The Long Knives are already out for Elizabeth Warren & the ConsumerFinancial Protection Bureau (CFPB)

It didn't take long - not that I expected it to. Once the tea party and the republicans with their deregulatory, free-markets fix everything zeal won big in the mid-term election - they took aim at anything and everything that smacks of "unnecessary" constraint on business recovery.   So Elizabeth Warren and the newly formed CFPB was certain to end up in the cross-hairs almost immediately.

The Banking Fiasco & Elizabeth Warren:

After the banking fiasco of 2008 - you know - that little crisis that sent the American and world economies to the edge of a new Great Depression - everyone was hoping that business as usual in D.C. would change.   I know it was rank hubris - or perhaps just faint hope springing eternal - for the American public to actually believe that they might start to matter.  Nevertheless - miracle of miracles the public did make one big score.  The Consumer Financial Protection Bureau was born and the President assigned Elizabeth Warren to the task of setting it up.



The formation of such a bureau and the appointment of Warren which had to be through the back door in order to avoid a messy confirmation hearing -did not sit well with the big banks and their favorite supporters - a money-hungry Congress.  The republicans had their long knives out for the Warren appointment and were denied the opportunity to cut her to shreds.  Of course the minute the election cycle was over the republicans starting making noise about demolishing the new agency.

Jon Stewart Shows Us How Responsible the Banks Are...

After all - it really isn't needed at all.  John Stewart proves that point perfectly when he describes how well the foreclosure process is being handled by the large banks.  In October this segment appeared on the Daily Show with Jon Stewart.  With this kind of smooth and transparent process in place, we don't need Warren and her bureaucratic red tape.  It shows that the big banks are totally capable of "self-regulation" and the need for any consumer protection from what Warren described as "tricks and traps" was overblown.  For those of you who don't know my tongue is firmly in my cheek.

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Shielding the CFPB From Chest Thumping Republicans:

Fortunately,  it appears as though they can't destroy the CFPB. They can't even starve it to death - though they might try if they win the White House in 2012.  Supporters of the new agency took what happened to the SEC to heart.  The SEC was the victim of underfunding for years while lobbyists from the financial sector poured a mountain of cash into the pockets of the favored few on Capital Hill.  The very officials who starved the beast - then cynically pointed to it as an example of "government inefficiency.

To prevent the CFPB from having the same fate - the nascent bureau was placed  under the protective arm of the Federal Reserve which is self-supporting.  The Fed pays its bills primarily from the interest it earns on its portfolio of Treasury securities.   This independence shelters the Fed from the perverse interests of lobbyists and Congress.

That isn't stopping the new majority in Congress from making a ton of noise. Texas Republican Jeb Hensarling - a member of the house financial services and budget committees is complaining that the agency "assaults  the liberties of the consumer."  I suppose I get his point. All Americans should be up in arms about losing the liberty to be scammed by their banks  and mortgage service companies.  I've got the RIGHT to be scammed dammit - and I'm going to make sure I don't lose it!

Ed Royce R- CA - who is trying to win the chairmanship of the Banking committee,  wants bank regulators to be able to veto any consumer protection that appears to be onerous that the CFPB proposes.  If you can't take it down - turning it into a powerless puppet with no real authority is the next best thing.   After all - these regulators did a superlative job overseeing the banking industry over the past 10 years.  So a consumer protection bureau is a prime example of redundant government inefficiency.

Yes, Republicans would love to have an opportunity to remove the CFPB out from under the protective arm of the Fed and play the same games it played with SEC.  It won't get the chance until 2012 - and it will have that shot only if they win the White House.

Elizabeth Warren Appears On the Rachel Maddow Show

In any case, Elizabeth Warren isn't taking any chances with all the posturing going around.  She took her case public immediately after the election and appeared on the  Rachel Maddow Show last night - here is the clip.



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