The (Liz) Warren Commission and Financial Reform

A lot of hope was placed on the back of Elizabeth Warren and the financial reform act passed by Congress at the behest of the Administration formally known as the Dodd-Frank Wall Street Reform and Consumer Protection Act. Concurrent with belittling the liberal Democratic activist base as ungrateful whiners, the Administration and Democratic leadership has touted Liz Warren and Dodd-Frank as prime examples of accomplishments that should thrill and satisfy the base. But are those “accomplishments” really all that and should they mollify Democrats, at least on financial reform issues? The initial returns indicate no.

First, the ability of Dodd-Frank to do the job intended as to rapacious financial institutions is highly debatable at best, and that is being generous. It is already established the bill did not clamp down sufficiently on the reckless casino style trading in derivatives and synthetic financial products, and may even have opened a new portal for abuse by the Wall Street Masters of the Universe high frequency traders.

Gretchen Morgenson in today’s New York Times lays out beautifully the bigger picture on the lack of reform in the “reform”:

THE government is pulling a sheet over TARP, the Troubled Asset Relief Program created during the panic of 2008 to bail out the nation’s financial institutions. With the program’s expiration on Sunday, we can expect to hear lots of claims from the folks at the Treasury that it was a great success.

Such assertions would be no surprise from a political class justifiably concerned about possible taxpayer unhappiness, the continuing economic turmoil and the midterm elections. But if we have learned anything during this crisis, it is that the proclamations emanating from the Washington spin machine must be taken with an extra-hefty grain of salt.

Consider the claims made last summer that the Dodd-Frank financial reform act reduces the threats that large, interconnected banks pose to taxpayers and the economy when the banks are deemed too big to fail. Indeed, as regulators hammer out the rules governing derivatives transactions, it’s evident that the law has created a new set of institutions that will almost certainly be deemed too important to fail if they ever get into trouble. And that means there won’t really be an effective way to keep those firms from taking big, profitable, short-term risks that are dumped on the taxpayers when the bets fail.

Our roster of bailout candidates includes the clearinghouses, created under Dodd-Frank, that are meant to increase the oversight of derivatives trading. Because most derivatives transactions are expected to go through these clearinghouses, they will be “systemically important” under the law. As such, Dodd-Frank specifically provides that “in unusual or exigent circumstances,” the Federal Reserve may provide such entities with a financial backstop, including borrowing privileges.

Remember this: Financial backstop is just another term for a taxpayer bailout. And the major banks and brokerage firms are the members of the clearinghouses, so a backstop would essentially be for them.

According to the Bank for International Settlements, the entire derivatives market had a gross credit exposure of $3.5 trillion at the end of 2009. Obviously, even a small fraction of that amount could represent a sizable call on the taxpayers if a clearinghouse hit the skids.

So much for eradicating too-big-to-fail.

So much for ending “Too Big To Fail” indeed. Like upwardly spiraling health care costs from “healthcare reform”, it appears all that has been done is to institutionalize the very problems in need of eradication.

Well, how about Elizabeth Warren, surely her placement in the Obama Administration is a giant positive the Democratic activist base can hang their hat on and take to the bank, right? In a word, no. Now, before we go further, I want to make perfectly clear that I admire and respect Warren greatly and probably as much or more than anybody in the public sector today. For that reason, writing the following pains me greatly, but I believe the facts and circumstances warrant honesty about the situation surrounding Liz Warren.

Here is what I said back on September 17th:

I spent a good chunk of the night a couple past reading the bill and the enabling provisions for formation of the CFPB. Done properly, the contemplation is for sucking in huge swaths of power, almost like a smaller version of the reorganization that formed the DHS, but is a good way. I think Warren will be interested in consolidating this power in an agency that might actually help people; I do not think any of the others involved, whether Geithner, Summers, Obama, Banksters, MOTUs and the agencies the power would be carved out from, will be interested in this at to any real degree at all. As is, Geithner and his Treasury team will have the last word on this, not Warren.

But the thing is, the power Geithner has is vested in the head of CFPB once confirmed or installed by recess appointment, which could have been Warren. That is a HUGE difference that Obama has intentionally and actively worked his ass off to prevent occurring. Today is the first big date, the date Geithner specifies the operative date for transfer of powers from other areas and agencies, which is the date the whole formation will then be calendared off of. It is a huge date. That is one of the main reasons why they strung Warren out till today, so she had no input on that. So Obama Could have named Warren immediately and pushed hard for fast confirmation or recess appointed her so that she had the power to do this right. Instead, he intentionally strung her out and insured that Geithner had all the real authority to not make the CFPB what it ought to be and has, further, insured that Warren never is confirmable in the future (the logistics after the mid-terms will make it impossible). Heckuva job.

For any so inclined, go read the actual CFPB enabling provisions in the the Dodd-Frank Bill. I think you will begin to understand what I am describing as to the awesome power that could be in CFPB if it was taken and done right. That power, and the ability to NOT exercise it, however, because of the Obama White House path, stays vested solely in Geithner/Treasury hands, and subject to the incredibly relentless influence of MOTU Banksters until a CFPB head is confirmed or recess appointed. And that, folks, is exactly why the Obama Administration refused to nominate or appoint Elizabeth Warren to be the actual head of CFPB. There was never a chance.

But there is a lot of good Warren can accomplish in her weird hybrid post Obama crafted for her, right? Not really, especially in relation to the awesome power she could have wielded, and should be wielding as head of CFPB. Yves Smith at Naked Capitalism sums it up very well:

It is now official that Warren is at best a placeholder; she cannot have much impact. She can’t make much in the way of policy or personnel choices; that would encroach on the authority of an incoming director. And even her ability to influence the choice of a nominee is questionable. Her taking the advisory role now assures that the nomination of the permanent director will come after the midterm Congressional elections. Given the virtual certainty of Democratic losses, the odds are high that Team Obama will settle on a “conservative” meaning “won’t ruffle the banking industry” choice, and argue its hands were tied.

So the Obama camp has played this extremely well. They get to avail themselves of the Warren brand, give her a Potemkin role, and use it to push the timetable for nomination of the permanent director out, which give them cover for installing a more compliant choice.

That is exactly right. And, as I stated above, what the Warren co-option by Obama and Geithner has done is not just to score political points from gullible Democrats desperate for a hint of intelligent financial policy from a moribund Administration, but more importantly to provide cover for the hollowing out of what could have been, and should have been, awesome power of a CFPB in competent and motivated hands of somebody actually interested in real consumer and citizen protection. Someone like Elizabeth Warren. It is a craven bait and switch and you, the consumer and citizen, are on the losing end.

Want more evidence? From Sewell Chan in Thursday’s New York Times:

The Obama administration is starting to set up the new Consumer Financial Protection Bureau, but relief for consumers befuddled by the complex disclosures that accompany credit cards, auto loans and mortgages will not come about right away.

Under questioning from senators on Thursday, the deputy Treasury secretary, Neal S. Wolin, acknowledged that regulators would not have substantive power to write rules governing a vast array of consumer loans until a permanent director of the bureau is in place and until July 21, 2011, when responsibilities from seven other federal agencies are transferred to the new bureau.

…..

At the hearing, Senator Richard C. Shelby of Alabama, the top Republican on the Banking Committee, said that the Treasury Department had emphasized the need to move quickly on writing new rules governing consumer loans, and questioned whether the department could do that “without a confirmed director.”

Mr. Wolin replied that “there is limited rule-writing authority, but it is constrained until such time as there is a confirmed director.

….

Finally, Mr. Wolin acknowledged to the senators that “the authority to actually issue a rule that would bind private parties, for example, in the mortgage area is a tough one until such time as there is a confirmed director.”

Therein lies the truth the Obama Administration has carefully obscured. They not only denied Elizabeth Warren the post she deserved and the power the country needed in her hands, they co-opted her as cover for frustrating the very purpose of the CFPA. There is no real power for the CFPA, and the true “rule writing” cannot occur, until there is a formal head and because of the bait and switch, Obama and Geithner have indefinitely strung out the time when there will be such a formal head of CFPB.

Elizabeth Warren is completely marginalized and, whatever little authority she does currently have disappears the second a real head of CFPA is confirmed. And do not kid yourself, while confirmation of Warren to head the CFPA would have been possible, even granted it would have been a very tough fight, in the current Congress, it will be impossible with the reduced Senate majority in the coming Congress. Thanks to the conduct of the Administration, there is now no chance whatsoever of Warren ever being confirmed and instead a conservative hack vetted and to the liking of conservative Republicans and Wall Street banksters will be the choice. Mission accomplished.

The ever more arrogant and belligerent to the progressive base Obama White House can call it “whiny” all they want, the truth is they are selling the base, and the rest of the country and mostly gullible press, a bill of goods. Admitting the truth isn’t being whiny, it’s being honest.

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  1. Mary says:

    The real power Warren has is the power she has created for herself – without any help or assist from Obamaco. Her real power even after the shame appointment she’s getting is her own personal credibility. In some ways, it may be a good thing that Obamaco hasn’t really given her a reason to feel beholden.

    The best “regulation” they could do for derivates is make them call trading in credit default swaps insurance and regulate it as such. The financial industry doesn’t need the cds trade and it is trouble waiting to happen, yet again.

    • bluedot12 says:

      I think CDSs were one of the major causes of the crash. The fact they have been put in a clearing house means they can write rules to regulate them. Yeah, I agree it could all come crashing down again but I think the basis is there to write regs to avoid the worst of it. (I think that was in the Times today as well.) What I would worry about is an MMS type regulator that pays no attention.

      Warren may be a political appointment but she also can propose rules and popularize them. That is one plus. I’m not sure of how ‘unpowerful’ she really is. She has a chance to make this as she wants to some extent. So I’m going to hold my judgment for the time being. One big weapon she has is her resignation with a lot of shit.

      • bmaz says:

        Well, time will tell, but “She has a chance to make this as she wants to some extent” is flat out wrong, for the reasons stated in the post, and myriad others too.

          • bluedot12 says:

            BTW, if the job is worthless then why take it? Maybe she is not who you thought she was? No drive??

            • GlenJo says:

              I’m sensing the whiff of desperation in much of this. I think Warren took it to do whatever possible small change she could make. I hope that she uses her own little bully pulpit if she has to blast her own bosses. (I hope, but I doubt.)

              The Morgenson Times storey is frightening. Having the US taxpayer try to “backstop” the derivatives market, those things Buffet called the financial weapons of mass destruction, is truly insane.

              Other economists, most notably Stiglitz, recommended a fundamentally different approach than Geithner to handling the financial crisis. His idea was to ring-fence the failed firms and take them to bankruptcy all while enacting measures to ensure Main St continued to have a functioning banking system.

              Instead we keep trying to “insure” more and more of the financial system with taxpayer backing. Estimates are that the derivatives market had $600 to 1200 trillion “in play” at one time before the crash (contrast this to an estimate that the earth is only “worth $200 trillion. That’s an insane amount to “insure” and if we had just let it collaspe to it’s real value (instead of bailing out AIG), it would now be worthless.

              My real fear is that the price “they” will want to our enhanced financial “security” is gutting Social Security and Medicare. Social Security and Medicare didn’t cause the financial collapse and represent the last little bit of real security for the middle and lower class.

          • bmaz says:

            Heh, yes, but not only does a reading of the actual CFPB enabling provisions in the bill support what I am saying, so does the direct testimony of record in front of Congress by the two top Treasury officials.

            As to why she took the job, I would assume that she concluded whatever she could get accomplished on the inside was still more than what she could get accomplished from the outside. That is likely true. What I am saying is that it will NOT be what everybody has been led to believe with respect to the CFPA; her effect there will be some but not the great shaping that could have occurred if she was formal head of CFPA. It simply is not possible, irrespective of whatever crap to the contrary has been peddled to you. Is it possible other good things result? Yes, and I sure hope that is the case.

    • textynn says:

      I thought when EW got this figurehead position it was to make the WH her boss and then they can shut her up and neuter her.

  2. profmarcus says:

    the appointment of liz warren and the passage of the dodd-frank legislation are akin to the little dutch boy sticking his finger in the dike – much too little, much too late… our banksters are still pillaging and plundering as if there’s no tomorrow and even cnn is starting to get a clue (see Mortgage Squatting)… then there’s the mercurial alan grayson who, bless ‘im, got a clue quite some time ago (see Fraud Factories)…

    our vaunted capitalist system is broken and, despite the attempts of our super-rich elites to prop it up, the sooner we can accept that sad reality, the sooner we can get going on figuring out what comes next… unfortunately, there’s no one but us peasants who have any interest in engaging in the kind of national dialogue such a major effort requires… our overlords certainly won’t be the ones to lead the way and why should they…? the system continues to reward them handsomely while the rest of us suck hind tit…

    And, yes, I DO take it personally

  3. JohnLopresti says:

    I figure there could be some 3,000 unemployed people as starters, to whom the administration could proffer some guidance thru the worrisome trials of learning to manage a household budget and figure their simple downsizing measures appropriate for the new lean America. The individuals in the select list with these extraordinarily acute problems, evidently, according to Bloomberg, are millionaires. It*s almost like the realization that the 4-year degree from undergraduate college is only a beginning if one wants a rounded education plus a few areas of expertise.

  4. arcadesproject says:

    I watched an Alan Greenspan interview a short time ago and Alan opined that, in the not distant future, we would be having the same conversations about bank failure and bail-outs and market collapse and risk, that we are having now.

    The sub-text was that that the MOTU will simply not allow effective regulation and over sight and that the peasants are doomed.

  5. allan says:

    Elizabeth Warren is completely marginalized

    as is Paul Volcker and anybody else who’s worthwhile in this Administration.

  6. papau says:

    Spot on comment –

    A week and a half ago Tim testified to Congress on a Wed that Warren had no authority (this is a paraphrase). Warren will advise on the merging of currently existing departments that will occur next June – full stop. None of the new laws authority will be exercised until a director is appointed and confirmed. Personal hires has already started and are being done by Tim without Warren input.

    Warren has as much authority as Obama wants to give her – and we know how much he loves progressives and regulation of the banks. It appears she will run some committees to get industry input and current agency input – and do the talk show circuit.

    • bmaz says:

      It becomes a little mind numbing every now and then, doesn’t it? Heck, my normal beat is torture, surveillance, national security and civil liberties law issues, so I had hoped the financial reform act would at least be a ray of some hope on the periphery. And, truth be told, there are some things in there that are positive, including having a CFPB at all. But, what sent me over the edge was reading the actual CFPB enabling provisions in the actual bill, the potential for a real power center to do good is astounding. How that capability got by Congress and signed into law is beyond me; but the powers have to be taken correctly and fully and shaped into the right agency form or it is pretty hollow. And that is exactly what is occurring.

    • frmrirprsn says:

      Elizabeth Warren has as much authority as she can force Obama to give her. She is aware of the limitations you and others have raised. She doesn’t need the line on her resume. She can do some good on the outside. At least for the moment she thinks (hopes?) she can do more good on the inside. They have done their best to marginalize her. But it seems reasonable to assume there were negotiations back and forth before her appointment. She has direct access to the president. As a recess appointee, she would not have. That can’t make Geitner happy. She is not without leverage. She is relatively unique in the impact her resignation could cause. I’m not wildly optimistic, but Warren is the person I respect most who can reach the president.

      Obama doesn’t seem to have many deeply held policy convictions of his own. I hope many of you have enjoyed the YouTube clips of Warren taking Geitner apart like a second class student in a graduate seminar during the hearings. If anything is ingrained in Obama’s character it should be taking instruction from law professors. Lets see what happens. Maybe we can help.

      • eCAHNomics says:

        Obama doesn’t seem to have many deeply held policy convictions of his own.

        Disagree. Think O has very strong & deeply held ‘policy’ convictions that what’s good for his fin supporters and thus himself is good for the country. A true & strong narcissist.

        • fuckno says:

          too many still wonder whether the Democrats have gone ‘full idiot’, or ‘full scum’ on us. Since the Welfare Reform Act of 1996, it should have been quite clear which way the wind blew.

          • eCAHNomics says:

            Yesterday’s book salon was an example of the deep naivete among some who should know better. Callahan was completely taken in by O & still thinks anyone with a D after his name is progressive. Had no defense against those of us who pointed out that “greatest income redistribution since FDR” was accurate in the sense of redistributing the middle class to the rich. I got into the discussion late so the end of the thread was the most revealing of Callahan’s idiocy to me. I think Bev ended it a bit early because the disagreements with Callahan were coming hot & heavy.

              • eCAHNomics says:

                Having said that, I think we were all very thoughtful in our denigration of his hypothesis. LOL. My fave was using Bloomberg as a foil & getting him to admit that Bloomberg, who started off his political career as a D and just the sort of pol that Callahan claimed to be writing about, was no longer progressive enough to fit the mold.

          • eCAHNomics says:

            Think it is more useful to point to what O is actually doing, as bmaz has done, than to try to characterize it at this stage. Characterization involves knowing O’s intent. We can deduce that to some extent from his actions, which are pretty consistent. But words like idiot or scum don’t hold much info, imo.

            • fuckno says:

              right, eC

              Idiot:
              Many are excusing him as being too accommodating to the Rs, and those who feel strongly that way accuse him of idiocy.
              Scum:
              He’s a kleptocrat.

        • frmrirprsn says:

          I said he doesn’t have many “policy” convictions. He’s never shown an interest in policy in IL, the U.S. Senate, or as president. It’s always about Obama. I agree 100% that he’s a narcissist. If he were ever to think the finance industry isn’t good for Obama (in the broadest sense including future employment opportunities) they’ll go under the bus as quickly as Rev. Wright. I understand it’s unlikely that he’ll think anything of the sort. But it isn’t all or nothing.

          • eCAHNomics says:

            I agree that the normal use of the word policy would involve some intellectual value added to the emotional baggage one brings with to the issues. My point was that people like O conflate them, i.e., policy IS how they look at things emotionally. Although they do not have enough self-awareness to recognize the conflation.

            OY, even I sound opaque to my own ears. Sorry if every additional comment is making my point more obscure.

            • frmrirprsn says:

              I think follow you. My own inclination is to place public actors along a continuum. At one end you can find people for whom power is entirely a means to advance policies. These people see power as a way to change policy. (Not many of these in high office. There actually was a member of congress from a swing district who said, before a vote that would be unpopular, that issues were more important than his reelection.) At the other extreme are people who see power entirely as a means to their own advancement, or to prove their own self worth, or something. These people see policy choices as means to acquire and keep power. I believe Obama is far on that side of the continuum.

              • uneasyone says:

                Reasonable, but I disagree. I don’t think it is nearly as important to Obama to win the election as it is to curry favor with his corporate masters and advance the neocon agenda. I don’t think there is a progressive principle Obama wouldn’t sell out; I do think that there are plenty of progressive actions he might espouse, but would never take – even to win an election.

      • bmaz says:

        I agree with that and support Warren completely; however, the built in limitations and separation from authority are far more pervasive than the Administration has painted or the press and most people seem to understand. And that is the point of the post. But the fact is, the structure of this enterprise is unique, I have never seen anything quite like how it is designed, and Warren, for as good as she is, is never going to have a fraction of the influence people picture. Or that the Administration has disingenuously peddled.

  7. watajob says:

    “Your mileage may vary.” So, HCR was set up to save the great unwashed masses and look what a good job it’s … Oh. Well, OK. We’ll give Liz Warren an untenable position from which she can whip these crooks right into … Yes, I see. Quick look over there! Drones in Pakistan! That was a GREAT way to get people’s attention off of our domestic … Drat! Never mind.

  8. eCAHNomics says:

    Where is oldgold to make the point that you are denigrating Warren’s integrity that she should allow herself to be used this way? /s

    Yes, of course they figured out a way to marginalize anyone they don’t want to listen to. I have no idea what Warren thinks she can do, i.e., whether she thinks having some position is better for consumers than have none, or whatever. But I agree with you totally, bmaz. O is much more devious than most give him credit for, and FDL is better at figuring out the exact way they’re able to work it than anyone else.

    The funny thing is, that for all the tokenizing of reformists as a smokescreen for doing the fin ind bidding, the fin ind still hates him for it. So his compromise is to take the worst of both worlds.

  9. allan says:

    If anything is ingrained in Obama’s character it should be taking instruction from law professors.

    Unfortunately the instructors that count have names like Dershowitz, Goldsmith and Yoo.

  10. PeasantParty says:

    Can’t wait to see her on the talk show circuits. Hope she shames them all endlessly. Seriously, she is smart and will find an outlet somehow. Heck, maybe when the deck chairs get reshuffled she will be closer to having some meaning in office.

    • bmaz says:

      That is an interesting facet of this. For the reasons discussed above, I think she is likely to have far less real or lasting impact on CFPB than folks generally have been led to believe. But if Geithner et. al keep fucking stuff up, and she is there, maybe Obama will turn to her on financial policy in general and some good can come. And, who knows, that is possible.

  11. BMcGarth says:

    Note Barney Frank’s name is on the legislation……& ask yourselves along with Dodd how many give-a-ways to corporations has this creep been associated with..

    Somehow he flies under the radar has a “major tool” for corporate America..wonder how long he will keep getting away with his corporatism.

    • uneasyone says:

      It’s because he talks so liberal on social issues. I have tried to tell progressives about Frank many times; they keep telling me he’s one of the good guys.

  12. Propagandee says:

    If RahmbObama were a poker player, they’d push over half their chips to the opposition before the first card was dealt.

    • bmaz says:

      By the way, the guy who had been filling Biden’s old Senate seat, Ted Kaufman, will be taking over Warren’s old position a Congressional Oversight Panel for TARP.

  13. pdaly says:

    Big banks’ and O’s interests seem to align so I guess Obama using a threat of recess appointing E. Warren to get concessions from Wall Street before the election won’t be much in the cards either.

    My dream: Elizabeth Warren publicly resigns from her sidelined position and then primaries Obama, highlighting the bait and switch he pulled on America’s middle class, he along with the defenders of big banks content to bleed the middle class dry. (Or maybe Elizabeth Warren has a better plan, that doesn’t require a campaign war chest, to break the banksters’ stranglehold on the public’s wallet–though bmaz’s valid concerns are noted).

    • victortruex says:

      My dream: Elizabeth Warren publicly resigns from her sidelined position and then primaries Obama, highlighting the bait and switch he pulled on America’s middle class, he along with the defenders of big banks content to bleed the middle class dry.

      That’s not just your dream, it’s mine, too. The more I think about it, the more I come to believe that the only possible primary candidate that scares Obama and the Dems is Warren. Why she took this co-opted compromise post is beyond me, unless it’s precisely for the reason you suggest: to acquire insider ammo to use later.

      • pdaly says:

        Oh, I wasn’t implying she’s collecting dirt on them. I think the dirt is already in the public domain. However, if she has dirt on them and she has not signed any contracts preventing her from spilling, then bring it on…

      • bmaz says:

        And to Bob too – It gets to me as well, but personally I feel an obligation to call things as I see them. And there is a real disconnect from the promises made by an incoming administration, the statements it gives to its citizens, and the truth. It is very ugly, and there is not a whole lot of positive there on the issues we deal with here. Tell me where the good news is on civil liberties, financial regulation, the economy, war, terrorism and torture. Where is it; I would love to cover that, but I do not see it. Would you rather have little boy wonder bloggers blow happy crap up your rear or have the truth about what is going on? That is the daily editorial decision.

          • Petrocelli says:

            As I said to my friend, Spocko last night … consciousness must be gently opened, like Rose Petals. This place does a great deal to facilitate the opening of consciousness and drive positive change.

            Kudos to Marcy, bmaz and all the commenters.

            • pdaly says:

              Good point. When I speak in detail about these issues (torture, Gitmo prisoners ‘suicided,’ warrantless wiretapping, unindicted/charged Americans targeted for assassination by our government) with friends and family whom, I should say, are not reading this or any other liberal blog, they look at me as if I’m speaking in riddles.

              To paraphrase their responses,
              ‘I haven’t heard that before. You cannot trust what you read on the internet.’
              (I guess their implication is you can only believe what you see on the 6 o’clock news).

              I’ve got a field full of rose blooms that refuse to open. Gentle patience, as you suggest. I’m looking for blooms.

          • bmaz says:

            Boy howdy. That is a fact. The even worse part is not seeing the path out and up from the abyss. Go vote! Well, yeah, sounds great until you realize your two options are the same or worse. Just is depressing when you continue to look at the details. Pretty much the tact that Marcy and I have is just to explain what we think is going on whether it is Democrats or Republicans in power and try to inform people and make a record to counter the BS narratives spun by politicians, national security apparatuses and an often co-opted and slacker press. People often ask what can we do? I dunno. Be informed and try to inform others is the best I got until there is some political movement that forms to maybe carry the effort forward on a broad basis. We try to foster that here at FDL, but it is hard sledding; the forces arrayed against it are unbelievable.

            • pdaly says:

              Yes, I’ll keep informing those around me. I think it is the only response for now.

              I saw the Oresteia Trilogy by Aeschylus in London in the 1980s. Cassandra arrives onstage in a cage and made quite an impression. Little did I realize I’d be the one years later rattling the cage, trying to get people to listen.

            • Petrocelli says:

              I believe that PBO has accomplished far more than the last 6-7 POTUS have managed to do, but far less than he had the opportunity to do.

              Being informed = impetus for change and all of you do incredible work to inform.

        • BayStateLibrul says:

          The good stories are about struggles.

          It was a struggle to get Health reform, it was a struggle to get

          the Banking reform. It’s not perfect, Bmaz, but they tried.

          It is not an easy job with the Repubs…

          Consider if McCain was prez…

          I admire Barney Frank and your article denigrates him.

          Balance, Bmaz, balance.

          We got two years left with Obama…

          Let’s see what he can do.

          • bmaz says:

            I have seen what he can do and it makes me want to puke. Yes, he is better than McCain; never said he wasn’t. That election is over; the question is about the future. I do not see how the 4th, 5th, 6th and 8th Amendments, not to mention the Due Process clause, can take another term from the Constitutional fraud Obama. In the legal trenches I come from, there is no time left to “wait and see and give him a chance”. That is done, and he has shown himself to literally be a traitor and enemy of the Constitutional principles I reference. And it does not have one fucking thing in the world to do with Republicans, these are positions and arguments Obama has made all on his own.

            Don’t see how I denigrated Frank; others I quoted may have

            • BayStateLibrul says:

              Barney Frank:

              The bill bears his name.

              Your trash the bill.

              Hence, you bring Barney down.

              Guilt by association, I guess

              • bmaz says:

                Well, I consistently said there are several good things in the bill; the ones I identified as being bad speak for themselves and are, indeed, failings. And the provisions for the CFPA are out of this world good – IF exercised properly – but the problem is they are being gamed cravenly by the Administration to NOT create the kind of power center and voice for common citizens as is possible. That is not Frank’s fault, but it is a fact. Nor is it Frank’s fault that Obama did not want Warren with that power, walled her out of it and co-opted her into the amorphous position he did. Several commenters have had issues with Frank though.

          • victortruex says:

            We got two years left with Obama…
            Let’s see what he can do.

            You mean, let’s see how bad he and the Dems can really fuck us?

            Gee, I just can’t wait for that.

        • victortruex says:

          there is a real disconnect from the promises made by an incoming administration, the statements it gives to its citizens, and the truth. It is very ugly, and there is not a whole lot of positive there on the issues we deal with here. Tell me where the good news is on civil liberties, financial regulation, the economy, war, terrorism and torture. Where is it; I would love to cover that, but I do not see it. Would you rather have little boy wonder bloggers blow happy crap up your rear or have the truth about what is going on? That is the daily editorial decision.

          You nailed it.

      • bobschacht says:

        Amen to that!
        I’ve got plenty of fuel for motivation.
        My worry is that cynicism and pessimism mainly cause us to throw up our hands in despair and do nothing, because we feel like nothing we do matters. That would be a very bad outcome, IMHO.

        Bob in AZ

  14. papau says:

    Sheer has been a hero over the years – but this time he screwed up because of lack of knowledge of the street, lack of knowledge of derivatives, and lack of knowledge of who regulates what.

    To blame Clinton is nonsense – and Krugman and myself and many others have explained why the two facts that are the basis for this canard are not on point. G-S never regulated investment banks, and they were the ones the lead us down the rabbit hole. Greenspan could have regulated at any time – and chose not to do so. The other factoid that is cited is the 2000 law that updated commodities regulation but did not address derivatives – and indeed did not address ENRON’s theft – but that update, as limited as it was, was needed and was coming from a GOP Congress. And again Greenspan already had the authority to do something. The facts about the non-regulation under Bush beginning in 2003 and ending in liar loans in 2005-06-07 can be seen in the charts – but Sheer ignores this. The fact that post 1998 G-S modification that allowed Travelers Ins to merge with CITY some banks increased their servicing of loans ability – not a change from old G-S – is cited by Scheer as proof of Clinton’s errors. Amazing

  15. papau says:

    I also thought – and still do think – that Fin reform was the only bright spot for progressives and that it is a real bright spot.

    I watched Barney Frank propose tough provision after tough provision only to have the freshmen Dems on his committee plus the blue dogs join with the GOP to knock them down. That Barney got as much as he did approved by that committee was a miracle.

    But the obvious slow walk on the new regulation issuance almost appears to be a game to get 2012 contributions from the industry.

    • bmaz says:

      Yes, there are a number of decent things in the bill that really are positive. And the existence of the CFPB at all, even if it does not turn out to be what it could have and should have been, is one of them. The failure to curb the derivative casino and really separate the pure banking functions is problematic; if you fail to take advantage of the trauma we just went through to get that done, hard to see when it can get done – at least until the next cataclysmic collapse. Your point about there being some positives there is well taken though they are not necessarily the ones that are being pitched heavily by the politicians.

  16. papau says:

    Stiglitz needs to be chosen to replace Tim Geithner. I will not feel safe until that happens, but I fear it will not happen until Obama is replaced.

    Tim is no different that what we would have got from McCain – or indeed from the choice by whatever GOPer runs in 2012.

    • bobschacht says:

      Stiglitz needs to be chosen to replace Tim Geithner.

      I’m all in favor of that.

      And against bmaz’ pessimism, I will offer this: Warren had no sympathy from Rahm, but I believe she does have Pete Rouse’s ear, and that collaboration has already borne some fruit. Warren is not a neophyte in dealing with Geithner– after all, she’s been dealing with him ever since she was appointed to head the COP. And if Geithner and Summers really had their way, she would not have either of her present appointments at all.

      And think if Obama had nominated Warren to head the CFPB. He could not have recess-appointed her, because Harry Reid took all that off the table. And she would be in appointment limbo, like Dawn Johnsen was, unable to do anything. At least with her dual appointment, she has things she can do. Let’s see how setting up the CFPB actually works out.

      Bob in AZ

      • bmaz says:

        He could have easily recess appointed Warren during the August 9-September 10 break when he made a couple of other recess appointments; has nothing to do with Reid. If Obama had objected to Reid’s little deal on this break, it would not have happened.

        What he actually could have done is nominate her and fight hard for her confirmation. He had a majority of 59 and probably Charles Grassley, and maybe other Republs in play. Would have been a battle that is for sure, but he didn’t even try. Just like Dawn Johnsen, he wanted no part of Warren actually in that position; therefore she is not and will not be.

  17. TheOracle says:

    And it wouldn’t surprise me to learn that the Obama White House rubber-stamped the agreement arrived between Sen. Harry Reid and Mitch McConnell to stop any recess-appointments by President Obama from occurring over this specific congressional recess before the elections, with the consent of President Obama, and no-doubt with the help of the outgoing Rahm Emanuel.

    President Obama and former DLC head Rahm Emanuel have strong DLC connections with the Blue Dog Democrats in the Senate, including Senate majority leader Harry Reid. President Obama acts as if he is still a U.S. Senator instead of being president. He lays off exercising his recess-appointment power for over a year, even as Senate Republican obstructionism becomes more than obvious. When he finally does recess-appoint some nominees, he doesn’t recess-appoint ALL the ones blocked by Senate Republicans, instead choosing to cherry-pick, leaving out anti-Bush pro-law liberal progressive nominees like Dawn Johnsen. Why?

    Smoke and mirrors. Smoke and mirrors.

    • bmaz says:

      In fairness on that, making a recess appointment now would limit how long the appointee could serve where waiting until the first break of a week or more in the next Congress would give the maximum length of possible service time for the appointee. So that really was not that great of a loss.

  18. mrwebster says:

    Thanks for the article. I suspected as much. I believe Timmy is already staffing the agency without input from Warren.

    • behindthefall says:

      from your linked article; my bold:

      Increasingly, judges are holding that if MERS owns nothing, it cannot foreclose, and it cannot convey title by assignment so that the trustee for the investors can foreclose. MERS breaks the chain of title so that no one has standing to foreclose. The homes are effectively owned free and clear.

      The Lord moves in mysterious ways, His wonders to perform …

      Imagine the boost to the economy if all these people in financial trouble suddenly have more money to spend and new flexibility to get on with productive lives! And what sweet irony! It will/would be as if the “stimulus” went to the people who needed help most, rather into the back pockets of the institutions who by and large haven’t been passing the money on into the economy.

  19. fatster says:

    I realize we should just stop whining, but the messages Biden is sending are disturbing.

    Biden, 5 Supreme Court justices attend controversial ‘Red Mass

    LINK.

    • bmaz says:

      Red Mass is not all that controversial. It is fairly tame and all kinds of lawyers and judges go to them to see and be seen. Even if they are not Catholics. I have even been to two or three many years ago. This is much ado about nothing.

        • bmaz says:

          Not that I necessarily support it, I like complete separation of church and all state. But it is pretty harmless and is really kind of a social gig from what I saw (that is certainly the only reason I was there).

          • fatster says:

            No prob, bmaz. Things like that do really bug me, but I could have been more temperate. Thnx as always.

  20. jackie says:

    Morning everyone :)
    Sorry OT… but when there is Israel/russians/spies and computer attacks, it is usually interesting….

    This bit is from the telegraph article….(no link) and I was wondering just what that pretty Russian spy thought about this story…

    ‘Programmers following Stuxnet believe it was most likely introduced to Iran on a memory stick, possibly by one of the Russian firms helping to build Bushehr. The same firm has projects in Asia, including India and Indonesia which were also attacked. Iran is thought to have suffered 60 per cent of the attacks.

    Mr Langner said: “It would be an absolute no-brainer to leave an infected USB stick near one of these guys and there would be more than a 50 per cent chance of him pick it up and infect his computer’

    Hmmm… Israel and covert actions… say it isn’t so….

    http://www.defense-aerospace.com/article-view/feature/118468/did-israel-launch-cyber-attack%3F.html

  21. uneasyone says:

    I was laying 5 to 1 (symbolic) odds on these pages as all the fervor was building and predictions of her imminent appointment to head the agency were everywhere. No takers – even for jellybeans or something, although there were a few “believers” and “hopers”

    I’m taking this as a win – although I desperately wanted to lose.

    Obama needed to throw his base a bone and neutralize Warren as an issue until after the elections. He’s done that.

    “Put not your faith in princes.” I’m sure Obama would be able to source that quote for you if you don’t recognize it.

  22. jaker says:

    “Therein lies the truth the Obama Administration has carefully obscured. They not only denied Elizabeth Warren the post she deserved and the power the country needed in her hands, they co-opted her as cover for frustrating the very purpose of the CFPA. There is no real power for the CFPA, and the true “rule writing” cannot occur, until there is a formal head and because of the bait and switch, Obama and Geithner have indefinitely strung out the time when there will be such a formal head of CFPB.”

    “Elizabeth Warren is completely marginalized and, whatever little authority she does currently have disappears the second a real head of CFPA is confirmed. And do not kid yourself, while confirmation of Warren to head the CFPA would have been possible, even granted it would have been a very tough fight, in the current Congress, it will be impossible with the reduced Senate majority in the coming Congress. Thanks to the conduct of the Administration, there is now no chance whatsoever of Warren ever being confirmed and instead a conservative hack vetted and to the liking of conservative Republicans and Wall Street banksters will be the choice. Mission accomplished.”

    Your far far more educated take on Elizabeth Warrens placement as a financial adivsor to President Obama is so depressing. No very little about financial institutions. But

    If I try to look at this from another angle. Since it was going to be a fight to get congressional support for her appointment to head the CFPB and OBama clearly chose not to set her up in this position for a recess appointment. Is the only answer for these decisions that he caved into these financial institutions?

    What could have potentially been the disadvantages for the Obama administration appointing her at this time? And what would have been the disadvantages for taking up the fight in congress at this time?

    And could Obama appoint her during the winter recess to a permanent position?

    Just attempting to look at it from another angle. Again a total rookie in the financial world