The attacks on TARP Oversight Chairwoman Elizabeth Warren have begun. I have been waiting for the backlash since she started making noise in January. Executives at Citigroup (C) and Bank of America (BAC) dispatched their agent of misinformation Wayne Abernathy. First he went to Politico and, today, it was Thomas Cooley at Forbes who picked up the knife. The rapid appearance of three negative articles (Megan McArdle chimed in uselessly as well) regarding Warren this week is a sign that she has begun to frighten the powerful banking oligarchy and their K Street machine.
Most surprising about the attacks is their weakness. The criticisms amount to claims she has swayed beyond her charter (wrong), that she's a liberal (meaning what exactly?), and that her solution to the banking crisis is ideologically biased.
Those are fighting words so let's do this thing.
From Thomas Cooley at Forbes:
We have much to be angry about regarding banks and bankers, and the temptation to articulate--and thereby fuel--that anger is hard to resist. But crusading of the Warren sort is discredited, ideological in the worst way, and therefore not particularly responsive to the inconvenient facts on the ground.
This is patently false. Her crusade is not ideological. It's about fairness and accountability. It's not liberals versus conservatives; it's the banking oligarchy vs. taxpayers. And her solution to the banking crisis, which you may call seize, terminate, slice, sell (STSS), is independently supported by Fed Governor Thomas Hoenig, Paul Krugman, Joseph Stiglitz, Nouriel Roubini, Nassim Taleb, Simon Johnson and Bill Seidman to name a few. Seidman is a Republican who ran the RTC and says the solution is to seize and chop. Simon Johnson, a Democrat, couldn't get away from banking failures as chief economist for the IMF and his opinions also echo those of Ms. Warren. So on and so on.
Back to Cooley:
But the Congressional Oversight Panel Report seems to have come to a more controversial conclusion. The COP argued that historical lessons show that the most effective response to banking crises has involved a combination of ousting "failed management" and liquidating banks.
Wrong again! The solution (STSS) is actually not the least bit controversial. It goes by many names from pre-privatization to receivership ('nationalization' is the favorite of the banking oligarchy in an attempt to to stifle debate). Read the list of those who agree with Ms. Warren again. They represent the majority, with only the administration's lapdog, Brad Delong, supporting the Obama-Summers-Geithner plan. Apparently, we can now count Cooley among the latter who believe in supporting zombie banks. It's not flattering company.
Clearly, this is Elizabeth Warren's particular crusade against the banks, since a majority of panel members dissented from the direction the report took and two refused to sign off on it at all.
This is not her particular crusade. It is a crusade of many for what is right, fair and intelligent. Taxpayers finally have an ally in our battle against the banking oligarchy and we'll be damned if we allow specious attacks to distract her from her purpose. If these articles are the best her critics have, then we have no worries whatsoever. Ms. Warren is a rather stubborn, goal-oriented type. I would expect her attacks to continue until they are no longer needed.