Obama’s Econ Team Needs Checks & Balances: Choose Elizabeth Warren

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e_warren.jpgFinancial reform legislation has been signed by President Obama — and whether some critics want to accept it or not, this is another huge success for the administration.
While President Obama’s successes could have been bigger in my view, better sequenced, bolder, and done in such a way to boost American jobs and infrastructure — and designed to enhance America’s global position — it is clear that his successes in health care, financial reform, and his nuclear summitry are important landmarks for a presidency trying to work its way out of the deep ruts left by the last administration.
Now that financial reform is enacted into law, the President must nominate a strong leader to run the new consumer protection bureau.
The Bob Rubin-raised and cultivated economic team surrounding President Obama that thinks that a job is a job, in contrast to what Leo Hindery has been saying — high-wage jobs and manufacturing and innovation-related jobs matter more than cheap service sector jobs — needs to be balanced with economic governance approaches that put America’s working middle class first.
The best champion of American consumers and the American middle class on the scene today is clearly Elizabeth Warren.
Warren should be the head of this new consumer protection bureau.
I have just signed Senator Bernie Sanders‘ (I-VT) petition that his team sent me yesterday.
If you feel so inclined, feel free to add your name to the petition. If not, I respect those who see the situation differently — but its about time that at minimum, the White House got a ‘team of rivals’ on economicy policy rather than just a ‘Team of Rubins.’
– Steve Clemons

Comments

21 comments on “Obama’s Econ Team Needs Checks & Balances: Choose Elizabeth Warren

  1. David says:

    Can’t remember which website got the petition to me first, but I signed that sucker immediately.
    questions,
    Thanks for that link. I knew there was a relationship, but I did not know it was that powerful. I remember an article about an Italian (I think he was Italian) benefactor taking some children into his home and exposing them to books, which resulted in a measurable increase in their iq scores.
    My father worked as a carpenter in post-WWII Florida, my mother a housewife until she started working when I was a young teen. My dad was an artist by training, but not a commercially adept artist. Mother was an honor graduate from a rural high school in Kentucky. I knew they both brought intellectual abilities to their children, but it seems the most important thing they brought besides their love was a modest Southern home that was filled with books. All four children were voracious readers, and our home was a veritable garden for the mind.
    We did not have much of anything in the way of what are called luxuries, and to this day I have no real desire for them. They are a distraction. But like my siblings, I am still up to my ass in books. God love my bibliophilic mother and my highly imaginative father (ok, stepfather, but he raised me – miss you more than you can imagine, Dad).

    Reply

  2. Mark @ Israel says:

    I think, it does not matter who will be in charge of that bureau, what matters most is that he/she should champion for the strong implementation of financial reforms that the administration is trying to pursue in order to respond to the financial crisis the country is facing today.

    Reply

  3. Don Bacon says:

    Obama’s not completely against regulations.
    Executive Order 13535 – Ensuring Enforcement and Implementation of Abortion Restrictions in the Patient Protection and Affordable Care Act
    March 24, 2010
    Following the recent enactment of the Patient Protection and Affordable Care Act (the “Act”), it is necessary to establish an adequate enforcement mechanism to ensure that Federal funds are not used for abortion services . . .Barack Obama
    Change you can count on — Senator Obama was rated 100% by NARAL on pro-choice votes in 2005, 2006 & 2007.

    Reply

  4. datroof says:

    Remember “Team of Rivals”?
    He’s pretty much abandoned that charade to empower deregulatory true-believers and Goldman-Sachs execs.
    Ironically, the same crowd that raped, burned and looted the economy in the first place.

    Reply

  5. erichwwk says:

    Linda wrote:
    “While DC Pundit was expressing a deserved compliment to you, Steve, he also described exactly the qualities that make Warren the best choice for her “clear voice, pragmatic sensibilities, and leadership.”
    I concur.
    However, the most important characteristic she possesses (as does Barry Sanders, also an exception among Senators including New Mexico’s Jeff Bingaman), is that she considers “the public interest” – aka is the interests of the non-elites – in the way folks like Robert Rubin, Timothy Geitner, and Larry Summers do not. If she is not if fact appointed, it will because she would insists that the median American be treated fairly, and that government not be used as a scam to favor the privileged. Thus under her leadership we would not get 2K pages of “financial reform”, intending to obfuscate a large number of Chris Dodd type loopholes and exceptions, as part of the Consumer Protection regulations.

    Reply

  6. Don Bacon says:

    drew: “If the government didn’t make hiring people just about the riskiest thing a person could do, I would hire more. No one in this government has ever made a payroll, they don’t get it, they are designing a high-unemployment economy. It is a reflection of USG policy that causes manufacturers to grow through automation. I don’t know anyone who would hire into this environment who isn’t forced to.”
    Listen up, America, listen to drew. “I don’t know anyone who would hire into this environment who isn’t forced to.”
    So employers farm out, hire temps, outsource, sub-contract, enlist contractors, mechanize, computerize, — whatever they can do to avoid hiring one more employee.
    The latest hit on employers? Mandatory medical insurance for employees. The very condition that led so many auto manufacturers, for one example, to move operations to Canada where the government, not the employer, is paying for medical care is being expanded and enforced, and will increase the reluctance of employers to hire anybody.
    Can’t get a job and want to open a B&B in your big house? Get ready for the business license and tax, the zoning review, a health inspection of your kitchen, etc. — just an illustration of how somebody wanting to run a business, big or small, is screwed in the USA.
    As drew says, the high-unemployment economy is USG (and local) policy. In fact the US Chamber of Commerce operates overseas with US ambassadors to outsource US jobs. (Just ask for the evidence and I will provide.) High productivity and high profits through low employment, that’s the ticket.
    Good luck Elizabeth Warren.

    Reply

  7. drew says:

    Thank goodness she teaches at Harvard. I’d be alarmed if she, say,
    were on the faculty of Nebraska or Reed, Northwestern or Grinnell.
    Kudos to this administration for recognizing that the only
    intelligent life in America is domiciled in three or four places
    between DC and Cambridge.

    Reply

  8. drew says:

    Don Bacon, I lack your pessimism about manufacturing
    employment. I reserve mine for the manufacturing
    environment.
    I have been a manufacturer (of software) for 27 years. We in
    America have designed structural barriers to manufacturing
    employment and development. While US manufacturing output
    grows sharply, it should be a scandal that we only produce 3x
    the output of such places as Canada (population of California)
    and Hong Kong. If the government didn’t make hiring people
    just about the riskiest thing a person could do, I would hire
    more. No one in this government has ever made a payroll, they
    don’t get it, they are designing a high-unemployment economy.
    It is a reflection of USG policy that causes manufacturers to grow
    through automation. I don’t know anyone who would hire into
    this environment who isn’t forced to.
    High-value manufacturers (e.g., software manufacturers) are
    further stymied by immigration policy. I could bring into this
    country a dozen Ph.D’s a year but the H1-B lottery thing is just
    that — a lottery. So, because they don’t want to employ a
    coyote to swim the rio grande, and live here illegally, they remain
    in eastern Europe. The only people hiring the coyotes are the
    illiterate and the desperate and the criminal. And our policy
    seems to be oriented to satisfying their requirements, rather
    than the immigration needs of citizens and highly educated,
    would-be, legal immigrants.
    A proportional, rational share of export revenue from the USA
    would be 3x our current take. To achieve that we would need to
    fix K-12 education, remove the litigation risks attendant to
    being an employer, seal the borders so that we could admit who
    we want to admit (i.e., people who do stuff no one else can do),
    stop taxing people for investing in their businesses and the jobs
    that those businesses create, repeal Sarbox and the most recent
    disaster (530 mandates for business people to study!), and …
    game on. Americans work hard and smart, if they’re allowed to
    do so.

    Reply

  9. questions says:

    A little more nuanced a reading of the amazing powers of lobbying….
    “Over the past year, the U.S. Chamber of Commerce has spent nearly $3 million a week in opposition to President Obama’s major agenda items, breaking all previous lobbying records and placing a political bet on the Republican Party.
    But so far, it’s not clear how well the gamble has paid off.
    The Chamber’s formidable lobbying prowess — about $150 million spent since Obama took office — did not stop passage of the administration’s two signature achievements: the health-care overhaul and the Wall Street reform bill the president signed into law Wednesday. The nation’s largest business group has lost battles over, among other things, student-loan legislation, credit-card reforms and a landmark measure that expands workers’ rights to sue for equal pay.
    The business lobby, which vows to spend $75 million or more on November’s midterm election cycle, has also struggled to pick winners in this year’s primaries. More than half a dozen Chamber-backed GOP candidates have gone down to defeat.
    But the Chamber has had success in blocking other pieces of Democratic legislation or, in the case of health-care reform and financial regulation, shaping the final bills to the group’s liking. ”
    http://www.washingtonpost.com/wp-dyn/content/article/2010/07/21/AR2010072106086.html?hpid=topnews
    Further along in the story:
    “The group spent about $1 million on ads in support of the special Senate election of Republican Scott Brown in Massachusetts and announced plans to spend $50 million — now $75 million — on the midterm elections. The vast majority of the group’s spending is expected to favor Republicans. ”
    ***
    But then, Brown was more charismatic and Coakley was a disaster.
    So the causal and correlational aspects are not really clear even here.
    ******
    And then there’s this scary scary scary line that should have us all quaking in our boots:
    “Despite such disagreements, the Chamber remains one of the most powerful lobbying forces in Washington. “The bottom line is, they’ve still got juice,” said Jim Manley, spokesman for Senate Majority Leader Harry M. Reid (D-Nev.). “They still have major influence on Capitol Hill.”
    *****
    Who knew that it was actually the Chamber of Commerce that was one of the most powerful….
    AAARGHHHHHHHHHH!!
    *********
    Today’s WaPo seems different somehow. Maybe they’ve tried to get interesting again?!

    Reply

  10. vics66 says:

    The Real U.S. Government
    Monday, Jul 19, 2010 06:20 ET – By Glenn Greenwald
    The Washington Post’s Dana Priest demonstrates once again why she’s easily one of the best investigative journalists in the nation — if not the best — with the publication of Part I of her series, co-written with William Arkin, detailing the sprawling, unaccountable, inexorably growing secret U.S. Government: what the article calls “Top Secret America.”
    To the extent the series receives much substantive attention (and I doubt it will), the focus will likely be on the bureaucratic problems it documents: the massive redundancies, overlap, waste, and inefficiencies which plague this “hidden world, growing beyond control” — as though everything would better if Top Secret America just functioned a bit more effectively. But the far more significant fact so compellingly illustrated by this first installment is the one I described last week when writing about the Obama administration’s escalating war on whistle blowers:
    Most of what the U.S. Government does of any significance — literally — occurs behind a vast wall of secrecy, completely unknown to the citizenry. . . . Secrecy is the religion of the political class, and the prime enabler of its corruption. That’s why whistle blowers are among the most hated heretics. They’re one of the very few classes of people able to shed a small amount of light on what actually takes place.
    Virtually every fact Priest and Arkin disclose underscores this point. Here is their first sentence:
    “The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.” This all “amounts to an alternative geography of the United States, a Top Secret America hidden from public view and lacking in thorough oversight.”
    We chirp endlessly about the Congress, the White House, the Supreme Court, the Democrats and Republicans, but this is the Real U.S. Government: functioning in total darkness, beyond elections and parties, so secret, vast and powerful that it evades the control or knowledge of any one person or even any organization.
    Anyone who thinks that’s hyperbole should just read some of what Priest and Arkin chronicle. Consider this:
    “Every day, collection systems at the National Security Agency intercept and store 1.7 billion e-mails, phone calls and other types of communications.”
    To call that an out-of-control, privacy-destroying Surveillance State is to understate the case. Equally understated is the observation that we have become a militarized nation living under an omnipotent, self-perpetuating, bankrupting National Security State. Here’s but one flavoring anecdote:
    Command centers, internal television networks, video walls, armored SUVs and personal security guards have also become the bling of national security.
    “You can’t find a four-star general without a security detail,” said one three-star general now posted in Washington after years abroad. “Fear has caused everyone to have stuff. Then comes, ‘If he has one, then I have to have one.’ It’s become a status symbol.”
    What’s most noteworthy about all of this is that the objective endlessly invoked for why we must acquiesce to all of this — National Security — is not only unfulfilled by “Top Secret America,” but actively subverted by it. During the FISA debate of 2008 — when Democrats and Republicans joined together to legalize the Bush/Cheney warrantless eavesdropping program and vastly expand the NSA’s authority to spy on the communications of Americans without judicial oversight — it was constantly claimed that the Government must have greater domestic surveillance powers in order to Keep Us Safe. Thus, anyone who opposed the new spying law was accused of excessively valuing privacy and civil liberties at the expense of what, we are always told, matters most: Staying Safe.
    But as I wrote many times back then — often by interviewing and otherwise citing House Intelligence Committee member Rush Holt, who has been making this point repeatedly — the more secret surveillance powers we vest in the Government, the more we allow the unchecked Surveillance State to grow, the more unsafe we become. That’s because the public-private axis that is the Surveillance State already collects so much information about us, our activities and our communications — so indiscriminately and on such a vast scale — that it cannot possibly detect any actual national security threats. NSA whistle blower Adrienne Kinne, when exposing NSA eavesdropping abuses, warned of what ABC News described as “the waste of time spent listening to innocent Americans, instead of looking for the terrorist needle in the haystack.” As Kinne put it:
    By casting the net so wide and continuing to collect on Americans and aid organizations, it’s almost like they’re making the haystack bigger and it’s harder to find that piece of information that might actually be useful to somebody. You’re actually hurting our ability to effectively protect our national security.
    The Government did not fail to detect the 9/11 attacks because it was unable to collect information relating to the plot. It did collect exactly that, but because it surveilled so much information, it was incapable of recognizing what it possessed (“connecting the dots”). Despite that, we have since then continuously expanded the Government’s surveillance powers. Virtually every time the political class reveals some Scary New Event, it demands and obtains greater spying authorities (and, of course, more and more money). And each time that happens, its ability to detect actually relevant threats diminishes. As Priest and Arkin write:
    The NSA sorts a fraction of those [1.7 billion e-mails, phone calls and other types of daily collected communications] into 70 separate databases. The same problem bedevils every other intelligence agency, none of which have enough analysts and translators for all this work.
    The article details how ample information regarding alleged Ft. Hood shooter Nidal Hassan and attempted Christmas Day bomber Umar Abdulmutallab was collected but simply went unrecognized. As a result, our vaunted Surveillance State failed to stop the former attack and it was only an alert airplane passenger who thwarted the latter. So it isn’t that we keep sacrificing our privacy to an always-growing National Security State in exchange for greater security. The opposite is true: we keep sacrificing our privacy to the always-growing National Security State in exchange for less security.
    * * * * *
    This world is so vast, secretive and well-funded that it’s very difficult to imagine how it could ever be brought under control.
    That’s particularly true given its inextricable intertwining with the private sector: the billions upon billions of dollars funneled from the Government to its private-sector “partners,” which is the subject of the not-yet-published second installment of the Priest/Arkin article. As I wrote when examining the revolving public/private shuttling of former DNI and Booz Allen executive Michael McConnell:
    In every way that matters, the separation between government and corporations is nonexistent, especially (though not only) when it comes to the National Security and Surveillance State. Indeed, so extreme is this overlap that even McConnell, when he was nominated to be Bush’s DNI, told The New York Times that his ten years of working “outside the government,” for Booz Allen, would not impede his ability to run the nation’s intelligence functions. That’s because his Booz Allen work was indistinguishable from working for the Government, and therefore — as he put it — being at Booz Allen “has allowed me to stay focused on national security and intelligence communities as a strategist and as a consultant. Therefore, in many respects, I never left.”
    As the NSA scandal revealed, private telecom giants and other corporations now occupy the central role in carrying out the government’s domestic surveillance and intelligence activities — almost always in the dark, beyond the reach of oversight or the law.
    Long before the Priest/Arkin article, Tim Shorrock has been documenting this sprawling, secretive, merged public/private world that combines unchecked surveillance and national security powers with enormous corporate profits.
    So long as the word Terrorism continues to be able to strike fear in the hearts of enough citizens and media stars — as Communism did before it — the political class, no matter who is elected, will be petrified to oppose any of this, even if they wanted to, and why would they want to? They wouldn’t and they don’t. And it thus grows and becomes more powerful, all justified by endless appeals to The Terrorists.
    That’s why it is difficult to imagine — short of some severe citizen unrest — how any of this will be brought under control. One of the few scenarios one can envision for such unrest involves growing wealth disparities and increasingly conspicuous elite corruption. In The New York Times today, investment banker and former Clinton Treasury official Roger Altman announced that the alleged “tension between President Obama and the business community” can be solved only if the political class is willing to “fix Social Security” — i.e., to slash Americans’ retirement security. Sooner or later (probably sooner), one way or another (probably this way), that’s going to happen. It’s inevitable. As George Carlin put it several years ago, in an amazingly succinct summary of so many things:
    And now, they’re coming for your Social Security money – they want your fucking retirement money – they want it back – so they can give it to their criminal friends on Wall Street. And you know something? They’ll get it. They’ll get it all from you sooner or later. Because they own this fucking place. It’s a Big Club: and you’re not in it.
    That’s really the only relevant question: how much longer will Americans sit by passively and watch as a tiny elite become more bloated, more powerful, greedier, more corrupt and more unaccountable — as the little economic security, privacy and freedom most citizens possess vanish further still? How long can this be sustained, where more and more money is poured into Endless War, a military that almost spends more than the rest of the world combined, where close to 50% of all U.S. tax revenue goes to military and intelligence spending, where the rich-poor gap grows seemingly without end, and the very people who virtually destroyed the world economy wallow in greater rewards than ever, all while the public infrastructure (both figuratively and literally) crumbles and the ruling class is openly collaborating on a bipartisan, public-private basis even to cut Social Security benefits?
    * * * * *
    The answer, unfortunately, is probably this: a lot longer. And one primary reason is that our media-shaped political discourse is so alternatively distracted and distorted that even shining light on all of this matters little. The New York Times’ Peter Baker had a good article this weekend on how totally inconsequential squabbles dominate the news more or less continuously: last week’s riveting drama was the bickering between the White House and Nancy Pelosi over Robert Gibbs’ warning that Democratic control of the House was endangered. Baker quotes Democratic strategist Chris Lehane as follows: “Politics in D.C. have become Seinfeldesque. Fights about nothing.”
    If you read and write about politics full-time and are thus forced to subject yourself to the political media — as I am — what’s most striking aren’t the outrages and corruptions, but the overwhelming, suffocating, numbing stream of stupidity and triviality that floods the brain. One has to battle the temptation to just turn away and ignore it all. Every day, day after day, is consumed by some totally irrelevant though distracting melodrama: what Sarah Palin wrote on her Facebook page, some “outrageous” snippet of a comment made by John Boehner or Harry Reid, some “crazy,” attention-attracting statement from some fringe idiot-figure or TV blowhard that is exploited for superficial partisan gain or distraction value (hey, look over there: I think Michelle Bachmann just said something outrageous!!!!). I can’t recall an incident that better captures our political culture than this, from a Politico report on one of last week’s fascinating Royal Court dramas — the insult-trading between Palin and Mitt Romney:
    Asked about the comments by POLITICO, a longtime Palin aide unloaded on Romney

    Reply

  11. Don Bacon says:

    Translation: What Drew is saying is that while US manufacturing output has increased, total manufacturing employment has dropped like a rock and there’s no hope it will ever recover.

    Reply

  12. Drew says:

    There’s no correllation between manufacturing employment
    declines and the import of goods and services. Explanatory
    charts are here:
    http://www.ourfuture.org/blog-entry/2010020825/no-
    virginia-us-manufacturing-isnt-dead
    and here:
    http://seekingalpha.com/article/133188-u-s-manufacturing-
    more-output-with-fewer-workers
    The collapse in manufacturing employment reflects a secular
    productivity-per-employee boom: 250%+ since the mid-1970s.
    Far from collapsing, which is a common theme, American
    manufacturing output describes a very steep growth curve. The
    latest recession seems to have accelerated, however, the
    depopulation of these manufacturers.

    Reply

  13. Don Bacon says:

    Elizabeth Warren is part of a Democrat activist mindset that people aren’t smart enough to look after their own money and not wise enough to read a contract, therefore the government should help them do it somehow. If you liken the situation to sex (I often do) then it would be like regulating it instead of educating people about it.
    The Dem leadership has a problem with her because, as somebody commented on another blog, “she will hold Wall Street’s feet to the fire.” Uh, uh, that’s naughty
    But, whatever, she can’t do much harm. People that run up and maintain credit card debt should have a “kick me – I’m stupid” sign on their backs but if she wants to put the 25% interest rate and ‘this interest rate may increase’ in bold print that’s fine with me.
    Regarding US manufacturing jobs, forget it. Most other corporate-related jobs too. They’re going, going, gone. There are dozens of out-sourcing companies in the US that can get a task done in another country at a fraction of the price, everything from accounting to manufacturing to customer service. It’s even hard sometimes to find a check-out clerk at WalMart — they have machines to do it.
    The places to find a job are becoming more restricted: Direct sales, clerks, warehouse, medical (big) and education. Anything to do with government is good. The state and federal governments now constitute one-quarter of the civilian work force and growing. Federal civilian employment alone has increased about twenty-five per cent in six years, plus there’s three million in the regular and reserve military forces — that’s a growth industry for sure.

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  14. The Pessimist says:

    As I had asked just the other day, how much of this administration

    Reply

  15. jonst says:

    “team of rivals v a team of Rubins” Very good Steve, very good. I like that.
    You can just imagine, this is kind of person Emanuel hates. The idealist. The ivory tower intellectual. The person who just does understand how the game is played. Leave aside none of these things is true about Ms Warren, I will bet this is the way Emanuel thinks. IOW….it’s employing and off shoot of the sophomoric Godfather cliches that Emanuel thinks makes him look tough, ‘it’s not just policy, it’s personal’

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  16. DonS says:

    Word is that dems are giving little support to Ms Warren, which is even more reason to sign the petition. How long has it been since Congress has been unequivocally on the side of the consumer? The deck is stacked in favor of the corporations; one could argue that the deck is owned by the corporations.
    The Obama WH needs to lead on this, not toss it to the squishy Congressional winds as it is so fond of doing.

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  17. Linda says:

    While DC Pundit was expressing a deserved compliment to you, Steve, he also described exactly the qualities that make Warren the best choice for her “clear voice, pragmatic sensibilities, and leadership.”

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  18. P.S. Mueller says:

    Clearly, at the end of the day, the fear of Ms. Warren’s sense of
    justice will compel many pundits to repeatedly utter phrases like
    “clearly, at the end of the day.”
    More news here:http://www.howdyland.com/dept-of-frivolity/

    Reply

  19. DCPundit says:

    Steve,
    Signed the petition.
    Thanks as always for your clear voice, pragmatic sensibilities, and leadership.

    Reply

  20. nadine says:

    What does it matter who is on the President’s economic team? As far as one can make out, all the decisions have been political.

    Reply

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