President Obama Flinches Once Again

The newly created Consumer Protection Bureau was the brainchild of Harvard Professor Elizabeth Warren. She is a woman of unequaled credentials to head up the new bureau and she would put teeth in the fight to protect consumers from shady and often confusing banking practices. Ms Warren has been a tireless advocate and spokesperson for consumer rights for many years. 

This bureau came out of the financial reforms in the Dodd-Frank Bill. It’s intended to put safeguards in place to prevent a recurrence of the financial meltdown that occurred in 2008. Among other things, it removes “too big to fail” protections for banks, and is intended to make banks operate at a lower risk level with other people’s money.  The banks don’t want any restrictions and they don’t want the bureau to exist. They’ve vehemently opposed the bill, with unanimous support from their congressional lackeys, the GOP.  The GOP wants to water down the authority of the Bureau and make it something the banks can go along with. Frankly, the best test of the power of the new bureau would be just how much the banks hate it. After all, it’s the banks that are being policed by the new bureau.  If they were happy with it, then we’d know it was useless.

President Obama has obviously had his arm twisted by the banking lobby on Wall St., and smelling a threat of campaign donations, he’s caved into the bank cartel and not appointed Ms Warren to the position she most richly deserves. The GOP has stated unequivocally that they will not approve any person to lead the Consumer Protection Bureau, and they are fighting to modify and water down the role it will play in financial regulation. Given that all appointees will be rejected, why hasn’t the President taken the high ground on this issue? Furthermore, why didn’t he make a recess appointment while Congress was in recess?

What we are witnessing is the hidden power of the banking industry. The President can’t afford the political liability of turning the banking industry against him. So we are witnessing a quiet and scary exercise of Wall St power over the most powerful man in the world, albeit not the most powerful entity in the world.