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Simon Johnson

Simon Johnson

Posted: September 9, 2010 10:31 PM

President Obama is finally looking for bold, creative and clever ways to change the way the US economy operates -- preferably with measures that will take effect by the November midterms and change the tone of the broader political debate. His tax proposals this week have some symbolic value, but in the broader sense all of these fiscal suggestions are tinkering at the margins.

What could he possibly do that would grab people's attention, mobilize his political base and put his opponents on the defensive? There is an easy answer: Appoint Elizabeth Warren to start running the Consumer Financial Protection Bureau (CFPB) immediately.

And the brilliant part of this idea -- as explained by Shahien Nasiripour at the Huffington Post (see also David Dayen's Thursday coverage) -- is that the Dodd-Frank financial reform legislation allows the person charged with setting up this new agency to be an outright appointment, rather than a nomination subject to Senate confirmation.

Warren's credentials are impeccable -- she came up with the original idea for the CFPB, she pushed effectively for it to become legislation and she has proved most effective in her oversight role as chair of the Congressional Oversight Panel (COP) for the Troubled Asset Relief Program. And her manifesto for the CFPB is sensible and actually pro-business -- although she naturally opposes the specific ways in which big banks mistreat people.

No doubt Republicans in the Senate would try to derail her nomination to head the CFPB as they have done with numerous other nominations over the past year and a half. Their motivation would not be her views or expertise -- she has earned serious Republican respect as a result of her COP role -- but just part of their electoral strategy to block the president's agenda and to undermine an agency they have consistently opposed.

The Treasury Secretary is explicitly authorized by an Act of Congress to pick an interim head for the new agency -- with a view to getting it up and running immediately (in fact, what has he been waiting for?). Presumably the Senate (and the House) passed this specific measure expressly to expedite the CFPB's work.

Professor Warren has strong political support and would get the new agency off to a great start. She would represent the Obama administration's serious attempt to rein in financial misbehavior, at the same time as keeping the economic recovery on track. Anyone who thinks she would be bad for American families has not been paying close attention. And best of all, she is very good at explaining what she is doing and why that makes sense.

The president needs clearer messages and stronger substance -- and he needs them fast. He should move at once to appoint Elizabeth Warren.

 
 
 
 
 
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HUFFPOST SUPER USER
mjc
Avoid printing any..
04:04 PM on 09/13/2010
There is absolutely no excuse left for Obama for not appointing Elizabeth Warren. He needs to boost his courage and appoint her or force Tim Geithner to do so. There is no way that any progressive, liberal, or independent is going to have anything to do with Obama unless he does so.
01:33 AM on 09/13/2010
To all of you Democrats and Progressivest so negative about Obama, think about the following before bashing Obama the time.

1. He inherited 30 years of Republican messaging that has brainwashed much of the country into believing that government is the problem and giant corporations have the same interests as your neighborhood small business owner.
2. The economic meltdown caused by that kind of economic thinking. (All, of course, brought to you by William F....ing Buckley and his even more sociopathetic heirs, originally sold to us by Reagan's face, Milton Friedman's economics, and initialized by our good friend, Rumsfeld)
3. A Democratic Party severely divided because of Clinton's embrace of the DLC and his belief that the country was further to the right than it really was causing a prophetic self-fulfillment).
4. A Democratic Party that could have moved this country radically left after 8 years of Bush, due mainly to the economic meltdown at the end of his Administration, but also because of the two wars he brought us willingly into. (Just an aside observation regarding Bush. Don't believe for a second that he was inept. Understanding his presidency is simply understanding that he was the natural payoff of the Reagan vision).

Contd --
HUFFPOST SUPER USER
mjc
Avoid printing any..
04:01 PM on 09/13/2010
No radical left move at all. Elizabeth Warren needs to be appointed to this position, one which she imagined and developed. This will be the first real step in controlling our financial interests and one that is very much in need of regulatory monitoring. Not left at all. Don't know where you were in the 1990s but there was a president, not Republican or even a Reagan fan...as perhaps Obama is, Bill Clinton. Clinton was not a "believer" in the concept of government as the problem. His "embrace" of the DLC had nothing to do with division of the Democratic Party, if there was any of significance, and certainly Clinton's relationship with Congress made him firmly aware of just how far Republicans would go to take over our government. Clinton wasn't the ideologue: Newt Gingrich was and is. As for George Bush, maybe you missed some of that term as well. Reagan's vision could be best be described as the "PLAN" that his wife saw in the stars and transmitted to Ronnie.
11:09 PM on 09/12/2010
Come on Mr. President as Nike says...JUST DO IT!
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HUFFPOST SUPER USER
tombaan
Live and let live
09:55 PM on 09/12/2010
I wish Obama would for once take charge and not try to compromise and build bridges to an opposition which is only interested in putting him down
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HUFFPOST SUPER USER
rory talbot
Former Dem but they r now wing of Corp. party
08:43 PM on 09/12/2010
Sleep well, GOP. Obama will NEVER do appoint Warren. Zzzzzzz.....!!!!!
08:33 PM on 09/12/2010
one must question obama's commitment to this consumer protection function. The appt delay is both unfathomable and inexcusable. I should have voted for clinton
08:58 PM on 09/12/2010
Don't you realize that the whole Obama presidency until now has been one giant Clinton footprint? Look at who he surrounded himself with after he was elected, Raum, Larry Summers, et al. Don't you think after Hillary almost destroyed the Democratic party and Obama's chances of winning against McCain, that Obama was most likely forced into a devil's bargain with the Clintons in order to get her to help re-unite the party and support him in the election.

Sure, she helped him win; but behind closed doors she got a lot more than the Secretary of State position and some campaign money assistance; she got him to commit to hiring a lot of Clinton cronies. Keep that in mind when you condemn Obama or consider the idea that Clinton would have been a more liberal or progressive president.

If her husband's administration offers any clues, it is her presence and the influence of the Clintonites in his administration more than anything else that has made Obama seem like Republican-Lite until now. Remeber, it was the DLC and Clinton that moved the Democrats to the right of Nixon in the 90s and it is going to take Obama a lot of time and support to cast off the Clinton demons.
04:06 PM on 09/13/2010
"Hillary got Obama to commit to hiring a lot of Clinton cronies"

Glad to hear a liberal finally admit that Obama is a phony sellout.

Too bad you all didn't figure this our BEFORE the election.

"Healthcare is a right... that's why were forcing all Americans to purchase it or be fined."

SUCKERS!
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07:06 PM on 09/12/2010
I have said the same thing on this site many times. I'm so disappointed in Obama but appointing E.W. to head up the CFPB would go a long ways towards supporting Obama once again in 2012. Actually, if she isn't appointed there is no chance of me voting for Obama in 2012.
07:44 PM on 09/12/2010
Why does this position matter so much to you?

The odds she makes a significant difference is tiny.
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HUFFPOST SUPER USER
Harlem-bred
These r not the droids ur looking for..
09:09 PM on 09/12/2010
I agree with 13addog, ... it's the principle of the matter.
06:54 PM on 09/12/2010
Sorry Mr. Johnson, she's great and should have been nominated a long time ago.

But, I've had it with Obama. We Progressives do not need another wasted four years with this happy speech giver.

It would have been one thing if a promise here or there had been broken but too many have passed us by and he's to blame!

Time for Progressives to move beyond the Democrats.

They are nothing more than Republican-lite and care little for us...
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HUFFPOST SUPER USER
BillForObama
Hail to the Chief! HAIL, he is the Chief!!!
10:06 PM on 09/12/2010
Go ahead and vote Republican. Cut off your nose to spite your face.
HUFFPOST SUPER USER
mjc
Avoid printing any..
05:25 PM on 09/13/2010
There has to be an alternative. No, you're right. There isn't a single Republican...alive...that I would consider voting for, much less working for. I think Obama just picked the wrong party when he decided to go into politics, or maybe in Illinois there isn't much of a difference. Lots of very liberal types believe that there really isn't much of a difference but looking back on the first two years of Obama's administration..., so dismal. There could have been many really left, liberal, progressive pieces of legislation passed but didn't happen. FISA should have been a clue, but his long, drawn out health care reform came down to damn little reform, except he seemed to want to cut costs of medicare and medicaid. Those are Republican concepts.
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HUFFPOST SUPER USER
John Ison
Marketing and Merchandising Expert
07:18 AM on 09/13/2010
And your realistic alternative is what - who?
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09:45 PM on 09/15/2010
This progressive COULD vote for Ron Paul NOT Rand Paul, that looney tea bagger!
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HUFFPOST SUPER USER
LynnW49
"A great democracy must be progressive." TR
05:11 PM on 09/12/2010
Just for the record, I made a comment asking about the merits of an interim appointment versus a recess appointment, a comment that was
1. absolutely free of cuss words or their coded equivalents
2. rational
3. smear-free

and it got moderated into oblivion. I wonder if this one will make it because it has the word moderator in it. I have to wonder about why all of the really hideous comments containing every slur imaginable make it, when a reasonable one does not.
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HUFFPOST SUPER USER
LynnW49
"A great democracy must be progressive." TR
06:04 PM on 09/12/2010
Okay. I see the original did finally get posted. But it took about twenty minutes. Perhaps things are just slow and not over-mod'd.
08:24 PM on 09/12/2010
Simple. Say something ugly about 2 yr old Trig Palin, and they'll fan you.

Say something ugly about some sacred lefty (each moderator has their own list) and they'll consign your comment to the ether.

They want to PRETEND it's a dialogue, but people around here flag things they merely disagree with. But it's their sandbox, and the APPEARANCE of debate is actually far more useful to their purpose than GENUINE debate would be.
HUFFPOST SUPER USER
mjc
Avoid printing any..
05:40 PM on 09/13/2010
Can't really agree. I always copy my comments because the so-called moderators are very hesitant to have anyone really criticize Obama or Israel. Try my technique: copy everything.
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05:04 PM on 09/12/2010
dems are gaining momentum toward november....really boost it by getting beth in there....
04:59 PM on 09/12/2010
Give me a break, the Consumer Financial Protection Bureau isn't going to have enough power to give anyone a nightmare . . .
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06:54 PM on 09/12/2010
Correct, VQ.

They'll bury her in irrelevant paperwork and if she gets uppity they'll marginalize and discredit her until she gets disgusted and decides to "spend more time with her family."
Should Tim and Ben have any difficulty figuring out how this is done they need only quiz Summers on how he got rid of the incredibly annoying Brooksley Born.

What a handy coincidence for them that old Larry just happens to be nearby.

http://www.pbs.org/wgbh/pages/frontline/warning/
HUFFPOST SUPER USER
Michael Ives
04:39 PM on 09/12/2010
Is she going to dismantle to private federal reserve? No? Well, she is not really nightmare to the big banking elite is she? Considering the FED cartel banking institution will continue to have nightmarish practices and our government is still creating money out of debt. Nothing will change until this problem is fixed.

So, put whoever you want in these whimsical celebratory positions as nothing more than figureheads to be some sort of feel-good crusader for the little guy; that's all they are, illusory champions of the people.

23.7 trillion and counting.
05:41 PM on 09/12/2010
Her appointment may not seem a significant affront to the banks, perhaps for the reasons you've stated, but that was not the point of the headline and article.

The article is talking about the political effect with regard to the November elections and suggests it would harm the Republicans, not the banks.
HUFFPOST SUPER USER
Corvid
06:37 PM on 09/12/2010
I suspect what you say about the built-in ineffectiveness of this bureau is true. However, Warren has shown a willingness to speak bluntly, a quality that's almost unique in Washington. Even if she couldn't effectively clamp down on bad practices, she sure as heck could talk about them. And I suspect she would (though I'm not 100 percent certain about that; she has shown some inclination to be a "team player," and with the Obama team, that's not so good).

In the end though, I hope for a lot more. Obama is clearly another Clintonite, as we can judge from his sorry record. He is not the kind of person we need in the White House to wrestle with the structural overhaul this country needs.

Elizabeth Warren, however, might be just the ticket. Warren in 2012. Who's ready to sign on?
HUFFPOST SUPER USER
edgarcaycedoc
04:35 PM on 09/12/2010
Well, Obama . . . No one could have said it better. What are you waiting for??
05:25 PM on 09/12/2010
That's a question you could ask about a lot of things this administration does...

most likely, he's trying to soothe the hurt feelings of the big banking lobbyists who oppose
her through and through.
04:32 PM on 09/12/2010
I would be very surprised if that isn't already in the plan. Although I don't know how to assess the reprocuss
ions of her "appointment".
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HUFFPOST SUPER USER
LynnW49
"A great democracy must be progressive." TR
04:27 PM on 09/12/2010
"He should move at once to appoint Elizabeth Warren."

If you mean he should tell Geithner to make an interim appointment, then doesn't that have some perils? Couldn't the Republicans make a permanent appointment, canning her and replacing her with a Wall Street sap, if they were to control the White House in 2013?

Seems better to make a recess appointment, a permanent one, and either this week or in October while our elected representaives are taking yet another break from their taxpayer paid employment to campaign (and suck up to corporate lobbyists fulltime). If the Republicans opposed such a popular symbol of support for the middle class, they'd be feeding the Democrats' narrative about Republican = Wall Street.

I guess making an interim appointment would at least get things started, and in Warren's way, but it makes me nervous. It seems to me the President has not made that many recess appointments, and this one is so important and timely that it would not exactly break the bank on his political capital. Not that he has any with Republicans anyway, but it would put capital in the bank with Democrats before the midterms.