding!
She’s obviously the best candidate for a job that O does not want done. Looks like POTUS has beat himself at eleventy-dimenional chess.
So glad that Obama finds himself in this situation. Makes me laugh.
She can help consumers more as an insider — as part of the 2012 campaign. /s
Well well well. Interesting developments.
Need to borrow a comma or two? :-)
Imagine Obama wants the least effective people’s advocate possible. Must be an immensely frustrating position for any normal person.
I don’t think anyone who has a political career wants a job with a one term administration?
How much do you think one of the TBTF banks would pay her to come aboard as their consumer expert?
That’s the part that’s always been a mystery to me. Who would want to buck the economic policy scumbags in the administration or get tarred by association.
I know we’ve gone over & over possible motivations, and don’t wish to reprise that discussion, just to indicate that after all the discussion it’s still a mystery to me.
Obama, Daley and Geithner will opt for Warren – especially as no one with remotely comparable “optics” seems willing to take it from her – only if they think they can corral her from “spooking” the banks. That would, of course, prohibit her from doing her job. Ms. Warren might let them think she’ll play ball, but she wouldn’t be Ms. Warren if she didn’t have a consumer-oriented Plan B up her sleeve.
TBTF banks spook themselves; all their CFO’s need to do is frankly look at their own balance sheets. They are dependent on their punitive business models for the cash flow they need to pretend to be solvent.
The first thing Ms. Warren would do is attack those punitive, rabidly anti-consumer fees and payment processing models. That would take many tens of billions of dollars per year out of bank pockets and put them back in the pockets of their customers. They, of course, would immediately spend those dollars, increasing demand for goods and services and the jobs needed to provide them. A win-win for consumers and the economy, paid for by enforcing consumer laws.
TBTF banks would scream bloody murder; the White House would hear them loud and clear, Mr. Daley loudest of all. Sadly, Mr. Obama does not consider consumer interests, regardless of the number of votes they represent, to be “mainstream” when in opposition to bank and large corporate employers (they are always in opposition with bank and large corporate employer interests).
I don’t know about the other but Lisa Madigan our AG in Illinois has plenty of Cred the thing is she won’t take a job as a figurehead which is what I am sure Obama wants.
Also She has a career in politics a future nobody who has a future especially if they are on the Left wants on with Obama now.
Obama needs a tired reformer who has given up wants a nice job and title and to retire with a few extra tax free offshore accounts.
In other words Obama needs a ringer. Since Obama is dishonest he naturally assumes that deep down everyone is dishonest thats why he is wasting time asking Lisa Madigan.
http://en.wikipedia.org/wiki/Lisa_Madigan
Obama since he can’t believe that not everyone has a price must now be thinking that nobody wants in with him because his poll numbers suck that much and nobody wants to be photographed with him.
Bwahahaha! Paranoid Machiavelli wanna bees define themselves on what others think of them and their power over others if Obama can’t get anyone for a job then his power his popularity according to his own logic is imaginary.
The average job-span in recent administrations is only about 15 months or so for lower level cabinet positions, right?
I don’t know about the other
should read
I don’t know about the others
sorry
Not sure but who wants Obama WH on their resume now if they have a political future?
She wouldn’t take it; that’s the difference between her and the banksters and courtiers like Geithner. It’s not about the money or raw power. It’s about fairness, proportion, the law; it’s about power exercised for a public good. That’s something the Pillagers, the inside the Beltwayers, could never understand.
It’s pretty clear with Obama’s track record that agency figureheads are all he’s interested in, especially with Daley as COS. Even Eric Holder found that out. If you’re not ex-Goldman Sachs, Obama’s is not a friendly administration to work for. Being a liberal or progressive in his administration would be like swimming in set Jello.
A good Pol can spot and get rid of rats in their office and get it working.
I’ve seen good managers come into a McDonalds and turn a whole store around all it takes is personal examples of working with the workers just as hard as the workers, attention to detail, and a vision of shared rewards if they succeed an enemy to focus on also helps.
What does she have to lose? What’s the down side for her? You mean to tell me you don’t want to have a go at those scumbags yourself? Not everyone is going to be tarred by association with Obama.
Look at Rahm. He got out when the going was good. Think he is tarnished by Obama? Nah, other way around. Hillary already signaled she wants out. Imagine the smart ones avoid becoming roadkill. But for some, maybe Obama can’t tarnish them because they are truth tellers rather than team player lackey types going down with any ship, survivor types?
Obama’s still sitting pretty anyway. It’s the people who have him under a lens that are seeing the cracks.
At this point there wouldn’t seem to be any doubt about her ability to do the job.
Shared rewards is a mindset fast disappearing from the American business model. Too bad. It’s one of the great motivators in business and in life generally. It makes you eager to get to work and do a good job rather than sulk in and put up with a boss who kisses up and tinkles down.
The ones you mention who got out are tarred by themselves, by their own behavior. Just bc they are still living high on the hog is a testimony to how corrupt the U.S. pols are.
So far Warren seems of a different ilk.
Some People if they are good at a a thankless job can’t help themselves McDonalds Manger surely must be as thankless as CFPB under Obama.
You worked on a farm in Waterford Wisconsin last summer too!
Worked down the hall from Barack Obama too.
Yep, I like Warren too. I think she is a truth teller and can’t be tarnished by this President.
Yves Smith thinks Warren will get the nod over Tim Geithner’s dead body.
That’s based on Obama’s moving further right to win re-election
asfor the Gipper, and because Geithner’s influence spreads much farther than an ordinary Treasury Sec’y. I think the latter is true not because of his commanding personality; he hasn’t got one. It’s because he is obviously the water boy for Goldman Sachs and the TBTF banks. Smith thinks Team Obama will simply take more time, regardless of pressure, and cast its net wider:Obama is an Illinois Pol all the corrupt Daley Machine and GOP pols want her out. Maybe she won’t take the job because she fears being a figure head with no real power but why offer her the job?
Wait I got it Illinois Dems and GOP want her gone. Just like they both wanted Fitz gone.
This is more Kabuki Theater brought to you by the Federal Reserve and Koch Whore Obama. Warren could have been appointed anytime. The eleven dimensional cowards in the White House never wanted Warren She was just another campaign chip to recruit more corporate campaign bribes from Corporations.
Warren has served that purpose and is no longer needed. It is now time for corporate raiders to steal as much as they can and Warren presents a roadblock to that. Warren will never be appointed to anything. Only Disaster Capitalists need apply.
As you may have noticed Barack Obama, and the Chicago School of Fascist Economics, just gave us extra helping of Shock Doctrine, with more on the way.
If July 21 is the drop dead date, there’s plenty of time to cast a larger net.
With all due respect, it is delusional to think that the person appointed to the CFPB position will have the power to “have a go at those scumbags.” He/she will be neutered by those scumbags — as Barry watches.
Thats how contracts are decided in Chicago the bid is fixed so only the connected firm a minority firm with secret White majority owners get the contract. I have to agree with Yves take.
Thats why no true reformer like Lisa has taken the job Obama needs someone with Cred to replace Warren for the figurehead job. So far no real person with Cred thinks they will be anything but a figurehead.
Why Warren thinks she is different is either ego or she is that good.
And Warren will support the nominee.
Agreed. Imagine that you could be in the same room to question or counter bad advice to whatever extent Obama allows it though.
Arguably, that’s the position she’s in now, no?
Good leaders can attract good people and know good people I was brought in to a Mcdonalds once by a new Manager to help turn around a bad store.
I assume Geithner knows Warren can do the same. People like Lisa might know lawyers who understand and hate Chicago and Illinois corruption but they don’t know anyone who can help them understand what the CFPB does.
It is NOT a fight between “economic policy types and the political types.” It’s a fight between Wall Street types and the political types.”
One of my early jobs in economics was at Citibank, the economics dept of which at that time (early 70s) was dominated by monetarists. Complete junk and I knew it. I was too junior to call them on it, but even if I’d been senior enough, life was too short. Too short in the sense of filling my time more productively. People like that are relentless, and the stakes in the WH are ideological, political and financial. IMO, no one in their right mind would want to spend more that a day in their presence.
I will say this, the amount of authority granted to the CFPB Directorship is absurd, but not only is the bureau exempt from the congressional appropriations process (its funded by the Fed from money, well out of the aether), the director has pretty vast rulemaking powers (and if the administration tries to override those rules, she can go to court to challenge the override). The President can’t fire her before her term is up, end of next year if a recess appt, except for cause which basically requires an FBI video showing public corruption. Oh yeah, and the Bureau IS the US government when it comes to enforcing its orders in court.
I can see why the banks are terrified of her. She can write tough, specific consumer protection regulations and hold their feet to the fire in court. I can tell you right now where Warren is going to hammer them. The director has the power to ask banks and other covered parties to report any information she thinks is relevant to consumer protection. That’s the key, you audit the reports not the activity.
That was the big lesson that lawyers for the Office of Price Administration learned during WWII. Once you prove a reporting violation (much easier task than proving an actual regulatory violation), you harness the kingly sword of equity.
Relief under this section may include, without limitation
(A) rescission or reformation of contracts;
(B) refund of moneys or return of real property;
(C) restitution;
(D) disgorgement or compensation for unjust enrichment
…
(G) limits on the activities or functions of the person;
http://www.dodd-frank-act.us/Dodd_Frank_Act_Text_Section_1055.html
With the right judge (none of those remedies require a jury), she could drag mortgage lenders or anyone else into court on reporting violations and walk out with… well, the sky’s the limit (cough* principal reductions). Yeah, Geithner and his crew must be freaking that the President is being backed into having to pick Warren. This is like DEA agents showing up at a cocaine orgy, not cool. :o)
I have the highest respect for Elizabeth Warren. She’s no political hack. The last thing motivating her is the impact this might have on her career when Obama is voted out of office. She will bring credit to him; he can’t tarnish her.
I think she thinks she can do the job… whether Obama wants it done or not.