Almost a year ago, Elizabeth Warren began a focused campaign to bring consumer protections to the discussion about financial and credit reform. She is Leo Gottlieb Professor of Law at Harvard University, and (yet?) chose to introduce her position on such protections via the following YouTube video:
That was a year ago. Where is she now and how is she reaching out with her ideas? More importantly, how goes the move to create such an agency?
She recently gave an interview to Ryan Grim of The Huffington Post, in which she expressed optimism on the overall project, though she admitted that some watering down of some of the protections was inevitable in the give-and-take negotiations of governance:
I’m disappointed that Congress seems to be taking the side of auto lenders and big banks over the Pentagon, community banks, and all the public interest groups that oppose an auto dealer carve-out, and there are some other problems as well,” said Warren. “But right now the bureau has the authority and the independence it needs to fix the broken credit market. I keep waiting for an incoming missile that means the banks have won their fight to destroy this consumer agency, but that hasn’t happened so far — and I don’t think it will.
Another Q&A recently held with USAToday.com challenged her to express where her concerns for consumer protections came from, especially given her ambivalence over bankruptcy reforms in the late 1990s:
Q: Did that spark your interest in a consumer finance protection agency?
A: I’ve studied bankruptcy as a professor since the early 1980s, and over time it helped me understand the hollowing out of America’s middle class. I discovered the extent to which the business model of selling debt to middle-class families has changed over the past 20 years.
The credit card companies and other lenders moved to a tricks and traps pricing model. The fees, the interest rate hikes and all the other surprises in the fine print have left families increasingly vulnerable. I watched hardworking, play-by-the-rules middle-class families collapse financially, and that led me to study the consumer credit market and eventually to the idea behind the consumer financial protection agency.
But what might be the most intriguing (or ‘shocking’) issue of this recent burst of outreach are some of the comments her posts have received. To take just a couple, we begin with YoMamaObama in reaction to the USAToday interview: “Just what we need – another BOOTLICKING, BEDWETTING, LIBERAL MOONBAT LACKEY of our Idiot-In-Chief to head an uneeded federal “CONTROL” bureaucracy with a HUGE TAXPAYER FUNDED BUDGET! THANKS, OBAMA . . . your Socialist Agenda expands by leaps and bounds through all of your bootleg federal bureacracies created to CONTROL the SHEEPLE.” Leaving aside the text-shouting and the misspelling of ‘uneeded,’ one is flummoxed to explain what else ‘the budget’ would consist of except taxpayers’ money. Indeed, one of the expectations of the Constitution is to allow taxation for the general running of the government (sorry to raise the Constitution as a source against the right wing). One can certainly challenge the various ways the taxpayer funded budget is being used, but not that it exists (well, except by inciting rebellion or secession, neither of which the Republican Lincoln took lightly).
‘Concrusher’ (without friends, alas) has another insight worth unpacking: “If Ms. Warren knows so much about banking correctly — why doesn’t she start a bank? With all her rich Harvard pals? And run the other banks out of business?
Answer: because she does NOT know anything about RUNNING a bank. And the average lawyer is INCOMPETENT with a calculator — look how OWE-bama (D) has ^%@# the economy.”
The logic of this complaint is that people who study a topic are, in fact, incapable of understanding that topic. For example, I have studied the medieval crusades a great deal, and I feel confident that I can explain much of the motives and experiences of crusaders – and the dangers of the crusading ideology – to a sentient person. I have not, however, led a crusade nor do I intend to do so. Perhaps Concrusher could find fault with my education as well. More to the point of banking and lawyers (and the stunning oversight that leaves many pundits on the right bankrupt of ideas), banks hire plenty of lawyers to ensure they get their way. No calculators involved, except to multiply the pay rates for the lawyers and how to pass those costs to customers. Now a lawyer is arguing that perhaps the law should (also) protect the bank’s customers. Such socialism…
To the last point, best to leave the last word to the Professor (a title we do not take as a liability): “There is an entire regulatory structure in Washington designed to protect the profitability of the banks. But there is no structure designed to watch out for consumers. The new agency would address that imbalance.”