Obama’s New Consumer Watchdog

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First rule for smart citizens: Don’t EVER trust Obama or the media. And regard anything connected with the Republican party and its many branches as pure excrement or outright criminality.

By Stephen Lendman
[print_link] On September 17, New York Times writers Jackie Calmes and Sewell Chan headlined, “Obama Picks Warren to Set Up Consumer Bureau,” saying:
Obama appointed Harvard Law Professor Elizabeth Warren “to oversee” the new Bureau of Consumer Financial Protection (BCFP) “until a director is named later. The appointment (will let her) get the agency up and running without having to go through a contentious (Senate) confirmation battle,” one she might lose because of Republican and industry opposition.
She’ll be an assistant to the president, a “czar” for some, a designation held by numerous other White House advisors. She’ll also be a Treasury Secretary advisor, reporting jointly to Obama and Tim Geithner.
Who Is Elizabeth Warren?
A bio on the elizabethwarren.com web site includes the following:
At age 16, she was an Oklahoma state champion debater. Her education includes a BS from the University of Houston (1970) and a JD from Rutgers Law School (1976) where she was Editor to the Rutgers Law Review.  She taught law at Rutgers, the University of Michigan, the University of Houston Law Center, the University of Texas School of Law, and University of Pennsylvania’s School of Law before joining Harvard Law School in 1992, where she’s now Leo Gottlieb Professor of Law.
She’s also a member of the FDIC’s Committee on Economic Inclusion, the Executive Council of the National Bankruptcy Conference, as well as former Vice-President of the American Law Institute, a member of the American Academy of Arts and Sciences, and Chief Adviser to the National Bankruptcy Review Commission.
In addition, until her new appointment, she headed the Congressional Oversight Panel administering the $700 billion Troubled Asset Relief Program (TARP) for banks, but couldn’t constrain their multi-trillion dollar bailout, interest-free money, and virtual regulatory freedom.
Her writings include over 100 scholarly articles, six academic books, and several best-selling ones. Co-authored with her daughter, Amelia Warren Tyagi, her most recent one is “All Your Worth: The Ultimate Lifetime Money Plan.” An earlier 2003 one with her daughter is titled, “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke,” written years before the current economic crisis. It’s devastating many more of them, their numbers steadily increasing because of financial predators Warren will have little power restraining. That’s the problem.
Obama’s so-called financial reform gives Wall Street a free pass. Described as the most sweeping package since the 1930s, it’s, in fact, virtually toothless, an earlier article calling it “a stealth scheme for global monetary control,” can be accessed through the following link:
A follow-up one explained more, accessed though the link below:
It’s business, not consumer-friendly, and why not when powerful insiders wrote it.
In June 2009, The New York Times explained how, saying:
“In the last two weeks alone, the administration has heard from top executives from Goldman Sachs, MetLife, Allstate, JPMorgan Chase, Credit Suisse, Citigroup, Barclays, UBS, Deutsche Bank, Morgan Stanley, Travelers, Prudential and Wells Fargo, among others. Administration officials also discussed the president’s plan with the top lobbyists at major financial trade associations in Washington.”
Among other provisions, the bill gives the Wall Street owned Federal Reserve greater power. It lets big banks be self-regulating, facilitates greater consolidation, crowds out smaller firms, and establishes a Bureau of Consumer Financial Protection (BCFP), unable to rein in financial excesses, including abusive mortgage lending that fueled the housing crisis.
Yet New York Times writers Calmes and Chan were effusive, saying:
“Basically, the Consumer Financial Protection Bureau will be a watchdog for the American consumer, charged with enforcing the toughest financial protections in history.”  False. It’s pretense, a veneer of change, not the real thing, a line from Gilbert & Sullivan’s HMS Pinafore explaining it, saying:  “Things are seldom as they seem. Skim milk masquerades as cream,” especially for corporate interests, Wall Street heading its queue, making the key rules, getting its way, including what passes for financial reform. It’s cover for business as usual.
While the BCFP will supposedly oversea banking practices regarding credit cards, mortgages, payday loans, student loans, and other consumer financial products, exempted are financial institutions with less than $10 billion in assets as well as auto financing. Further, BCFP power to review large firms will be impeded by their ability to circumvent rules to do pretty much as they please. They wrote the new rules to assure it. Otherwise, “financial reform” wouldn’t have passed.
Yet Obama called Warren “one of the country’s fiercest advocates for the middle class,” and the BCFP a new “watchdog.” In name only, in fact, because Wall Street owns Washington, permeates government, and runs it like a subsidiary, its people in charge of what counts most – the nation’s money handled by the US Treasury and Federal Reserve that, of course, has nothing to do with government. It’s a private institution owned and controlled by bankers, big ones, chairman Bernanke serving them, not popular interests, a status no consumer “watchdog” will change or even challenge.
In fact, the BCFP will come under the Fed after July 21, 2011, though the new law prohibits any interference. However, the Treasury’s new Financial Stability Oversight Council (FSOC) has veto power over BCFP policies. It’s also a step toward world money and banking control, perhaps with one currency under a global central bank, banking giants, the IMF, and other international lending agencies. Against them, the most dedicated consumer watchdog will be impotent.
Warren, of course, is a temporary appointee, a director to be chosen by mid-2011. She also won’t serve on the FSOC that has real power under Geithner. Her role is more “show” than “dough,” to provide a veneer of credibility with little enforcement muscle.
Further, though critical of banker bailouts, she fully supports Obama’s policies. Why else would she be appointed, not to criticize that would get her removed and replaced. Consumer advocacy praise for her is premature, given how little authority she’ll have, and her reluctance to bite the hand that selected her.
Stay tuned. Wall Street’s power is undiminished, its hand firmly in control, its agents running the Fed and Treasury, in charge of the nation’s money.  Remember what Mayer Amschel Rothschild (1744 – 1812, founder of the family’s banking dynasty) once said:
“Give me control of a nation’s money and I care not who makes the laws,” or what laws they make. Consumer watchdogs are no antidote against that kind of power, not when Congress, the administration and courts stand firmly in support, spurning populist interests, Democrats no different from Republicans.
Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

White House ducks fight with Senate Republicans over consumer agency chief

By Tom Eley 
18 September 2010
[print_link]  President Obama announced on Friday the appointment of Harvard law professor Elizabeth Warren to oversee the establishment of the new Bureau of Consumer Financial Protection (BCFP), but not to actually head the agency. By naming Warren as a consumer “czar,” serving as a White House aide and advisor to Treasury Secretary Timothy Geithner, Obama bypassed Senate confirmation hearings and a threatened filibuster by Senate Republicans, who were expected to denounce Warren as “anti-business.”
The BCFP was established through the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law in July. Its purpose was to add a “consumer-friendly” gloss to this reactionary pro-Wall Street legislation, which does nothing to rein in the excesses of the banks that triggered the economic crisis. The BCFP is ostensibly tasked with overseeing banking practices in various forms of consumer credit, including credit cards, mortgage loans, payday loans, and student loans. But it exempts the great majority of financial institutions—those with less than $10 billion in assets, as well as auto financing. While the biggest banks, which account for the bulk of lending, are subject to BCFP review, there is nothing to stop them from offsetting losses in one form of predatory lending through fee hikes and other mechanisms.
Obama was under increasing pressure from liberal groups in the Democratic Party to name Warren to head the BCFP. She acquired a certain reputation as a consumer advocate with writings on the unfairness of bankruptcy laws and the growing financial stresses on middle-class and working-class families.  This reputation led to her selection to head the congressionally-appointed panel that oversees the Troubled Asset Relief Program (TARP), the main bank bailout effort, where she made occasional criticisms of the banks that provided a fig leaf of “fairness” and “oversight” to what was a trillion-dollar handout to Wall Street. The expectation was that she could play a similar role at the BCFP.
As the Wall Street Journal noted, “Liberal groups have spent months demanding Ms. Warren be appointed to run the new agency, even producing a rap video calling for her nomination. The White House has at times appeared torn, given that Ms. Warren is beloved by the left but considered politically toxic with some business groups.”
Obama resolved this dilemma by scotching the hearings and appointing Warren to a position that has no formal power. The alternative—making the appointment official and fighting it out with Republicans—was favored by “labor unions and consumer advocacy groups,” according to the New York Times. These groups argued that “Democrats should embrace such a battle as a means of drawing attention to the bureau’s significance.”
As is typical of this administration, the cosmetic sop goes to the liberals and the substance to the right-wing. Warren’s appointment was a media event. Speaking from the Rose Garden on Friday, flanked by Geithner, Obama called Warren “one of the country’s fiercest advocates for the middle class,” and extolled the BCFP as a “watchdog.” The new “czar” then gave interviews to all the evening television news programs.
At the same time, by giving her only a temporary appointment and ducking the confirmation fight, Obama reassured Wall Street that he intends no serious limitation on their rampant swindling of the American consumer. In her new position, Warren will report to Treasury Secretary Timothy Geithner, who played a critical role in orchestrating TARP and the entire Wall Street bailout.
The BCFP will nominally be part of the Federal Reserve Board after July 21, 2011, but legislation bars the Fed from influencing its functioning, and a new authority headed by Geithner called the Financial Stability Oversight Council, also created by the Dodd-Frank law, will have a veto over all the bureau’s policies. Because she is not formally the director of the BCFP, Warren will not sit on the oversight council.
Warren’s real task is not to defend consumers, but to lend a veneer of credibility to the BCFP and the broader “financial overhaul,” a role that suits her well. In spite of her criticisms of TARP over the past two years, she has unflinchingly backed the Obama administration, which has been primarily responsible for carrying out the Wall Street bailout.  Warren’s Congressional Oversight Panel has been critical of TARP entirely from the standpoint that it will discredit any future exigency in which another bailout is required.
Referring to the bailout’s “stigma” the panel’s recently-released September report noted “deep public frustration that whatever the TARP’s successes, it has not rescued many Americans from suffering enormous economic pain.” It asserted that the Obama administration’s extension of TARP through the year did nothing to help homeowners and small banks.
“Popular anger against taxpayer dollars going to the largest banks, especially when the economy continues to struggle, remains high,” it concluded. “The program’s unpopularity may mean that unless it can be convincingly demonstrated that the TARP was effective, the government will not authorize similar policy responses in the future. Thus, the greatest consequence of the TARP may be that the government has lost some of its ability to respond to financial crises in the future.”
Tom Eley  is a senior political analyst with the World Socialist Web Site

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