Warren PR Push Intensifies as Evidence Against Her Succeeding Mounts

SarahB

(1000+ posts) Send PM | Profile | Ignore

Sun Sep-19-10 06:08 AM
Original message

Warren PR Push Intensifies as Evidence Against Her Succeeding Mounts

In other words, the die is already cast. The Obama Administration, again and again, has taken the side of the financial services industry, with the occasional sops to unhappy taxpayers and some infrequent scolding of the industry to improve the optics.

Friday brought the bizarre combination of a full bore PR push in conjunction with more evidence that Warren’s role was certain to be limited. It isn’t clear whether there was a change in plan or merely a later release of full details, but it emerged Friday that Warren had never planned to take a five year term as head of the agency (!). So the ambiguous nature of her role wasn’t simply, as reported earlier in the week, to avoid a confirmation battle the Administration might lose, but also because she did not want to serve a full term. Accordingly, the Administration announced, Warren would help select the person who would be nominated permanent head of the agency.

Now I have to tell you, this is mighty peculiar. 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.

Now contrast this reality with the theater on Friday to broadcast the party line that the Warren appointment is a giant leap forward for consumers. It wasn’t just the full court press by the Administration to get the message out (including a blogger conference call with Warren that I learned of too late) but also aggressive moves with organizations that could carry the message. And “aggressive” is no overstatement; I was given a long form, first hand account of an high handed effort by people aligned with Warren to say a particular group saw her appointment as a big pro consumer step when that group had no intent of making that statement.

The politically connected people I spoke to read this situation the same way I do (and further commented that their views are widely shared). Amusingly, Ron Paul is also providing cover by harrumphing about Warren being an “enormously powerful regulator” (really?). But the noise he and other bank industry boosters make illustrate a key point: her role as advisor is not a position of strength, her perch is not secure. And note further: the consumer protection agency cannot draft legislation or regulate until it is transferred to the Fed in July of next year.

http://www.nakedcapitalism.com/2010/09/warren-pr-push-intensifies-as-evidence-against-her-succeeding-mounts.html

Yves Smith is a leading economic blogger (one of the many who saw the financial crisis coming) and author of the book Econned.