In the Arena

The Elizabeth Warren Test

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The incredibly boorish grilling of Elizabeth Warren by Republican members of a House subcommittee on Tuesday raises two interesting questions: After a decade in which money lenders raped and pillaged homeowners, home-buyers and credit-card holders, why are Republicans so intent on gutting an agency that would protect the American middle class from such persistent sleazebags? And second: Why has the Obama Administration been so reluctant to appoint Warren director of the Consumer Protection Finance Bureau–and force a massive and very accessible public fight on an absolutely crucial economic issue: the corrupt, predatory nature of the financial community?

Beats me. This seems a political no-brainer. Warren is a terrific public performer, with a strong personal story. “She scares the banks to death,” a Senator told me. And she’s a savvy operator, too: She hired Holly Petraeus–wife of the General–to lead the fight against the skeevy payday lenders who surround military bases and take advantage of our young, and financially unsophisticated, military service members. Furthermore, this is a no-lose political battle for Democrats–who among us hasn’t been outraged, or ripped off by, the small print that accompanies every mortgage, credit card and home equity loan?

But the President has chosen not to make the fight…so far. There are two possible reasons for that. First, I’m told, he believes he has other, more important fish to fry–budget battles to be fought in Congress this year on his favored education, research and infrastructure programs. The issue of financial regulation is deemed too complicated for public consumption. (I disagree: the issue is as plain as your latest credit card interest charge.) There is also the fact that Obama’s Wall Streety economic team doesn’t like Warren very much. This is a matter of real concern: Obama’s willingness to buy the Wall Street conventional wisdom has been the greatest weakness of his presidency so far–and I mean that politically as well as substantively.

Senator Al Franken and Rep. Barney Frank have both called on the President to make Warren a “recess appointment” –that is, appoint her through the back door, when Congress isn’t in session. I disagree. Obama should appoint Warren through the front door, and make this a litmus test of Republican ideology. I’d really enjoy hearing the members of Congress tell us–with the full media spotlight shining on them–why the public shouldn’t be defended against predatory lenders by a woman who has proven herself to be the most forceful and effective voice for consumer rights in the Obama Administration.

Update: The Treasury Secretary, Tim Geithner, has come to Warren’s defense–and actually criticized Wall Street. Holy cow.