Tis the season

[Political Waves]

Life has been up, down, up, down this last week and I'm certainly getting a gutful of the healthcare community -- my Dad's been in ICU, step-down, now he's back in ICU. And while I'm grateful for the presence of dedicated nurses and aides, what I know about the system sours me for this process. Overheard niggling about the possibility of Obama 'gutting Medicare' [eliminating nonessential duplications and waste] for elders while watching end-of-life drama take place leaves me near nuts. You can't escape politics, dearhearts ... it dogs you wherever you go.

I have no idea when this process will end, or when I can be more attentive ... but luckily this coming week will have you busy with Holiday and hopefully all will be calm. Having been too preoccupied to suffer bruising and choking from following the Palin coverage these last days, I certainly see the benefit of avoidance.

The healthcare debate will begin next week, after 60 Dems and 2 Independents actually held together on Saturday long enough to stop Republican cloture, which they've winnowed into an art form. For instance, after holding up unemployment extensions, now they're blocking Chris Dodd's attempt to freeze credit card interest rates over the holidays; the CC folks are spiraling rates and fees in advance of next years reform deadline.

Chuck Schumer sez the Dems will go it alone on healthcare if they have to ... and they'll have to. The Coat hanger Clause that the House adopted is watered down in the Senate proposal, but the Catholics are howling ... funny how it's always some small slice of humanity leading the rest of us around by the nose. Squeaky wheels get grease ... which is why we have to squeak twice as loud!

And over the top of this issue, we find the economic problems of the nation driving the conversation. Not all of us are sick, but most of us are hurting financially or worried we will be. Jobless recovery isn't recovery -- and we're caught in the crunch of era-turn on this one; manufacture is not coming back to this nation as it has before ... we need a new way of proceeding with this. Which is why ALL the threads lead back to system change: educational, environmental, health, yadda. Business must learn to accommodate, not vice-versa. But wrenching the power out of their hands ain't easy.

And that's why I'm pleased that we're going to scrutinize the Fed. About damned time. This demand brings together diverse players, like Dennis Kucinich and Ron Paul ... and, dare I add, me. At the heart of the system, these entrenched practices need to come into the light of day. In the coming months, I expect we'll learn a lot about how we got in this miserable spot ... and let's hope some exceptional souls step up to lead us out of it. You can read more about one of them, Elizabeth Warren, last.

Tis the season to be jolly, but it's pretty grumpy out there ... alas. As Thanksgiving marks the beginning of the Christmas season with all its distractions, the economy will be more a dirge than a symphony of background noise in the coming weeks -- until Wall Street announces the amount of its bonuses this year ... then it will sound like Thunderdome out there!

A few worthwhile reads on the economy, today, starting with an Andy Borowitz to take the edge off ... and my best wishes for a uniquely American holiday brimming with family, warmth, gratitude and heart.

Jude


Facing Criticism, Goldman Sachs Cancels Plan to Dance Around Bonfire of Thousand Dollar Bills
Andy Borowitz, BorowitzReport.com via Huffy
November 22, 2009
http://www.huffingtonpost.com/andy-borowitz/facing-criticism-goldman_b_367079.html

    
NEW YORK - Facing mounting criticism from the public and the media, Goldman Sachs announced today that they would cancel plans to dance around a bonfire of thousand-dollar bills.

The company had planned to perform a pagan dance around the inferno of blazing thousands while roasting a suckling pig as part of their year-end bonus celebration, but howls of protest forced them to reconsider, said Goldman chief Lloyd Blankfein.

"There's a consensus out there that this dance -- a jig, really, to be precise -- was in poor taste," said Mr. Blankfein, who said the company would instead pledge over $100 to help small businesses.

The Goldman chief said that the company would now have a more modest holiday celebration, including such activities as doing a line of coke off a hooker's ass. ++


Fed Under Fire As Public Anger Mounts
Tom Raum, AP via Common Dreams
Sunday, November 22, 2009
http://www.commondreams.org/headline/2009/11/22-5

WASHINGTON - Suddenly the Federal Reserve is everybody's punching bag.

Strip the Fed of its bank regulation powers, some in Congress are demanding. Get probing audits of its behind-the-scenes operations, others say.

The chairman of the Federal Reserve Board is always fair game for criticism and second-guessing, usually over interest rate actions. But this year the criticism is much broader as Congress responds to widespread public anger that the Fed bailed out Wall Street but not ordinary Americans, and with unemployment in double digits.

Former Fed Chairman William McChesney Martin Jr. famously said that the central bank's job was to yank away the punchbowl just when everybody is starting to party. And while Fed Chairman Ben Bernanke has signaled the Fed will keep interest rates low for now, a round of higher rates inevitably will come.

The Fed finds itself both the punchbowl keeper and the punching bag. Imagine the outcry when it does begin to crank up rates - perhaps just ahead of next year's midterm elections.

Fireworks seem likely at Senate confirmation hearings early next month on President Barack Obama's nomination of Bernanke to a second four-year term as chairman.

Many economists and Fed watchers say congressional efforts to rein in the Fed's powers could interfere with the central bank's ability to help guide the fragile economy to recovery.
The Fed's very independence and its unique ability among U.S. institutions to create money out of thin air enabled it to act quickly to stabilize the nation's financial system after it froze up last September after the bankruptcy of the Lehman Brothers investment house, Fed backers say.

"It might have been the Fed's finest moment when it had to jump into the market," said David M. Jones, a former Fed economist and president of DMJ Advisors, a Denver-based consulting firm. "We still have to wait to see how effective the Fed is in its exit strategy and whether it can keep inflation in check. But this badgering by Congress, even if there is populist sentiment, is inappropriate."

The Fed's aggressive intervention also set the stage for the current criticism. Many lawmakers question whether the Fed's money machine has mainly benefited financial markets and not the broader economy. Lawmakers are also peeved that the central bank acted without congressional involvement when it brokered the 2008 sale of failed investment bank Bear Stearns and engineered the rescue of insurer American International Group.

Bernanke, first appointed by President George W. Bush, has worked closely with both Treasury Secretary Timothy Geithner and Bush Treasury Secretary Henry Paulson in confronting the worst financial crisis in decades. Geithner also has gotten his share of congressional wrath, mainly for his administering of the $700 billion bank bailout fund.

"In the past, the Federal Reserve was held in very high esteem," said Rep. Ron Paul, R-Texas, a libertarian who twice ran quixotic presidential campaigns and remains a darling of skeptics of Washington. Now, it's "the source of our problem," suggests Paul, author of the best-seller "End the Fed."

Usually an outlier, Paul suddenly has found an army of at least 307 House colleagues and 30 senators marching behind his legislation to subject the Fed to intense scrutiny by Congress' Government Accountability Office. The House Financial Services Committee endorsed Paul's approach 43-26 last week over objections from its chairman, Rep. Barney Frank, D-Mass.

The bill would authorize Congress to audit not only the Fed's lending programs but its basic decisions to set monetary policy by raising or lowering interest rates. Paul has been introducing a version every year since the early 1980s, but this is the first time it has garnered any serious attention.

Senate Banking Committee Chairman Chris Dodd, D-Conn., who will preside over Bernanke's confirmation hearings, has proposed legislation that would strip the Fed of its bank-regulation authority and give the Senate a role in selecting the 12 regional Federal Reserve bank presidents.

Dodd says his measure would return the Fed to its core mission of setting monetary policy, claiming it proved itself "an abysmal failure" by not cracking down on risky lending practices that led to the financial meltdown.

Dodd is in an extremely tight battle for re-election, even though he has served in Congress for 35 years.

"I don't think it ever hurts to have a member of Congress stand up and denounce the Fed. There is a lot of anger out there, and this is basically a therapeutic gesture," said Ross Baker, a political scientist at Rutgers University.

Still, Baker said, it probably isn't wise to tamper with the formula that makes the Fed "very much an anomaly in American government. It's independent, it has to be. You don't want the Fed to be under the control of the president. And it kind of sits out there - not in the executive branch, not in the legislative branch, not in the judicial branch. Sort of its own little element in the separation-of-powers constellation."

While the Fed is subject to some congressional oversight, its decisions don't have to be ratified by the president or Congress. Fed officials are not paid with money appropriated by Congress.

Should Bernanke be worried?

"Not only should be worried, he's clearly ratcheted up his game in terms of his communications with Congress," said Norman Ornstein, a senior fellow at the American Enterprise Institute.

Ornstein said the Fed bashing this time is different from before, with "a broader base of support. And it's coming from people who in the past would not have hit the Fed. There's a lot of populist anger out there - on the left, in the center and on the right. And politicians are responsive to that." ++


Corporations: The Real Reason Obama is not Making Much Progress
Before you can appeal to America's voters you have to appeal to the corporations
Johann Hari, Independent/UK via Common Dreams
http://www.commondreams.org/view/2009/11/22-6

Almost a year after Barack Obama ascended to the White House, many of his supporters are bemused. His healthcare bill is a hefty improvement but it still won't provide coverage for all Americans, and may not provide a public alternative to the over-charging insurance companies - if it passes at all. His environmental team is vandalising the vital Copenhagen conference by saying the US - the single biggest emitter of warming gases - will not sign up to any legally binding restrictions there. He has placed the deregulation-fanatics who caused the New Depression, like Lawrence Summers, in charge of the recovery. Despite the real improvements on Bush - such as the end of torture, the resumption of stem-cell research, and opposition to the coup in Honduras - many people are asking: why he is delivering so little, so slowly?

A pair of seemingly small stories about the forces warping American politics can help us to answer this question. At first glance, they will seem like preposterous caricatures, but the facts are plain. The institutions that are blocking progress on all these issues - Republicans in the Senate, and the mighty corporate lobbying machine that bankrolls both parties - have rallied over the past few months to defend two causes with very little popular support in the United States: rape and slavery. No, really. If we begin to explain how this came to pass, then we might see why the American political system is malfunctioning so badly, even after a landslide victory for change.

Let's start with rape. This story begins in Iraq in 2003. The private military contractors sent by the Bush administration to guard the oil pipelines didn't want to get bogged down in expensive legal cases if anything went wrong. When it came to Iraqis, the Bush team simply exempted them from all Iraqi law, in a move so sweeping one Senator called it "a license to kill". But what about if their employees attacked each other, or other Americans? The private companies insisted all their employees sign contracts saying that, whatever happens to them, they will settle it in in-house, through "arbitration". Why? While representing the company at a real legal trial costs hundreds of thousands of dollars, an arbitration panel costs a few thousand. It saves cash.

This policy came, however, with a different price tag. According to her later sworn testimony, Jamie Leigh Jones - a 20-year-old working for the contractor Halliburton/KBR - was hanging out with co-workers one night in Iraq when her drink was spiked. When she woke up, she was haemorraging blood from her vagina and her anus. Her breast implants were ripped. The damage was so severe she later needed reconstructive surgery on her genitalia. She surmised she had been gang-raped by the seven men she had been drinking with. When she approached Halliburton/KBR, she says they locked her in a metal container with no food or water for 24 hours. A doctor came to see her wounds and took DNA evidence, although it was later "lost." A guard took pity on her and loaned her his cell phone. She called her father, who called the American embassy - and only then was she released.

In an Iraq that was collapsing all around her, there was no chance of the Iraqi police investigating. Halliburton/KBR insisted that her contract required the alleged gang-rape to be addressed by the company's private arbitration process, forbidding any claim in the American courts. (If this was how they treated blonde English-speaking American girls, what did they do if Iraqis said they had been abused?) After Leigh Jones went public, many other American women came forward to say they had similar experiences working in Iraq. Her legal team argues the refusal to allow rape to be pursued through the courts created a climate where it was more likely to happen.

The Democratic Senator Al Franken, when he heard about this, was horrified, and tabled a simple amendment to the law. It demanded that no company that prevents rape victims from having their day in court should receive taxpayers' money any more. Rape is rape. A majority of Republicans in the Senate - including John McCain - voted against the amendment. Why?

The private contractors are major donors to the Republican Party, but the Senators claim this didn't affect their judgement. No - they said that Franken's proposal was a "vendetta" against Halliburton/KBR with "political motives". Franken pointed out any company trying to stop rape victims getting justice would be treated exactly the same by this law. The Republicans ignored him. They voted to maintain a system where some rape is not pursuable in a court of law.

At the same time, a group of Democratic senators have tried to amend the latest customs bill to ensure that nothing produced by slaves should be sold in the United States. It sounds uncontroversial - as uncontroversial as punishing rapists, in fact. Yet corporate lobbyists are militating behind the scenes to oppose it. As the private subscription-only newsletter "Inside US Trade" reported: "Business groups are worried by the potential effects", and a source tells them there will be, "a push from lobbyists closer to the Finance Committee mark-up of the bill... US industry groups and foreign governments [ie those that use slave labour] could form ad hoc coalitions to help send a united message." They will fight for their right to use slave labour.

These examples are extreme, but they reveal a powerful undertow that is at work on all political issues (and both main parties) in the United States. To see how, you have to understand two processes. The first is the nature of corporate power. Corporations are structured to do one thing, and one thing only: to maximise profit for their shareholders. No matter how personally nice or nasty their CEOs are, if they put anything ahead of profit, they will be sacked, and replaced by somebody who doesn't. As part of a tightly regulated market, this can be a useful engine for growth. But if it is not strictly reigned in by the law and by trade unions, this pressure for profit will extend anywhere - from trashing the environment to rape and slavery, as these cases remind us. The second factor is the nature of the American political process today. If you want to run for elected office in the US, you have to raise a fortune from corporations or the super-rich to pay for TV advertising. So before you can appeal to the voters, you have to appeal to the corporations. You do this by assuring them you will serve their interests. Once you are in office, you have to keep pleasing them at every step, or they won't pay for your re-election campaign. This two-step overwhelms the positive instincts the individual politicians may have to do good - and drags the US government further and further from the will of the people.

Obama had to climb through this system, and he is currently imprisoned by it. It explains his relative failure so far. Healthcare is proving so hard because the insurance companies are paying both Republicans and right-wing Democrats in Senate to thwart any attempt to provide universal healthcare coverage. Yes, it would save the 17,000 Americans who die every year because they lack insurance but it would depress their profits. Reducing carbon emissions is proving so hard because the oil, coal and gas companies are paying Senators across the spectrum to crush any moves to reduce oil, coal and gas use. And on, and on.

So far, Obama has tried to co-opt the corporations into his agenda by ensuring they will profit from any changes, but this inevitably waters down the proposals, often to the point of uselessness. The Cap and Trade legislation before Congress, for example, will barely limit carbon emissions at all because it has been gutted to please the polluters.

He will only achieve significant progressive change if he reforms the political system itself - to make it accountable to the American people, not the corporations. He needs to change the rules of the game. Ban big business from making political donations, and replace it with state funding. Shut down the lobbying industry. Make a big populist speech announcing you are driving the money-lenders out of the temple of democracy: it'd be surprisingly popular in a country where people can see they're being ripped off every day. The alternative is to become rapidly complicit in a system where defending rape and slavery is seen as just another day's work in Washington DC. ++


The Big Squander
PAUL KRUGMAN, NYT
November 19, 2009
http://www.nytimes.com/2009/11/20/opinion/20krugman.html

Earlier this week, the inspector general for the Troubled Asset Relief Program, a k a, the bank bailout fund, released his report on the 2008 rescue of the American International Group, the insurer. The gist of the report is that government officials made no serious attempt to extract concessions from bankers, even though these bankers received huge benefits from the rescue. And more than money was lost. By making what was in effect a multibillion-dollar gift to Wall Street, policy makers undermined their own credibility — and put the broader economy at risk.

For the A.I.G. rescue was part of a pattern: Throughout the financial crisis key officials — most notably Timothy Geithner, who was president of the New York Fed in 2008 and is now Treasury secretary — have shied away from doing anything that might rattle Wall Street. And the bitter paradox is that this play-it-safe approach has ended up undermining prospects for economic recovery. For the job of fixing the broken economy is far from done — yet finishing the job has become nearly impossible now that the public has lost faith in the government’s efforts, viewing them as little more than handouts to the people who got us into this mess.

About the A.I.G. affair: During the bubble years, many financial companies created the illusion of financial soundness by buying credit-default swaps from A.I.G. — basically, insurance policies in which A.I.G. promised to make up the difference if borrowers defaulted on their debts. It was an illusion because the insurer didn’t have remotely enough money to make good on its promises if things went bad. And sure enough, things went bad.

So why protect bankers from the consequences of their errors? Well, by the time A.I.G.’s hollowness became apparent, the world financial system was on the edge of collapse and officials judged — probably correctly — that letting A.I.G. go bankrupt would push the financial system over that edge. So A.I.G. was effectively nationalized; its promises became taxpayer liabilities.

But was there any way to limit those liabilities? After all, banks would have suffered huge losses if A.I.G. had been allowed to fail. So it seemed only fair for them to bear part of the cost of the bailout, which they could have done by accepting a “haircut” on the amounts A.I.G. owed them. Indeed, the government asked them to do just that. But they said no — and that was the end of the story. Taxpayers not only ended up honoring foolish promises made by other people, they ended up doing so at 100 cents on the dollar.

Could things have been different? Some commentators argue that government officials had no way to force the banks to accept a haircut — either they let A.I.G. go bankrupt, which they weren’t ready to do, or they had to honor its contracts as written.

But this seems like a naïve view of how Wall Street works. Major financial firms are a small club, with a shared interest in sustaining the system; ever since the days of J.P. Morgan, it has been common in times of crisis to call on the big players to forgo short-term profits for the industry’s common good. Back in 1998, it was a consortium of private bankers — not the government — that put up the funds to rescue the hedge fund Long Term Capital Management.

Furthermore, big financial firms have a long-term relationship, both with the government and with each other, and can pay a price if they act selfishly in times of crisis. Bear Stearns, the investment bank, earned itself a lot of ill will by refusing to participate in that 1998 rescue, and it’s widely believed that this ill will played a major factor in the demise of Bear Stearns itself, 10 years later.

So officials could have called on bankers to offer a better deal, for their own sake, and simultaneously threatened to name and shame those who balked. It was their choice not to do that, just as it was their choice not to push for more control over bailed-out banks in early 2009.

And, as I said, these seemingly safe choices have now placed the economy in grave danger.
For the economy is still in deep trouble and needs much more government help.

Unemployment is in double-digits; we desperately need more government spending on job creation. Banks are still weak, and credit is still tight; we desperately need more government aid to the financial sector. But try to talk to an ordinary voter about this, and the response you’re likely to get is: “No way. All they’ll do is hand out more money to Wall Street.”

So here’s the real tragedy of the botched bailout: Government officials, perhaps influenced by spending too much time with bankers, forgot that if you want to govern effectively you have retain the trust of the people. And by treating the financial industry — which got us into this mess in the first place — with kid gloves, they have squandered that trust. ++


Warren Winning Means No Sale If You Can’t Explain It
Mark Pittman and Bob Ivry, Bloomberg
http://www.bloomberg.com/apps/news?pid=20601109&sid=a.DEiDrOr.ms&pos=10

Nov. 19 (Bloomberg) -- In Elizabeth Warren’s world, credit card contracts would be so simple a teenager could read and understand them in four minutes. Loans would be as easy to compare as toasters, and online credit scores would be free.

“We need a new model: If you can’t explain it, you can’t sell it,” said Warren, 60, a Harvard University law professor who is head of the Congressional Oversight Panel for the Troubled Asset Relief Program, in an interview.

The 1966 high school debate champion of Oklahoma may get what she wants. The House of Representatives will vote in December on her idea. She suggested a Financial Product Safety Commission in a 2007 article in the magazine Democracy. President Barack Obama proposed it to Congress in June as the Consumer Financial Protection Agency.

Warren won’t discuss whether she may be a candidate to lead the authority, which would have the power to regulate $13.7 trillion of debt products. A Warren nomination would tell banks that Obama is determined to force reduced checking-account fees and limit lender claims in mortgage advertising, among other measures the industry opposes, said Thomas Cooley, dean of New York University’s Stern School of Business.

“She is an ideological crusader,” Cooley said in an interview. “She is a person who will stir up a lot of trouble.” In a column in Forbes magazine, Cooley accused her of “waging a self-righteous holy war.”

The criticism doesn’t bother her, Warren said. She learned to shake things off growing up in Norman, Oklahoma, with three older brothers “in a family of car parts and fist fights,” she said. “It was get tough or die, and I decided to get tough.”

Coors Light

The $700 billion bailout hasn’t stopped the “culture of excessive risk-taking” that led to the financial crisis, Warren said today during an oversight panel hearing. TARP has “injected an unprecedented level of pricing distortions and moral hazard into the marketplace,” she said.

Her detractors confuse prairie-born populism with elitism, probably because of her job, she said in the interview. On the faculty of Cambridge, Massachusetts-based Harvard since 1992, she is the Leo Gottlieb Professor of Law. Before Harvard, she taught law at five other universities in four states.

“Those comments are intended to be nasty, not accurate,” said Warren, who graduated from high school at 16 and said she prefers Coors Light beer over iced tea. “I think a lot of Americans are not sure which side Washington is on, the side of banks or the side of the people.”

Freedom of Choice

Warren is a superstar to anyone who has been baffled by financial fine print, according to Arianna Huffington, editor- in-chief of the Huffington Post, a news and opinion Web site.

“She’s been courageous in a culture where every other official is checking to see if what they’re saying is going to affect their career,” said Huffington, who met Warren when the professor was a guest on CNBC’s “Squawk Box” and Huffington was hosting. “If she doesn’t get the job, it would really mean that the special interests have won.”

A measure the House Financial Services Committee approved on Oct. 22 would empower the consumer agency to set limits on checking account overdraft fees and to ban credit cards with escalating rates and lending practices it deems predatory. Similar legislation is before the U.S. Senate Banking Committee.

If such an authority had existed, Americans might not have taken out the subprime and other mortgages that touched off the recession when house prices fell, Warren said. Congress is rewriting financial rules after the 2007-2008 crisis caused $1.67 trillion in writedowns and losses.

‘Pitchforks and Torches’

The agency’s opponents, including the U.S. Chamber of Commerce, the American Bankers Association and the Financial Services Roundtable, contend another layer of regulation would bury small community banks and rob consumers of freedom of choice in making basic financial decisions.

“It is positively Orwellian that, through this legislation, Democrats will empower an unelected bureaucrat to tell their fellow citizens whether or not they can fly on an airplane, take a vacation or purchase a home,” Representative Jeb Hensarling, a Texas Republican on Warren’s TARP panel, said Oct. 22. He declined through his spokesman, George Rasley, to be interviewed for this story.

If Congress creates the watchdog, the director should have “a working knowledge of how financial institutions operate,” said Scott Talbott, the financial roundtable’s chief lobbyist.
“The time for pitchforks and torches is over,” Talbott said in an interview. “The focus should be on reforming the system and making it better.”

Pork Bellies

Warren’s Wall Street experience consisted of a three-month summer associate position in 1975 at Cadwalader, Wickersham and Taft, the financial district’s oldest law firm, according to its Web site. Her aunt and mother moved to Rockaway, New Jersey, to care for her 4-year-old daughter while Warren worked at 2 Wall Street. At first, she said she thought she was being made fun of as a rookie from the sticks.

“I got out my little notebook, and the senior partner started talking about frozen pork belly futures,” Warren said, recalling an early meeting. “How dumb do they think I am? I wasn’t going to fall for it because I am a sophisticated person. It finally occurs to me that he is serious, and that there is a market for pork bellies.”

At Cadwalader she earned “an astonishing amount of money” that she used to get braces, she said. By the time she received her degree in 1976 from Rutgers School of Law in Newark, New Jersey, she was expecting her second child, Alex. After Wall Street firms showed no interest in hiring a pregnant recent graduate, Warren said she worked from home, writing wills and doing real estate closings for “anyone who came in the door.”

Trusting FDR

“At Cadwalader, I did a $9 million fifth mortgage on a ship,” she said. “In private practice, I worked for a couple starting a little business who had to negotiate some insurance contracts for about $18,000, but it mattered more to them than that ship mortgage mattered to anyone.”

Warren said she probably inherited her populism from her grandparents, who built one-room Indian schools during the Great Depression. While they didn’t understand the financial world, they knew President Franklin D. Roosevelt made their money safe by establishing the Federal Deposit Insurance Corp., she said.

There was little cash to spare during her childhood, she said. Her father was a maintenance man and her mother worked part-time taking catalog orders. Warren didn’t let them know she paid $25 application fees with baby-sitting money until she won a scholarship to George Washington University in Washington.

“Then, I could tell them I could go to college,” she said, “and someone else would pay for it.”
Credit Card Snakes

Warren began at George Washington at 17. At 19, she married mathematician Jim Warren, who worked at the Johnson Space Center in Houston, and finished her degree at the University of Houston. They divorced in 1978. Her second husband, Bruce Mann, is Harvard’s Carl F. Schipper Professor of Law and author of 2002’s “Republic of Debtors: Bankruptcy in the Age of American Independence” (Harvard University Press, 358 pages, $29.95).

Warren said she doesn’t know her credit score -- “I assume it’s good” -- and maintains zero Visa and MasterCard balances.

“Credit cards are like snakes: Handle ‘em long enough and one will bite you,” she said. “You have to remember what are incomes to banks are outgoes to families.”

Obama, with whom she attended a campaign event during the presidential race, read her work before proposing the consumer agency, according to Warren.

‘Pro-Consumer’

She is the author of nine books, including two with daughter Amelia Tyagi, 38, a former McKinsey & Co. consultant who runs an executive placement office. Tyagi and her mother wrote “The Two-Income Trap: Why Middle-Class Mothers and Fathers Are Going Broke” (Basic Books, 255 pages, $26) in 2003 and “All Your Worth: The Ultimate Lifetime Money Plan” in 2005 (Free Press, 289 pages, $24.95).

Senate Majority Leader Harry Reid, a Nevada Democrat, appointed Warren to the five-member TARP committee after she impressed him with her “strong pro-consumer views,” according to Jim Manley, Reid’s spokesman.

Warren, who began testifying before Congress more than a decade ago, wasn’t always accepted as a mainstream figure in Washington, said Representative Brad Miller, a North Carolina Democrat. He introduced a bill to create a Financial Product Safety Commission in 2007, and it went nowhere because consumers’ rights weren’t recognized as significant, he said.

“It’s now a very serious proposal,” Miller said in an interview. “If it were not for her, I don’t think it would have gotten this much support. She knew what was important, what was necessary and what would help the bill get through.”

Odd Hours

Barney Frank, chairman of the House Financial Services Committee, called Warren a “great partner” in crafting the legislation. The Massachusetts Democrat said he speaks with her by phone twice a week.

In her role overseeing the TARP, Warren has been critical of the administration, accusing the Treasury Department of undervaluing the stock warrants that were supposed to compensate taxpayers when banks repay their bailouts. A lack of transparency about how TARP functions “erodes the very confidence” it was to restore, her committee said in a report.

Treasury Secretary Timothy Geithner declined to comment for this story through his spokesman, Andrew Williams.

Named in May as one of Time Magazine’s 100 Most Influential People in the World, Warren teaches three days a week at Harvard, flying to Washington and New York for meetings, sometimes stopping just long enough to charge her laptop.

She keeps a pace few could maintain, Miller said.

Jon Stewart

“My last e-mail from her one Saturday night was after 11 p.m. and the first one on Sunday morning came before 7 a.m.,” he said. “It made me think she keeps some odd hours.”

Warren travels to Los Angeles, where her son and daughter live, about every six weeks. She said she was there to share Halloween with her grandchildren, Octavia, 8, and Lavinia, 4, dressed as a sheep to complement Lavinia’s Bo Peep costume.

Her students suggested she be a guest on “The Daily Show with Jon Stewart” on Comedy Central, she said. She was also interviewed by Michael Moore for his documentary, “Capitalism: A Love Story,” in which she makes a one-minute appearance in a segment about TARP.

She’ll “talk to anyone” about consumer protection and her belief that government should stop bank profits earned at the expense of people cheated by “tricks and traps,” she said.
Not Obama Country

“I made a decision at the beginning that the experts wrecked this economy and the public has a right to know what’s going on,” she said. “It’s our economy on the line and the experts can’t be trusted. I want everyone to be part of the solution to how we want to change our economic world. If it’s risky or makes me look stupid to someone, so be it.”

Warren, whose TARP job paid her $114,733.04 through Sept. 30, has a high profile the White House should appreciate, said Damon Silvers, an oversight panel member, in an interview.

“We were out in Colorado at a hearing for rural finance and people came up to her,” Silvers said. “That wasn’t exactly Obama country out there, if you know what I mean.”

Warren reflects Obama’s belief in the good that government can do, said Howard Marks, chairman of Oaktree Capital Management LLC in Los Angeles, who said he met Warren when Huffington brought her to a dinner at his house.

“We found out over the last eight years what kind of regulation you get from an administration that doesn’t believe in regulation,” said Marks, whose firm has about $67 billion in assets under management. “Now we’ll find out what oversight we will have from people who do.” ++


"I'm asking you to believe. Not just in my ability to bring about real change in Washington ... I'm asking you to believe in yours."
~ Barack Obama

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