Tuesday, April 21, 2009

Warren takes on Geithner

Treasury Secretary Geithner will appear before the Congressional Oversight Panel today. (You can watch them live by clicking here.)

For those of you scoring at home the COP is the panel set up by Congress to review and report on the TARP and the other efforts to stabilize the financial system. The panel is headed by Elizabeth Warren.

Ahead of this hearing, Politico has an article indicating that Professor Warren may be wearing out her welcome on Capitol Hill:
While the bubbly and brilliant 59-year-old professor is a darling of Democrats, Warren has become the scourge of conservative Republicans, who question her panel’s exploration of more-liberal approaches such as nationalization and bank liquidation.
Most of the article goes on to describe dissatisfaction with Warren from lobbyists:
Financial services lobbyists, who’ve long disliked Warren for highlighting predatory lending and abusive credit card fees, argue that she’s using her post to push her own, anti-industry agenda.

“A number of people wonder if this is the new Warren commission or the congressional oversight panel,” said Wayne Abernathy, executive director for financial institutions policy at the American Bankers Association. “It’s looking more like the former than the latter.”
Let's see, who should we go with here? The Harvard professor with a no-nonsense reputation and a proven track record of advocating for the middle class; Or, "the smartest guys in the room," who just happened to take the world's biggest economy and reduce it to an absolute shambles, causing tremendous pain for millions of Americans along the way.

Every minute that public officials spend listening to the fools from Wall Street that created so much of this mess (or their paid advocates) rather than considering thoughtful proposals about how to navigate out of this mess from folks like Warren is an absolute affront to average Americans.

My only hope is that this Politico article is just a bit overblown and the only people really against the efforts of the COP are lobbyists. There is no guarantee of this, especially given this item from the article:
In private conversations, even some Democrats complain that Warren’s role as a constant Cassandra could undermine already tenuous public support for the bank, auto industry and other financial rescue programs.

The panel specializes in calculating the kinds of scary numbers that the Obama administration would rather not broadcast too loudly.
If there is anyone on Capitol Hill (from either party) or at Treasury or on Pennsylvania Avenue for that matter, who thinks we can just get through this rough patch and then everything will go back to the way it was, then we are in worse shape than I previously thought.

It's not that things absolutely can't go back to the way they were. We can all pretend that stock prices or home prices or any other asset price that we just pick at random can go up forever and that these inflated prices represent real wealth. I mean, it's not as if the human capacity for self-delusion has been diminished in any meaningful way.

The real fact of the matter is that things shouldn't go back to the way they were. Our behaviors were obviously unsustainable. Unless we want to get into the habit of waking up with an economic bubble hangover with frightening regularity, some things are going to have to change.

It may be the case that the change we really need starts with the work of the COP and Warren.

1 comment:

Your Lovely Wife said...

The new "Warren Commission"? I cannot believe our beloved Elizabeth is making enemies in Washington! "Anti-industry agenda" indeed!

The fools in Washington are like a bunch of toddlers plugging their ears and saying "la, la, la, I can't hear you!" at the announcement of BEDTIME.

We need a thousand more Elizabeth's and a lot fewer Wayne Abernathys!! Party on Wayne...

There is really is NO hope for this country.