Such was the headline in Sunday’s London Observer.
The Observer’s correspondent went on to note that a call would be made this week by the U.S. watchdog “for the removal of top executives from Citigroup, AIG and other institutions that have received government funds in a damning report that will question the administration’s approach to saving the financial system from collapse.”
You might suppose that the U.S. watchdog in question was Timothy Geithner, Obama’s Secretary of the Treasury. Geithner did, after all, make noises on Face the Nation Sunday about how the administration “would consider” removing top management and boards at troubled banks that are “beyond repair,” in the words of the Wall Street Journal.
But, no, what Geithner was doing was little more than an end-run in advance of yesterday’s report from the real U.S. watchdog.
Meet Elizabeth Warren.
The Harvard Law professor—she’s an expert on consumer lending laws (which is to say she’s the bane of the credit card industry)—is the chair of the five-member Congressional oversight committee monitoring the Troubled Asset Relief Program (TARP).
The committee’s 151-page “April Oversight Report,” issued Tuesday, comes on the heels of the six-month anniversary of the passage of the Emergency Economic Stabilization Act of 2008,” and gives plenty to pause over, beginning with the simple, obvious question: “What is Treasury’s strategy?”
The report lays out—as best it can given Treasury’s deliberate, dogged opacity—what that strategy is. As Paul Krugman has long pointed out, the current bank-subsidization plan is little more than the Japanese “Zombie Bank” strategy, repackaged. But the report also makes the case for alternative plans—like liquidization and conservatorship.
No wonder the two right-wing members of the Oversight Committee—the know-nothing former New Hampshire Senator John Sununu and the egregious East Texas yahoo Congressman Jeb Hensarling—voted against the April report.
But what did anyone ever expect of politicians such as Sununu and, especially, Hensarling?
Since the oversight report makes it abundantly clear that almost nothing that Treasury has done has been in the least bit transparent and since the true “total value of all direct spending, loans and guarantees provided to date in conjunction with the government’s financial stability efforts” amounts to more than $4 trillion, you might think that the administration, Congress and, especially, the establishment media would be listening to what the People’s watchdog has to say.
So far, apparently not.
Well, if the establishment media won’t give it to you, we will.
Read the entire report, if you can. Read the short (3-page) executive summary, if you can’t. But, in any case, listen to what Liz Warren has to say in this extraordinarily honest, fair-minded, and straightforward eight-minute video introduction. The oversight report itself repeatedly calls for clarity. Here it is (PDF).



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RE “Meet Elizabeth Warren.”
Note the dates of the interviews; almost 2 years ago.
Oh, and they are ‘delaying’ the results of the ’stress tests’
http://www.reuters.com/article…..407?rpc=33
on the banks, ostensibly because of concerns with the stock market. My guess is they don’t have the ’short sales’ procedures in place they want before releasing the results.
Hi, John–
Glad you brought this to my attention. I can’t believe our government doesn’t pay more attention to Liz Warren. It’s as if she didn’t actually have an official title and was just some, oh gosh I dunno, blogger or something.
It feels as if there’s a deliberate effort to marginalize her and the Oversight Committee’s work, doesn’t it? And I dare say there is too.
I’ve often wondered who exactly chose Liz Warren for the job. Barney Frank maybe? I would guess that he’s her Congressman; and he’s surely familiar with her having testified before House Financial Services in the past. But, in any case, someone made a helluva good choice. Warren is smart and independent–neither a creature of the Beltway nor of Wall Street–and I suspect that that’s why her critics really fear her.
Mind boggling to hear Geithner and treasury continuing to talk about transparency as if they are working on it. Heard Pelosi on L.King talking about transparency as if it has already been accomplished!
Rachel Maddow has been interviewing Liz Warren a lot on her MSNBC show. We need more like Liz!
FunnyDiva
Agreed – I heard her in a radio interview (Terry Gross, I think), and she was refreshingly bright, plainspoken, and consumer-oriented. She was talking about credit card companies’ demonstrated strategies for getting us to stumble (incur late fees etc.)
At one point she gave some 3Ls copies of a junk mail card app she’d received, and the lot of them couldn’t figure out the true cost of credit/fee structure. Not quite Feynmanesque, but a hell of a lot more direct than anything I encountered in law school!
I noticed that there were two members of the committee who would not sign off on the latest report. (Nieman and Sununu.) Sounds like she’s starting to hit some nerves. And shame on those two committee members.
Go Elizabeth!!
From the COP web page:
[snip]
COP is empowered to hold hearings, review official data, and write reports on actions taken by Treasury and financial institutions and their effect on the economy. [end]
So we have a reactive watchdog reporting to a reactionary and bi-polar Congress. Net effect; lots of reports and harangue from Liz and just as effective as Krugman in changing Obamas course as the USS Geithner heads towards the rocky shoals of our economy.
Yes, and that’s a very apt way of describing Warren.
Loved the story about the 3L class project. Sounds just like her too.
I’m guessing that whomever chose Warren was not expecting that she would actually do the job. That’s not usually the MO around that town.
On a related note, I sent a letter to both senators, etal a few weeks back calling for “full-blown hearings” into the bank bailout/heist. I just got a form letter back from DiFi’s office explaining why she voted for the American Recovery and Reinvestment Act of 2009. Yeah…she and her staff are really paying attention.
Idiots.
Well, no. I disagree. Like any really good lawyer, she’s building a record. That alone is extremely important, both to historians–and to prosecutors.
the establishment media would be listening to what the People’s watchdog has to say.
Doing a google news search for “Elizabeth Warren bank bailout” yeilds remarkably little coverage from print and TV news. Most of the articles are online only.
Reuters says:
This is what a so-called “scholar” says – the best estimate is the one that’s plausible but not scary.
It’s no wonder no one takes people like Warren seriously. With mush like this serving as economic analysis, there’s always going to be someone who serves the mush in a flavor you like.
Why would anyone believe her? Everyone knows girls don’t excel at math. We need to listen, and obey, the men who know best.
Like the pushback to lifting the lid on the Torture Papers and the illegal surveillance programs, so it goes with the true history of the financial crisis.
This is where I take serious issue with Obama. The country needs to know what happened, why it happened, and who was responsible for its having happened. People need to be indicted for what was clearly criminal behavior.
All this “Let’s just look forward” business is patently cowardly behavior.
Yes, indeed. Harken ye to the words of Brother Summers!
The Five Million Dollar Man.
Good point.
Sincerely, Larry Summers.
That is true, just ask Larry Summers!
Anybody else of the opinion that Congress was betting on opacity, and concluded that they could so obscure reliable findings that the TARP review would be unable to come to any conclusions at all?
Dugg right here — please join me!
This is hilarious.
DuhFi is bought and paid for. Always was. Always will be.
Dugg
Five million dollars for one day of work a week for a year! No wonder he’s learned all about the hedgetrimming industry. He’s been there twenty percent of the time.
Trillion here, trillion there. What the heck.
Yes, I forgot to mention that part.
Good catch, thanks.
“All this “Let’s just look forward” business is patently cowardly behavior.”
How, exactly, can we construct an effective way forward if we have no idea from whence we’ve come? That’s just plain stupid.
Frankly, Obama is beginning to strongly resemble “Bush Lite” to me. I never expected a panacea, nor did I expect to agree with everything he did. However, there are some huge issues here with which I take great exception. Accordingly, I am compelled to call it as I see it.
Digggged.
And her staff is extraordinarily adept at replies that are neither timely nor relevant to a constituent’s initial inquiry. I can tell when they’ve sat an intern or someone else quite inexperienced down in front of the email machine: the letters come thick and fast for about one day, in no particular order, about issues I’ve never raised with her, sometimes two or three at a time.
One time I called the office to explain how foolish this looked, and was asked, “Well, did you email our office multiple times about this issue? We would email you back once for every time you emailed us! Sometimes people send lots of emails without remembering.”
In other words, it was my fault.
Yup. I did call her office when I got the latest bullshit screed. After they finished saying, “hunh?”, I explained what the point of my original letter was and also indicated that I didn’t expect too much since “she’s basically a closet Republican”. I got another “hunh” to that one, of course.
They’re all over it.
Wait. I thought it was just $250 thousand. Was I misinformed?
“In other words, it was my fault.”
Makes sense to me.
I’ve been doing a little more research about the so-called Pecora Committee or Pecora Commission of the Thirties. Officially, it was the Senate Banking and Currency Committee, first under the Republicans in 1932, but effectively, under the Democrats from 1933 onwards. Pecora was a hardbitten former Manhattan assistant D.A. And it was he who turned a non-investigation into something special. As Ron Chernow points out in his classic study, “The House of Morgan,” the committee members–Republicans and Democrats alike–feared that their own fat cats on the Street would be outted. (Does this sound familiar?) Pecora, once brought in, broke the logjam through force of personality and intelligence.
Here’s the takeaway: WE NEED A PECORA COMMITTEE. NOW.
For anyone interested, I strongly recommend the chapter devoted to this story in “House of Morgan.” The chapter is entitled “Midget,” after the best-remembered incident of the hearings: When a Ringling circus midget hopped into Jack Morgan’s lap. Strange to say, it actually helped “humanize” the old banker, at least in the public’s eye.
Per capita
Great points and I do believe that the Obama Admin. will do the right thing, when they are faced with undeniable facts. I think he is walking a fine line right now and trying to keep cards close to the vest, but I do think all hell will break loose on a number of fronts, fairly soon.
Loved Bill Black’s analogy on the Moyers’ show about a plane crash and just accepting it and moving forward, without trying to understand what happened. One could think it was an oblique reference to the need for a new investigation of the events of 9-11-01?!
DiFi’s one of the richest people in Congress, which is a pretty rich club these days. She’s not bought and paid for. You don’t need to buy off one of your own.
“Here’s the takeaway: WE NEED A PECORA COMMITTEE. NOW.”
That was the substance of the letters I sent to my two senators, the speaker, the senate majority leader and Frank’s office. Congress needs heavy constituent pressure on this. Without it, they will do nothing.
And speaking of Frank, he’s every bit the enabler that the rest of these hacks are. The “hearings” he held were an absolute joke, nothing more than throwing a bone to “the great unwashed”.
You hear that Barney?
Oh. I get it now. Thanks for the clarification.
I just watched the video.
Warren should be Obama’s Treasury Secretary.
I hope you’re right I grant you that Obama is walking a fine line. We’ll see.
And, yes, the Black interview on Moyers’ show was terrific, wasn’t it?
Seconded.
We need a Spitzer Committee, is what we need.
Jane is upstairs!
White House May be Dictating Message, But Not to Us
If Obama doesn’t change course very soon, this could very well destroy his presidency.
She’s really special. Obama would do well to have a sit-down with her and get some straight-up advice–for a change.
This is what I fear most and what I pray god will not happen. This country can’t afford to have that happen.
Her ability to explain things is really extraordinary, I’ve never seen anything like it. Perhaps it’s because she’s worked so much on the consumer side of things that she understands how to speak clearly without talking down.
Anyway, she’s the antidote for what ails the Obama Economic Team.
Just caught this quote from Chuck Schumer on the need for investigation of the Red Cross report on torture at Guantanamo and the black sites, saying he would support a Department of Justice investigation.
Well, she sounds like a Texan to me!
A good Texan, that is. The old-fashioned Democratic Texan of the Bill Moyers variety. Which is to say smart, decent, thoughtful but quietly tough.
She’s my hero.
Oklahoman, Educated in Texas. Shutting up now. But she’s my hero, too. Fearless.
Pups!
Work awaits. I must go. But do continue the conversation. This has been an especially good one, IMO. Or check out Jane.
We’ll speak again soon.
Best to you all. j
Oklahoman!
Noooooo!
Well, we’ll forgive her her sins.
She’s still my hero.
Cenk Uygur also interviewed Bill Black, and though similar points were made, there seems increased urgency.
http://tinyurl.com/dla55j
William K. Black on Geithner: “The Guy Has a Track Record of Failure Everywhere He’s Gone”
Cenk Ugyur
Posted April 7, 2009 | 02:22 PM (EST)
We recently had James K. Galbraith on our show and since I think he is one of the top economists in the country and he has been critical of the Obama administration bailout plan, I asked him if he could pick one person he would put in charge instead who it would be? He said William K. Black.
So, we just had Professor Black on the show to get his perspective on the bank bailout plan. Remember, he was one of the top regulators who helped to successfully steer us out of the S&L crisis. He is also the author of “The Best Way to Rob a Bank is to Own One.”
His analysis of the Geithner bailout plan was devastating. First, you must understand this point he makes – if the banks are not insolvent, why do they need a $2 trillion bailout?
Of course, they’re insolvent. That’s why we have to put so much money into them in the first place. To claim otherwise, as the entire Obama Treasury Department has, is at best incredibly disingenuous. Prof. Black then goes on to explain that Geithner’s plan is “the worst possible strategy” because it is a “fundamental misdiagnosis of the crisis.”
continued at link above~~
Washington & New York, Hopelessly Corrupt.
Thank you John, come back again soon!
emptywheel is upstairs at the front page!
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