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Why Not Hire the Woman Who Wrote the Book on the Struggles of the Middle Class?

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Apparently, Obama decided to use his Labor Day weekend radio address not to pay tribute to all that organized labor did to create the middle class in this country, but to try to persuade voters that he is doing enough to save it.

On Monday, we celebrate Labor Day. It’s a chance to get together with family and friends, to throw some food on the grill, and have a good time. But it’s also a day to honor the American worker – to reaffirm our commitment to the great American middle class that has, for generations, made our economy the envy of the world.

That is especially important now. I don’t have to tell you that this is a very tough time for our country. Millions of our neighbors have been swept up in the worst recession in our lifetimes. And long before this recession hit, the middle class had been taking some hard shots. Long before this recession, the values of hard work and responsibility that built this country had been given short shrift.

For a decade, middle class families felt the sting of stagnant incomes and declining economic security. Companies were rewarded with tax breaks for creating jobs overseas. Wall Street firms turned huge profits by taking, in some cases, reckless risks and cutting corners. All of this came at the expense of working Americans, who were fighting harder and harder just to stay afloat – often borrowing against inflated home values to pay their bills. Ultimately, the house of cards collapsed.

So this Labor Day, we should recommit ourselves to our time-honored values and to this fundamental truth: to heal our economy, we need more than a healthy stock market; we need bustling main streets and a growing, thriving middle class. That’s why I will keep working day-by-day to restore opportunity, economic security, and that basic American Dream for our families and future generations.

First, that means doing everything we can to accelerate job creation. The steps we have taken to date have stopped the bleeding: investments in roads and bridges and high-speed railroads that will lead to hundreds of thousands of jobs in the private sector; emergency steps to prevent the layoffs of hundreds of thousands of teachers and firefighters and police officers; and tax cuts and loans for small business owners who create most of the jobs in America. We also ended a tax loophole that encouraged companies to create jobs overseas. Instead, I’m fighting to pass a law to provide tax breaks to the folks who create jobs right here in America.

Aside from being a pretty big snub to Labor (what about your promise to pass EFCA, oh ye savior of the middle class?), Obama’s focus on the plight of the middle class reminded me of one big thing he has thus far refused to do to help the middle class: hire the woman who, literally, wrote the book on the problems faced by the middle class.

I guess Obama thinks he can save the middle class with neither experts on it nor those who have traditionally fought for it?

Elizabeth Warren Drops Harvard Course at Last Minute

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Following closely on the reporting that Wall Street has resigned itself to having Elizabeth Warren recess appointed to head the Consumer Finance Protection Board, the WaPo reports that she has backed out of teaching a Harvard class at the last minute.

“I’m writing to let you know that Professor Jerry Frug will be teaching your Contracts class this term instead of Professor Elizabeth Warren,” law school dean Martha Minow wrote to students on Tuesday, according to an e-mail obtained by The Washington Post. “Professor Warren regrets that she will not be able to teach you this fall and we regret the last minute change.”

Of course, Dawn Johnsen canceled over a year of law school classes before she got hung out to dry by the Administration. So while this is an intriguing development, don’t count any consumer protection chickens yet.

Chris Dodd’s Newfound Concern about Management Experience

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Federal bureaucracies which, according to the confirmation hearing questions he asked of prospective directors, Chris Dodd believes require no management experience to run:

  • Securities and Exchange Commission
  • Housing and Urban Development
  • Federal Housing Administration
  • Export-Import Bank
  • National Credit Union Administration
  • Federal Reserve
  • Federal Deposit Insurance Corporation
  • Office of Thrift Supervision (which oversaw AIG and GE, among other TBTF “entities”)
  • Office of the Comptroller of the Currency

Federal bureaucracy which, according to his recent interviews, Chris Dodd believes can only be led by someone who has what he judges to be adequate management experience:

  • Consumer Finance Protection Board

Call me crazy, but I don’t think Chris Dodd’s newfound concern about management experience stems from either the recognition that his past confirmation negligence led to failures at (in particular) SEC and OTS or his genuine concern that the CFPB wouldn’t effectively protect consumers’ interests if it were led by Elizabeth Warren.

How a Previously Qualified Elizabeth Warren became Unqualified, According to a Previously Progressive Chris Dodd

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July 27: Chris Dodd says of Elizabeth Warren, “She’s qualified, no question about that”

August 9: Katrina vanden Heuvel tweets that several sources have told her Elizabeth Warren would be nominated “next week”

August 12: Warren meets with Financial Services Roundtable President Steve Bartlett and then meets with David Axelrod at the White House to discuss the CFPB position

August 13: Robert Gibbs acknowledges that Warren had been meeting about the CFPB position, but says no announcement would be made in the next week

August 17: Chris Dodd raises questions about whether Warren can manage anything to suggest she may not be confirmable even while he admits she has “a great campaign”

“My simple question about Elizabeth is: Is she confirmable?” Dodd said during a visit Tuesday with The Courant’s Editorial Board. “It isn’t just a question of being a consumer advocate. I want to see that she can manage something, too.”

But when pressed about where he stands, Dodd said: “If the president wants to name her and it goes through the hearing process, then fine, he’ll have my support. But she has to tell me more than just she’s a good consumer advocate or that’s she’s got a great campaign.”

I guess the only question this chronology leaves is whether or not Dodd is acting at the behest of his future employers, the banks, the White House, or both.

Mistaking a Nomination for an Appointment

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Katrina vanden Heuvel set off the twitters with this:

WH (& others) indicate Elizabeth Warren 2 be nominated next week to head Consumer Financial Protection Agency. Kudos 2 all who worked 4 her.

While I agree with vanden Heuvel that those who have worked thus far to make sure Warren gets the position deserve kudos, they don’t, IMO, deserve a celebration, yet.

After all, given what happened with Dawn Johnsen, a rumored nomination is a long shot from getting the position. Especially in the wake of Obama’s recess appointment of Donald Berwick to run Medicare, ostensibly because the health care reform bill presented some urgency that necessitated a recess appointment.

How is fixing our financial system less of an emergency? How, given the number of people still underwater on their mortgages, is this not critically urgent?

And anyone celebrating anything less than Warren in the position is accepting less than the Administration can give, on its own.

According to the bill’s language, the Treasury Secretary has sole authority to build the new agency before it’s ultimately transferred to the Federal Reserve. That includes anointing a person to head the effort on his behalf, and under his authority. The interim head would serve until the President’s nominee is confirmed by the Senate.

That person could be Elizabeth Warren.

And the legislation doesn’t appear to contain a deadline for a Presidential nomination, experts say, which means Warren could start the agency from scratch, put her people in, begin cracking down on predatory and abusive lenders, and initiate a culture that would put consumers’ interests above those of the nation’s most powerful financial institutions.

In short, she could set a tone the agency will follow for the next several years without the administration needing to fight a potentially drawn-out confirmation battle that could stall Obama’s pro-consumer agenda.

Sure, Liz Warren’s appointment might excite a bunch of people in the middle class heading into mid-terms, even as it pisses off the much less numerous bankster class. Even assuming giving the middle class something to be happy about is a bad thing politically, why would incumbency be one?

The Administration can put Liz Warren on the job, today, to deal with the emergency of the ongoing abuse of real people by the banksters. Or, the Administration can decide doing that is not all that important, and it has the time to wait for the do-nothing Senate to take action.

But I would submit that rumors of a nomination are no cause for celebration when we know nothing is preventing the Administration from putting Warren in the position, today. Because anything short of an outright appointment–particularly given the rumors that suggest the WH agrees Warren is the best person for the job–is simply dismissing the urgency of the ongoing financial crisis for the middle class.

Obama’s Relentless Abandonment of Progressive Nominees

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Barack Obama was never a hard liberal nor progressive, whatever the supposed difference between the two really is. Those blinded by hope and change who thought otherwise were imprinting their own desires and beliefs on what was a relatively blank slate, which was probably easy enough to do in the despair resultant from the eight years of George Bush. By the same token, however, Mr. Obama cultivated and encouraged such beliefs; this he worked hard at, and it was critical to him being elected president.

Now if you listened to, and read Obama, and paid attention, you knew he was a centrist who worked by increment, compromise and seeking consensus as opposed to a liberal beacon that would take the country in a new and markedly different direction. Again, that said, the liberals and progressives who served as the ground force, heart and soul of Obama’s candidacy and election had every right to believe he would would at least include them at his table and utilize their talents in his Administration and appointments. There was an implicit deal made in this regard, and Obama purchased on it to his wild success. Now he has defaulted.

I first wrote significantly on the betrayal of the Obama White House toward liberal nominees in relation to the nomination of Dawn Johnsen to the critical post of head of the Department of Justice’s Office of Legal Counsel. The scorn for, and abandonment of, the Johnsen nomination still stands out because of the fact it is clearly established that there were 60 votes cloture on a Senate floor vote for Johnsen’s nomination. It wasn’t that Johnsen could not be confirmed, she absolutely could have been and would have been; it was that Obama did not want her and would not call for a vote.

Johnsen was not only the best person for a critical job, she was a symbol to a critical part of Obama’s and the Democratic constituency. It is far more than Dawn Johnsen however it is a pattern of abuse and scorn the Obama White House relentlessly exhibits to a major portion of the base. Currently the focus of progressives is on the potential nomination of Elizabeth Warren as head of the newly enacted Consumer Financial Protection Bureau. Despite some public platitudes, it is quite clear the Obama Administration does not want a competent crusader for citizens like Warren and, apparently, is working through the cut out of Chris Dodd to see Warren doesn’t get the nod.

Maybe the pressure will get to the Obama White House and Warren will get the post she deserves and would be perfect for; but don’t count on it because Obama, Geithner, Summers, Rahm and the boys on the Obama bus just do not want her. And they didn’t want Christine Romer either, so they let the misogynistic, consistently wrong about everything he touches, Larry Summers push her out. It is becoming a broken record with this White House.

Most distressing to me, because I practice law in the 9th Circuit, is the complete abandonment of two critical liberal judicial nominees, Goodwin Liu and Edward Chen; you may not be aware of because Read more →

The Congressional Oversight Panel Report on Auto Bailouts: Dealer Closures

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I’m reading the Congressional Oversight Panel’s report on the auto bailouts (COP is the oversight entity headed by Elizabeth Warren). I’ll have more to say in a bit, but I did want to point to one of the most coherent explanations for why the manufacturers had to shut down so many dealers.

First, the Chrysler details (footnotes removed):

Chrysler announced that it would retain an “overwhelming majority” of its suppliers and would close 789 of its nearly 3,200 U.S. dealerships. These dealerships employed more than 40,000 people. State governments heavily regulate the relationship between dealerships and automotive companies, usually claiming that close oversight is necessary to equalize the bargaining power of dealerships and automakers. Generally, states only allow an automotive manufacturer to terminate a dealer contract if it has good cause. However, the bankruptcy process provided the automotive manufacturers with greater flexibility in terminating dealership contracts. Congress is currently considering a number of bills to restore the terminated dealers‟ contracts.

Both Chrysler and GM maintain that their dealer networks were oversized and that downsizing was necessary to regain viability. Domestic brands in 2008 accounted for about two thirds of U.S. dealerships, but only 48 percent of new vehicle sales. Chrysler, for example, has less domestic market share than Toyota, but even after its intended closings will have many more dealers [Toyota has 1502 dealers].

In 2008, Chrysler‟s dealers lost on average $3,431. By consolidating dealerships, the companies argue, they can drive more sales through more profitable businesses that can afford to invest in their businesses. The remaining dealers may also be able to negotiate more favorable terms with their floor-plan financers. This may in turn help dealers acquire more stock and sell it to consumers at lower prices, thereby increasing sales and profits for the dealers and for Chrysler and GM.

And here are the GM details:

GM subsequently notified 1,300 of its approximate 6,000 U.S. dealers that they would be closing by year end 2010, aiming eventually to trim its total to about 4,000. GM provided approximately $600 million in financial assistance in return for the dealers‟ selling down their existing inventory over the subsequent twelve months. These payments could vary widely based on each dealer’s situation.

Now, the report misses one key element–the one that dealers complained about constantly when I was doing a US dealer consulting project for an American manufacturer in 2007. If you’ve got a GM Read more →

Elizabeth Warren’s Not Allowed to Know the Super Stress Test Secrets, Either

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I noted the other day that Timmeh (or, according to other coverage of this, Helicopter Ben) told the banks to keep their stress test results to themselves.

Well, apparently, stockholder and taxpayers are not the only ones left out of the secret. So is Congressional Oversight Board Chair Elizabeth Warren. In fact, she’s not even allowed to know the formulas they used to measuring the banks. (h/t My Philosophy at DKos)

Q: Do you have a clear sense of what the overall TARP plan at this point is supposed to do? Are you capable of summarizing what it’s supposed to be doing?

A: No. And neither is Treasury. Treasury has given us multiple contradictory explanations for what it’s trying to accomplish.

There’s a major problem and a minor problem. The minor problem is documentation. I’ve spent four weeks now looking for someone who can give me the details of the stress test so that we can do an independent evaluation of whether the stress test is any good.

We get: "someone will call [you] right back." Only the call doesn’t come.

Then again, I think it’s clear that Timmeh is trying desparately to prevent anyone from assessing whether the stress tests are worth a damn.

Which pretty much tells you what you need to know about them.

Update: Apologies to selise, whose diary on this I just saw.