Under guise of being handed an important role, Elizabeth Warren was shoved aside and tossed a bone by President Obama. One might not know it from the New York Times headline Warren to Unofficially Lead Consumer Agency
Elizabeth Warren, who conceived of the Consumer Financial Protection Bureau, will oversee its establishment as an assistant to President Obama, an official briefed on the decision said Wednesday evening.
The decision, which Mr. Obama is to announce this week, would allow Ms. Warren, a Harvard law professor, to effectively run the new agency without having to go through a potentially contentious confirmation battle in the Senate. The creation of the bureau is a centerpiece of the Wall Street financial overhaul that Mr. Obama signed in July.
Calculated Risk offered a one line comment on his blog “I think Ms. Warren is an excellent choice.“
I certainly agree. Unfortunately, no matter how much Obama tries to spin it, this has nothing to do with a “potentially contentious confirmation” but rather everything to do with Geithner winning the battle to marginalize her.
Marginalization of Elizabeth Warren
Yves Smith at Naked Capitalism hits the nail on the head in her appraisal Elizabeth Warren on Way to Being Sidelined as Head of Consumer Protection Agency, Relegated to “Advisor” Role
The body language of the Administration has been clear from the outset on the question of whether Elizabeth Warren would get its nomination to head of the new financial services consumer protection agency. Despite the occasional public remark regarding her undeniable competence, which really amounted to damning her with faint praise, Team Obama has never been on board with the idea.
The Warren marginalization isn’t about personalities, although the powers that be love to pigeonhole thorns in their side that way. The clashes reflect fundamental differences in philosophy. Geithner, the Administration that stands behind him, and Dodd all are staunch defenders of our rapacious financial services industry, even though they make occasional moves to disguise that fact. Warren, by contrast, is clearly a skeptic, and a dangerous one to boot, because she understands the abuses well and is able to communicate effectively with the public.
Expect Warren to be pushed further to the sidelines, just as Paul Volcker has been (oh, and pulled out of mothballs when the Administration desperately needed to create the appearance it really might be tough on banks. Perhaps they hope her tenuous standing as acting head can be used to keep her in line.
Yves points out an MSNBC headline revised from “Wall Street critic won’t get top consumer job” to the anodyne “Wall Street critic to help set up consumer agency”.
Both versions exist in cyberspace if you check.
However, all you really need to know can be found in a single sentence in the New York Times article. “She will also be a special adviser to the Treasury secretary, Timothy F. Geithner, and report jointly to Mr. Obama and Mr. Geithner.“
An adviser to Geithner?! Good Grief. This is the tune I hear: With a knick-knack paddywack give a dog a bone, Obama just sent Warren home.
I am sure she will do the best she can, but on Geithner’s leash, I rather doubt she will be able to accomplish much of anything.
I hope I am wrong.
Mike “Mish” Shedlock
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