Congressional Republicans are apparently intent on a big showdown with Elizabeth Warren, who is currently building up the new Consumer Financial Protection Bureau (CFPB).
This is very good news for the White House, if they use this opportunity wisely.
Some Republicans seem to think that Ms. Warren is about "big government" or "intrusive regulation". But this is not the case - Elizabeth Warren's approach is much more appealing and already popular with almost everyone on right and left: Transparency.
Look carefully at Ms. Warren's September speech to the Financial Services Roundtable and think about how this plays as a broader political message.
Her political principle is clear and completely compelling:
...the best way, in my view, to strengthen those middle class families is to find solutions that are deep and lasting, that strengthen the markets, and that will create a robust, competitive consumer credit industry that works for families, not against them.
Her economic approach is also right on target - the market should work for the consumer:
I come to Washington as a genuine believer in markets and a genuine believer that the purpose of regulating the consumer credit market is to make that market work for buyers and sellers alike: a level playing field where the best products at the best prices win. When it works, the market is an ally to consumers. And, when it works, the market rewards those lenders who offer the best value to their customers."
...When I talk about functioning markets, I'm not using the word "market" as coded
language for a return to the Wild West where companies use deception to pick off every consumer they can get in their sites. A free market is one where consumers have the ability to make well‐ informed choices, where the choices are visible and the terms are clear, and where there are cops on the beat to make sure that everyone plays by the same rules.
In other words: stop already with the cheating of people. This is not good for our economy, not good for business as a whole, and definitely not good for American families.
But credit agreements have gotten long and complicated. In fact, there's a new epithet: fine print. I understand that some of you call it "mice type."Where I come from, nobody calls fine print, hidden fees and surprise penalties "negotiated contract terms" or "innovations." On a polite day, my brothers in Oklahoma call that kind of stuff "garbage."
This is the specific deliverable: Get rid of the fine print.
An AARP poll earlier this year showed that 96 percent of Americans over 50 surveyed want to put an end to the fine print in their credit agreements. Just in case you missed the point, 91 percent felt strongly about that. 96 percent? These are your customers.
And they vote. This is exactly the terrain onto which the White House should seek to shift the political debate.
Don't play the Republicans' game by agreeing to debate "big" vs. "small" government. This is a complete illusion - just watch the favors that businesses will seek from Republicans on the Hill; not all of these appear "on the government's balance sheet", to be sure, but you can talk to the anguished people of Ireland about how exactly supposedly "pro-business" (and definitely pro-big bank) policies end up costing the taxpayer a lot of money. (Or just look at how the financial disaster of 2008-09 ended up costing us 40 percentage points of GDP, measured in terms of the increase in our national debt - directly because of how the financial sector ran its customers and itself into the ground.)
The political debate should begin with documenting business practices that are misleading and duplicitous, wherever they occur.
We need transparency and accountability in the financial sector - and in all other parts of our economy. Elizabeth Warren is exactly the right person to lead this charge, in the first instance from the CFPB.
She should be nominated by President Obama to head the agency. The fight for her confirmation would make her ideas clear to millions. Let's see which senators exactly are willing to argue against greater transparency.
This post originally appeared at The Baseline Scenario.
New Party. Read some Bacevich, and encourage him politically.
I just wish we could get away from using the word "consumer". It makes us all sound like mental patients.
She's just a feel-good front, for the financial industry.
Unfortunately, Warren will remain in the background, a tantalizing reminder, of what might have been.
The suspense is killing me. I'm still waiting for the White House to use an opportunity wisely. I don't think this is it though. It's too far away from the election.
"In the years leading up to the worst financial crisis since the Depression, as gambling fever seized Wall Street, one of the primary forces encouraging greater risk was the way that executives at major banks were compensated:
Nothing has changed. The banking institutions are the delivery systems which are inextricably tied Wall Street.
"Bethany McLean and Joe Nocera (in their book entitled, 'All The Devils Are There') have done an impressive reporting and synthesizing job, and they provide the most complete, serious and sophisticated description of the genesis of the real estate bubble we now have."
The lack of regulatory oversight that fueled the real estate crisis via the banks must now shift to credit cards because the gambling continues...
"So too is the deleterious effect of regulatory competition, which opened the door to regulatory arbitrage, and nudged regulators from being overseers of banks to seeking bank "customers." This eventually produced a pernicious form of regulatory capture that mimicked the belief that someone "else" -- credit raters, the market -- would take care of business: a systemic forfeiture of responsibility."
In Ms. Warren's words: "...the best way, in my view, to strengthen those middle class families is to find solutions that are deep and lasting, that strengthen the markets, and that will create a robust, competitive consumer credit industry that works for families, not against them."
The thing is, as long as giant Fortune 500 companies get corporate welfare, tax breaks, government subsidies, and unfair advantages over small and medium size business, things will never change. Too big to fail is absurd.
Agreed. Transparency is not a good thing if you are used to making your vast fortunes scheming, manipulating and scamming the public - which is exactly what bankers and wall st have relied heavily on.
Elizabeth Warren is not part of the Govt Sachs teamplayers - they don't believe she has any business intruding into what has been their less-than-honest, anyhting goes free for all in the market.
When through the process of the law, the common people have lost their homes, they will be more tractable and easily governed through the influence of the strong arm of the government applied to a central power of imperial wealth under the control of the leading financiers. People without homes will not quarrel with their leaders.
History repeats itself in regular cycles. This truth is well known among our principal men who are engaged in forming an imperialism of the world. While they are doing this, the people must be kept in a state of political antagonism.
The question of tariff reform must be urged through the organization known as the Democratic Party, and the question of protection with the reciprocity must be forced to view through the Republican Party.
By thus dividing voters, we can get them to expand their energies in fighting over questions of no importance to us, except as teachers to the common herd. Thus, by discrete action, we can secure all that has been so generously planned and successfully accomplished."
Revealed by Congressman Charles A. Lindbergh, Sr. to the U.S. Congress sometime between 1907 and 1917.
THE BANKERS’ MANIFESTO OF 1934
http://www.redicecreations.com/specialreports/2005/07jul/bankersmanifesto.html
another great post!
Not until every American comes to the conclusion that DEMS/GOP are two sides of the same corporate coin will we ever make any headway against the criminal bankers who have been manipulating and scamming the world for decades.
Way too many transplants from Goldman Sachs have position of power in the govt - Geithner and Bernanke and Volker - and many others need to be flushed out. Until then we have GOVT SACHS - and the fleecing of America contiinues...