One of the better things to come out of the financial reform bill that Robert Reich succinctly described 'a mountain of legislative paper, a molehill of reform' is the establishment of a much needed new Consumer Financial Protection Bureau.
The issue is who will head the Bureau. There is one obvious choice, Elizabeth Warren, a Harvard Law Professor who proposed the idea of the Bureau three years ago and fought tirelessly for its establishment. Warren has constantly called out for better policing of banks and how they treat their retail customers.
In an age where banks care less about their customers than ever before and find myriad ways to squeeze extra money out of consumers, a strong Bureau is the only safeguard.
On the other side is Timothy Geitner, the Treasury Secretary who never met a bank he didn't like to bail out. The problem for the banking industry is that they are still sitting on trillions of dollars of worthless assets that they have yet to write off. If they did so, they would all be nominally bankrupt so they are going to have to take the next decade or so to slowly ease the pain of the write-offs.
It would be so much easier if banks could squeeze those extra profits out of consumers who don't have lobbyists defending their interests. The more money the banks make, the quicker they can write off their huge losses. Elizabeth Warren is the last person Geitner wants running the Bureau because that will spoil his fantasy of being the hero that saved finance.
The Obama administration has been lukewarm to Warren's nomination and has already expressed concern that it will be a battle to get her confirmed. For fuck's sake, if there is a battle worth fighting in today's economic climate, this is the fight. There is no gray area, it's consumers versus the big fat overbonused bankers.
Jason Linkins in the Huffington Post put it best:
You say that Warren's appointment is likely to be very contentious? And draw a lot of opposition? Well I am interested in hearing the other side of that argument! How is that going to do? Will it be, "We are worried that Elizabeth Warren has philosophical opposition to the Wall Street practices that led to the largest economic meltdown in the last half-century?" Or is it going to be more like: "If Elizabeth Warren gets her way, some consumers may end up getting protected?" If it were up to me, this wouldn't be a fight I'd be looking to actively avoid. I'd be looking for a way to drag it out for the next three months. (Unless I missed the part where Americans have suddenly rekindled their love for big banking institutions!)
The other candidate for the position, Michael Barr, gained notoriety for his opposition to reforming the derivatives markets after the economy collapsed.
The decision is a no-brainer but when people who sometimes act as though they have no brains you can't be to hopeful.
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