IMHO, as the dust settles on the
real implications of the just-passed FinReg bill on Capitol Hill, news regarding the ongoing management and regulatory structure of our country's economy appears to be taking a rather big turn towards the surreal. A David Cho article in today's WaPo, "
Timothy Geithner's realm grows with passage of financial regulatory reform," tells us there's a new sheriff in town, perhaps entrusted with more power than any Treasury Secretary in U.S. history, and his name's Tim Geithner. And, if you connect the dots in that story with another story in Saturday's NY Times by Sewell Chan, "
Short List Emerges for Consumer Guardian," it sure looks more than likely that, given the previous 24-hour news cycle, the first thing the new sheriff (again, IMHO)
might be doing is throwing TARP watchdog-in-chief Elizabeth Warren under the bus.
Less than 12 hours after we learned, second-hand, via none other than Assistant Treasury Secretary Michael S. Barr, of how much so-called "respect" our Treasury Secretary has for TARP watchdog-in-chief Elizabeth Warren--despite
widespread public knowledge of a lengthy, memorialized trail of enmity between the two--and how she would make a great first chair of the Consumer Financial Protection Bureau, the Cho story in Saturday's WaPo also informs us that it will be none other than the Treasury Secretary, himself, who'll be the first (acting) Chair of the CFPB. (Perhaps for "many months," too.)
Adding insult to injury, the Chan piece in Saturday's NY Times underscores just how incredibly disingenuous (I was going to say, "Full of crap." Come to think of it, I just did!) our Treasury Secretary and his Assistant were, yesterday, when Geithner's minion made his saccharin comments about Warren. (See link in previous paragraph.) You see, Sewell Chan's article informs us that the short list of just three candidates for the first appointed chairmanship of the CFPB includes Warren, Eugene I. Kimmelman, a former consumer advocate who is deputy assistant attorney general in the antitrust division of the Justice Department, and Barr!
And, If a bunch of middle-aged men ganging up on a 61-year-old grandmother isn't enough to piss-off the fans of one of the only real champions of the middle class left in Washington, D.C., Chan included these little gems in today's NYT piece, too:
Short List Emerges for Consumer Guardian
By SEWELL CHAN
New York Times
July 17, 2010
....On Friday, David Axelrod, a senior adviser to the president, called Ms. Warren "a great, great champion for consumers" and said she was "obviously a candidate" for the job.
But Ms. Warren, 61, a scholar of bankruptcy law, has limited management experience, and as chairwoman of the Congressional Oversight Panel for the Wall Street bailout, has occasionally clashed with the Treasury secretary, Timothy F. Geithner.
Whoever is chosen for the five-year term will have to deftly navigate bureaucratic politics. Critically, the legislation sets up a new council of regulators, led by Mr. Geithner, that will have the power in some instances to nullify the new bureau's rules if they are deemed to jeopardize the stability of the financial system. The nominee must pass Senate confirmation.
--SNIP--
On Friday, Treasury officials denied reports that Mr. Geithner opposed the selection of Ms. Warren. Andrew Williams, a Treasury spokesman, called Ms. Warren "a driving force" behind the creation of the bureau and "exceptionally well qualified" to lead it.
The Washington Post's extremely complimentary lede on Tim Geithner in Saturday's edition, among other things, informs us that, as a result of the just-passed FinReg bill in Congress, the Treasury Secretary will maintain some of the most expansive power ever bestowed upon the Treasury Department. In fact, we're informed in the WaPo article that the FinReg legislation formally bestows upon the Treasury Secretary many of the very same, all-encompassing powers that were only temporarily given to his predecessor, former Goldman-Sachs CEO and Bush Treasury Secretary Henry Paulson, in late 2008.
We're told by Cho that it'll be Tim Geithner who'll be "...the head of the new consumer bureau until a director is confirmed by the Senate, allowing Geithner to mold the watchdog in coming months. And it will be up to him to settle a raft of issues left unresolved by the bill -- for instance, which financial derivatives will be subject to the tough new trading rules and which risky activities big banks will be required to spin off."
And, again, if you read Chan's piece, above, a note is already made therein that Geithner will be enabled to overrule that "powerful" (Heh!) new entity whenever he wishes.
Timothy Geithner's realm grows with passage of financial regulatory reform
By David Cho
Washington Post
Saturday, July 17, 2010
Half a year after some predicted he would be booted from the Obama administration, Treasury Secretary Timothy F. Geithner stands to inherit vast power to shape bank regulations, oversee financial markets and create a consumer protection agency.
Few Treasury secretaries have had such sweeping influence over such a wide realm as Geithner will wield once President Obama signs the new financial overhaul legislation passed this week by Congress.
The effort to dramatically expand financial regulation bears the stamp of no one more than Geithner. The bill not only hews closely to the initial draft he released last summer but also anoints him -- as long as he remains Treasury secretary -- as the chief of a new council of senior regulators...
--SNIP--
...In the wake of the bill's passage, there is recognition within the administration as well as on Capitol Hill that Geithner is not going anywhere anytime soon. White House officials said the speculation earlier this year about his tenure misunderstood his standing within the administration...
But, one thing I learned early on in my career is that there's no political upside to throwing a respected and beloved 61-year-old grandmothers under a bus. IMHO, it's not even a stretch to connect the dots in today's NYT and WaPo to come to the conclusion that this is what may be happening before our very eyes.
People tend to get upset about "stuff" like that.
People like Simon Johnson...
Treasury Makes A Mistake - Claiming They Are Not Blocking Elizabeth Warren
By Simon Johnson
Baseline Scenario
July 16, 2010 at 9:26 pm
It's one thing to block Elizabeth Warren from heading the new Consumer Financial Protection Bureau.
It's quite another thing to deny in public, for the record, that any such blocking is going on (e.g., see this report; Michael Barr apparently said something quite similar today).
There is a strong groundswell of opinion on this issue from the left - see the BoldProgressives petition. But the center also feels strongly that, given everything Treasury has said and done over the past few months, it would be a complete travesty not to put the strongest possible regulator in change of protecting consumers. (See Ted Kaufman on the NYT's DealBook, giving appropriate credit to the SEC, and apply the same points to broader customer issues going forward.)
--SNIP--
Failing to appoint Elizabeth Warren would be the straw that breaks the camel's back. It will go down in the history books as a turning point - downwards - for this administration.
Bold type is diarist's emphasis.
Yes, as I touched upon it in my diary from yesterday, "Why Tim Geithner's Attempting To Torpedo Liz Warren (updated)," even Simon Johnson is beginning to think along the lines of Markos Moulitsas, and his prescient comment around 19 months ago, when he tweeted: "Geithner is starting to look like Obama's Rumsfeld."
The voting public can only withstand so much cognitive dissonance. We all have our limits. For many--perhaps many more than the current administration may realize--those limits are being tested, right now.
Click on the link (in the Johnson blockquote, a few graphs above) to the Bold Progressives' petition and sign it!
Peace!