Republicans Must Really Fear Warren

The brightest light on Obama’s economics team, befouled with the likes of Bernanke and Geithner, has been Elizabeth Warren, appointed to set up her brain child, the Consumer Financial Protection Bureau.  Because that is the best part of the Wall Street reform package passed last year, Republicans are gunning for the CFPB and Warren with passion fueled by millions of Bankster bucks.

In their quest to undo the liberal agenda advanced by a Democratic Congress and president, the Republican-led House has begun nibbling at the edges of the Wall Street reforms President Obama signed into law in July.

Wary of appearing too cozy with Wall Street bankers, who the public still largely blames for the 2007 financial crisis, the GOP has stopped far short of the full repeal of the law, as House Republicans accomplished earlier this year with another Democratic priority, the health care reform law.

Instead, Republicans have introduced five bills aimed at curbing parts of the financial reform law that they say are the most onerous, particularly for small and growing businesses.

House Financial Services Committee Chairman Spencer Bachus last week introduced the first bill, which would dilute the power of the presidentially appointed director of the Consumer Financial Protection Bureau, now run by Elizabeth Warren.

The CFBP was created to set and enforce rules for banks and financial companies that provide "a level playing field" and transparency for consumers investing in financial products. But Republicans think Warren wields far too much power and could impose restrictions that hamper business. They also resent the way Obama gave her the job unofficially, averting a potentially contentious Senate confirmation. Bachus, R-Ala., wants to replace her with a five-member commission.

Bachus said he was introducing the bill "because the CFPB might be the most powerful agency ever created" and he wants to "ensure that a nonpartisan, balanced approach to consumer protection prevails."… [emphasis added]

Inserted from <Washington Examiner>

RepubliSpeak Dictionary – Balanced approach to consumer protection: protecting criminal Banksters from consumers.

While the above article shows Republican attempts to defang regulation, an editorial by Paul Krugman shows how they make their fear of Warren personal.

Last week, at a House hearing on financial institutions and consumer credit, Republicans lined up to grill and attack Elizabeth Warren, the law professor and bankruptcy expert who is in charge of setting up the new Consumer Financial Protection Bureau. Ostensibly, they believed that Ms. Warren had overstepped her legal authority by helping state attorneys general put together a proposed settlement with mortgage servicers, which are charged with a number of abuses.

But the accusations made no sense. Since when is it illegal for a federal official to talk with state officials, giving them the benefit of her expertise? Anyway, everyone knew that the real purpose of the attack on Ms. Warren was to ensure that neither she nor anyone with similar views ends up actually protecting consumers.

And Republicans were clearly also hoping that if they threw enough mud, some of it would stick. For people like Ms. Warren — people who warned that we were heading for a debt crisis before it happened — threaten, by their very existence, attempts by conservatives to sustain their antiregulation dogma. Such people must therefore be demonized, using whatever tools are at hand.

Let me expand on that for a moment. When the 2008 financial crisis struck, many observers — myself included — thought that it would force opponents of financial regulation to rethink their position. After all, conservatives hailed the debt boom of the Bush years as a triumph of free-market finance right up to the moment it turned into a disastrous bust.

But we underestimated the speed and determination with which opponents of regulation would rewrite history. Almost instantly, that free-market boom was retroactively reinterpreted; it became a disaster brought on by, you guessed it, excessive government intervention.

There remained, however, the inconvenient fact that some of those calling for stronger regulation have a track record that gives them a lot of credibility. And few have as much credibility as Ms. Warren.

Household debt doubled as a share of personal income over the 30 years preceding the crisis, and these days high levels of debt are widely seen as a major barrier to recovery. But only a handful of people appreciated the dangers posed by rising debt as the rise was happening. And Ms. Warren was among the foresighted few. More than a decade ago, when politicians of both parties were celebrating the wonders of modern banking and widening access to consumer credit, she was already warning that high debt levels could bring widespread financial disaster in the face of an economic downturn.

Later, she took the lead in pushing for consumer protection as an integral part of financial reform, arguing that many debt problems were created when lenders pushed borrowers into taking on obligations they didn’t understand. And she was right. As the late Edward Gramlich of the Federal Reserve — another unheeded expert, who tried in vain to get Alan Greenspan to rein in predatory lending — asked in 2007, “Why are the most risky loan products sold to the least sophisticated borrowers?” And he continued, “The question answers itself — the least sophisticated borrowers are probably duped into taking these products.”

Given Ms. Warren’s prescience and her role in shaping financial reform legislation — not to mention her effective performance running the Congressional panel exercising oversight over federal financial bailouts — it was only natural that she be appointed to get the new consumer protection agency up and running. And it’s hard to think of anyone better qualified to head the agency once it goes into action.

The fact that she’s so well qualified is, of course, the reason she’s being attacked so fiercely. Nothing could be worse, from the point of view of bankers and the politicians who serve them, than to have consumers protected by someone who knows what she’s doing and has the personal credibility to stand up to pressure… [emphasis added]

Inserted from <NY Times>

Simply put, Republicans govern exclusively for the benefit of the super-rich and criminal corporations, and Banksters are among the richest and most criminal.  Republicans want Banksters free to prey on poor and middle class consumers without restraint. And no wonder they fear Warren.  Here is her opening statement at the hearing.

The only circumstance under which Warren should not continue to head the CFPB, as originally constituted, in my opinion, is if she replaces Timmy Geithner at Treasury.