Sent to you by jcase via Google Reader: Obama Still Desperately
Seeking Anybody But Warren to Head New Consumer Agency via naked
capitalism by Yves Smith on 6/9/11

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

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