The Administration is playing true to its craven form. And it isn’t hiding that sorry fact terribly well either.
The latest public-be-damned ploy by the Obama Administration is the floating the name of Raj Date, a former McKinsey consultant and financial services industry executive currently ensconced in the nascent Consumer Financial Protection, as the possible new head of the agency.
Remember the state of play on the nomination of the head of the Consumer Financial Protection Bureau. That individual is to be in place as of July 21. Even assuming everyone plays nicely, the timetable is now too short to go through the conventional approval process, meaning a recess appointment is the only way to get a permanent leader in place.
The Republicans have taken the stance that they are not prepared to be bound by the law, meaning Dodd Frank, despite the fact that most of what is promised to do was kicked over to studies and rulemaking, which assured it will be watered down to nothingness. 44 Republican Senators wrote a letter saying they won’t approve of any nominee from either party unless the CFPB is gutted reformed. And they are trying to block a recess appointment through the use of a “pro forma” sessions, as they did over the Memorial Day break and presumably will over the July 4 holiday.
But the Republican intransigence works to Obama’s advantage, were he not fundamentally opposed to elevating Warren. He has no excuse for not making a recess appointment. The Republicans’ unwillingness to approve even one of their own legitimates going this route. And the idea of keeping Congress in pro-forma session over its five week holiday later this summer to block one appointment for a critical agency is so absurd that Obama would not look out of line by breaking it (I’m not up on fine procedural details, but my understanding is putting some actual business before Congress during the pro forma session would prove highly disruptive to this strategy).
This jockeying proves yet again how much antipathy both sides have for Warren. And make no mistake about it: the Administration has been clear from the outset that it wants Anybody But Warren in the job.
Team Obama engaged her as an advisor to pretend to the few deluded pro-Obama progressives left in the US that they were serious about reform while getting a mighty inconvenient and popular figure mothballed. But she has embarrassed the Administration by obtusely ignoring its game plan and continuing to look perfectly willing and able to head the agency (notice how the criticisms that she had never run a business and therefore was incapable of building an organization have vanished?). It looked even more foolish when it floated names of possible permanent heads, only to have them say either that they had no interest in the job or that Warren should get it.
The latest attempt for the Administration to get out of the corner it has painted itself in is the Date trial balloon. It’s a sneaky ploy: how can anyone object? Bloomberg, after all, calls him a “former banker“! After McKinsey, he became head of strategy for consumer lender Capital One and later joined Deutsche Bank as a managing director covering financial institutions. But he also headed a think tank (Cambridge Winter Center for Financial Institutions Policy) where among other things he argued against laundering housing market subsidies though the financial system. And Warren picked him to be a senior member of the team, so how bad can he be?
I’ve chatted briefly with Date and seen him make a presentation. He seems perfectly capable in a technocratic way. But he’s not Warren. There is nothing in his background to suggest that he’d be a forceful advocate for consumers. People with a lot of backbone seldom join McKinsey; like Goldman on the investment banking side, it choses candidates who are bright but insecure enough to work hard and play the game. Although there are exceptions, Date didn’t strike me as one, and people who’ve had more extensive dealings with him confirm my instincts.
So the Obama Administration has finally found someone who is housebroken, has checks in lots of the right boxes (he’s a lawyer, yet another plus), would clearly take the job (if he’s willing to work in the Bureau he’s willing to run it), won’t get a lot of media play and will presumably comply with the wishes of Team Obama, which is not to ruffle the banks. The officialdom hopes Warren will act like a good team player and support Date, ending any objections on the left. The corporate Democratic hacks will fall in line with any official move; the pesky pinko protestariat will have the ground cut out from under it by such a clever step.
Or will it? The Administration and the Republicans have wrong-footed every move they’ve taken so far with her, and I suspect this will prove no different. If Warren is silent on a Date nomination or if Darrell Issa gets his wish and has his colleagues rough up Warren for a full day, this could backfire yet again. Both sides seems utterly oblivious to how popular she is, and all the efforts to cut her down to size simply enhance her stature. And they seem to ascribe very conventional motives to her in their latest schemes to put her out to pasture. Surely she’d like to be a Senator!
The Senate is a classier joint than the House, but after Warren’s tangling with Congresscritters not fit to shine her shoes like Patrick McHenry and the cretinous Ann Marie Buerkle, and having 44 Senators write a nastygram that supposedly about the CFPB that was really about her, why on earth is going to the Senate an even remotely attractive idea? She can do more to help consumers back at Harvard than she ever could in the Senate currying favor with the bank toadies (meaning pretty much all of them). And as we’ve discussed earlier, with no big corporate sponsorship in the Democratic pay to play system, she would not get on any important committees either.
What puzzles me is the hysteria about the prospect of a Warren appointment. The CFPB is simply not that powerful; any regulatory measures are subject to the approval of the Financial Stability Oversight Counsel. No other bank regulator is subject to second guessing. She’s also demonstrated she is not going to proceed in a unilateral or uninformed manner. Iin testimony that the Republicans continue to misrepresent, she discussed at some length how she has included the banking industry in her initial effort, that of streamlining and increasing transparency of credit card disclosures.
One possible explanation is that the banks have adopted the Republican tactic of going for total victory. Warren must be mowed down to demonstrate that banks cannot be crossed. Or perhaps banks recognize that they need to continue to abuse consumers to preserve profits, and a CFPB that is at all effective really does represent a major threat to their profit streams.
But many of the reactions are visceral and irrational. Her character and mode of operation are deeply threatening to people in power. She refuses to be deterred and has no respect for party line or authority:
Even though to people outside DC, she appears to be moving forward in a deliberate, systematic manner, her refusal to play by Beltway rules, her apparent immunity to bribes and coercion, makes her a deeply destabilizing force. No wonder they want to get rid of her. Not only might she build an effective agency, but her behavior could prove to be contagious.
This post originally appeared on Naked Capitalism and is reproduced here with permission.