Tag: financial reform

A shift in focus on the economy?

President Barack Obama may be taking his economic team in a different direction.

Alan Krueger, the Princeton University economist who is viewed as having a pro-labor focus, is expected to be named chairman of the White House Council of Economic Advisors, replacing the more conservative, corporate-friendly Austan Goolsbee.

Such an appointment would be good news, but cannot undo the damage caused by the president’s early ties to the Lawrence Summers crowd. Summers, Goolsbee, Treasury Secretary Timothy Geithner and the rest of the crowd he assembled have been far too committed to the financial system and maintaining the status quo. Krueger alters that mix, but may not have enough juice to offset the Ben Bernanke/Geithner axis.

What we need is an economic team comprised of Krueger, Dean Baker, Paul Krugman and Joseph Stiglitz — which would move the president in a more progressive, pro-labor direction.

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More evidence on big banks’ greed

A special master appointed by the Obama administration says 17 banks handed out “excess compensation” at a time they were receiving bailout money to keep their firms afloat. Translation: Taxpayer money paid executives at failing firms for their failures. Beautiful.

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Holt urges Warren nomination

Here is the letter U.S. Rep. Rush Holt, who represents South Brunswick and several other municipalities in Central Jersey, wrote to President Barack Obama urging him to nominate Elizabeth Warren as the head of the new consumer financial watch dog agency:

Dear Mr. President,

We are writing to ask that you nominate Dr. Elizabeth Warren as Director of the newly created Consumer Financial Protection Bureau (CFPB).

A consumer financial protection body was Dr. Warren’s idea, first expressed in a journal article in 2007, and we can think of no better person to be its first Director. As a professor at Harvard Law School since 1982, she has risen to national prominence in the area of economics of the middle class. Even before the financial crisis, Professor Warren was warning of risky financial products and of lenders who “deliberately built tricks and traps into some credit products so they can ensnare families in a cycle of high-cost debt.” As Chair of the Congressional Oversight Panel she has been an essential voice of reason in the wake of the financial crisis– and an ardent supporter of the Wall Street Reform and Consumer Protection Act.

In her original conception, Dr. Warren modeled the Consumer Finance Protection body after the Consumer Product Safety Commission, describing the main functions of the agency “to establish guidelines for consumer disclosure, collect and report data about the uses of different financial products, review new financial products for safety, and require modification of dangerous products before they can be marketed to the public.” She foresaw the new Bureau as being able to evaluate these products to eliminate the gimmicks that made some far more dangerous than others.

At a time when the nation is still coping with the aftermath of a decade of a hands-off regulatory approach that brought the nation the worst financial crisis in three generations, with mortgage foreclosures still occurring at a rate of one million a year, with nearly one in five Americans either unemployed, under-employed, or who have given up looking for work altogether (while still trying to cope with a mountain of consumer debt), we need a CFPB Director who truly understands the burden that American families are coping with today, and the mission of this new body.

Dr. Warren is simply the perfect choice for that post. We hope you will act quickly to appoint her as its Director.

He’s right.

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Hire watch dog for watch-dog agency

Good piece from ABC News on Elizabeth Warren and the Obama administration (via a heads-up from David Sirota on his Facebook page). Warren is an outsider in Washington and concerned only with the consumers that the agency progressives are pushing her to lead was set up to protect. And she’s disliked by the bankers, which in my book is one hell of an endorsement.

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Financial reform is impressive, but full of leaks

Russ Feingold, the senator from Wisconsin, sums up the failure of financial regulatory reform, unmasking the claim that we have witnessed the greatest overhaul of the system since the Great Depression. It may be the most far-reaching reform, but that’s only because all we’ve done since World War II is back track from the New Deal.

It would be a huge mistake to pass a bill that purports to re-regulate the financial industry but is simply too weak to protect people from the recklessness of Wall Street. That would be like building an impressive-looking dam without telling everyone that it has a few leaks in it. False security is no security at all.

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