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OpEdNews Op Eds    H2'ed 9/18/10

Are There Financial Industry Fingerprints on Warren's Appointment "Not" to "Head" of Bureau of Financial Protection?

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Message Dave Lefcourt
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What does one make of President Obama naming Elizabeth Warren to "oversee" the creation of a new agency to "regulate banks, lenders and credit card agencies" instead of nominating her to head the new "Bureau of Consumer Financial Protection"?

Her new job will be as "special assistant" to the president as well as placing her within the Treasury Department headed by Secretary Tim Geitner.

If she were nominated to head the new "bureau" she would require Senate confirmation. Republicans object to Warren as being too critical of Wall Street and the big banks. The latter (of course) object to her being the "head" of the new agency.

Progressives and consumer advocates alike have campaigned for Warren's nomination to "head" the agency as she has been a huge consumer advocate as well as being openly critical of the role big banks exercised in perpetrating the financial meltdown and the subsequent economic "great recession".

So here is the rub; Obama avoids a Senate confirmation fight over Warren "heading" the new agency, but from here that's "good" and "bad". The "good" is her new position requires no Senate confirmation, which would (as said earlier) be required if she were nominated as the "head" of the agency. The "bad" is her new position is "oversight" and not "heading" the "Bureau".

When you are directly in charge you put your imprint on the day to day operation of that agency and how forceful (or timid) it will pursue policies that are consumer friendly (or not).

A perfect example of "oversight" (or the lack of it) was the performance of the ratings agencies (Moody's, Standard and Poor's et al) who hardly exercised any "oversight" of the Wall Street firms they rated giving AAA ratings of the firms who sold or insured the financial instruments (derivatives and sub prime mortgages that were sold as packaged securities) that turned out to be the "toxic assets" (the FED and the Treasury subsequently bailed out) when the sub prime mortgage market bubble burst creating the financial meltdown in the fall of 2008.

Consider also Warren's being placed in a subordinate position within Geitner's Treasury Department. Though he has never held a position in a Wall Street firm, Geitner is a known insider who has catered to the big financial firms and has been openly critical of Warren's stance as a staunch consumer advocate and an adversary of Wall Street.

So bells start to ring in this observer's head i.e. Warren has been effectively pigeon holed and tethered by her new status as "overseer" of the "Bureau of Consumer Financial Protection" rather than named as its "head".

From here this smells too much like an insider's deal with financial industry fingerprints all over it.

Score another victory of Wall Street over Main Street.

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