Bipartisanship for dummies

Ever notice how all the dysfunctional wrangling in D.C. stops the minute our politicians need to do the 1 percent’s bidding?

When it comes to taking away your rights as an investor, consumer or citizen, politicians who can’t seem to agree on anything else seem to work together fine.

The latest proof that “bipartisanship” is a cynical gimmick is the so-called JOBS act, passed by the House with bipartisan support and now under consideration by the Senate, with the blessing of President Obama.

In this case, the bill’s original Republican sponsors came up with the idea of packaging a collection of measures that would weaken investor and consumer protections by the acronym JOBS, which stands for Jumpstart Our Business Startups.

After all, who could be against JOBS? Most Democrats in the House were happy to sign on – only 23 voted against it. Even Democratic representatives Nancy Pelosi and Maxine Waters voted for it.

Maybe these politicians thought the JOBS branding and the bipartisan marketing would conceal what the bill really was – the latest of several disastrous bills dismantling sensible financial regulation.

The JOBS act is the ugly stepchild of the 1999 Gramm-Leach-Billey Act repealing the Depression-era Glass-Steagall Act, which kept banks from mingling federally-guaranteed banking activities from riskier activities, and the 2000 Commodities Futures Modernization Act, a Frankenstein bill that kept credit default swaps deregulated and led to the Enron scandal in 2001.

Both pieces of legislation contributed directly to the 2008 financial collapse.

In the case of the JOBS act, it would gut many of the accounting reforms contained in the Sarbanes-Oxley Act, which was passed in the wake of the Enron debacle. The JOBS act would exempt emerging companies worth up to $1 billion from disclosure, reporting and governance rules. It would allow such companies to operate for 5 years without regulatory oversight.

John Coffee, securities law professor at Columbia University Law School, says it could be more accurately described as the “boiler room legalization act” because it would allow companies to raise money from small investors on the Internet, without any regulatory supervision, evoking the small operations that sold dubious investments over the phone using high-pressure tactics.

Arthur Levitt, former head of the SEC, told San Francisco Chronicle columnist Kathleen Pender the bill was “a disgrace.”

In a scathingly sarcastic column in the New York Times, Pro Publica’s Jessie Eisenger wrote: “Nigeria shouldn’t be the only country to benefit from the Web. Right here in America, the elderly are increasingly attractive to a variety of entrepreneurial spirits. If JOBS becomes the law, such innovators could flourish.”

Barbara Roper, the Consumer Federation of America’s director of investment protection suggested that “Republicans cannot believe they have suckered the Democrats into taking up their idea that deregulation is the way to promote job growth.”

I don’t think the Democrats got suckered. I think they know exactly what they’re doing. President Obama has been struggling in his fundraising because Wall Street and the big-money donors have lost their enthusiasm for him this electoral cycle.

But he’s showing signs of bouncing back, after his campaign manager, Jim Messina, issued a pledge that the president would stop demonizing Wall Street. In February, the president went on a fundraising blitz, raising $45 million, up from $29 million the previous month.

But it’s still far less than the $56 million he raised during the same month in 2008, when he was fighting Hilary Clinton in a bruising primary campaign. The president and his party have to deliver for their funders, and the JOBS act is a perfect gift to show the big donors what they can expect for their generosity.

But they all must take us for a bunch of clods if they think we can’t tell the difference between a nasty attack on our rights and real jobs promotion.

Call your senator today and remind them you can’t be fooled by an acronym.  Suggest you know how to spell jobs, and this awful piece of legislation doesn’t.

 

Congress / Derivatives / Jobs crisis / Martin Column / President Barack Obama - 03/20/2012

There Oughta Be A Law…. But There Won’t Be Unless We Change the Constitution

Are you one of those people who are constantly saying “there oughta be a law”? I am - which is probably why I ended up a consumer advocate.

Some pretty lofty assumptions about democracy are built into that quaint phrase, if you think about it. For one, it assumes that law is a good way to resolve disputes (as compared, say, to fists or guns). Also, that everybody will obey the law. Perhaps most obvious, when someone says, “there oughta be a law,” they’re asserting our right as Americans to make things better for ourselves by getting the legislative branch to address an issue of public importance.

Indeed, the "the right of the people...to petition the Government for a redress of grievances" is built into the First Amendment - the same amendment that five members of the United States Supreme Court pretty much erased from the Constitution in the Citizens United case two years ago.

By now, everyone understands that by giving corporations the same First Amendment rights as humans, and then ruling that spending money to influence elections is a form of “free speech,” the Supreme Court in Citizens United unleashed a tsunami of corporate money that will drown out the voices of 99% percent of Americans in favor of the 1% who have the wealth to determine who wins elections. “Free” speech can’t compete with hundreds of millions of dollars of paid propaganda.

What’s not been much discussed is how the Supreme Court decision actually conflicts with the rest of the First Amendment: it has negated our right to petition government for a redress of grievances.

Consider another Supreme Court-imposed debacle: in 2011, the high court ruled that consumers who sue big companies in class actions can be thrown out of court and forced to go into “arbitration” – a system in which the company hires private “judges” to determine whether the company broke the law. The Federal Arbitration Act specifically says that arbitration doesn’t apply if the arbitration clause violates a state’s consumer protection law. But the Supreme Court refused to recognize that exception. The case is Concepcion v AT&T Mobility. In that lawsuit, consumers challenged AT&T for adding extra charges to the purchase of a cell phone that the company had advertised as “free.” The decision – another enormous victory for big corporations – strips American consumers of their right to hold a company accountable for rip-offs big or small.

Unlike the Court’s ruling in Citizens United, which interpreted the US Constitution, Congress could easily amend the Federal Arbitration Act to reverse the Concepcion decision. But will it? Forget about the House of Representatives: it’s controlled by corporate Republicans who are owned by the cell phone companies. (The House was close to passing a bill that would have allowed  telemarketers and debt collectors to call consumers’ cell phones with recorded messages. A huge public outcry delayed the legislation.)

But in the Democrat controlled US Senate, a bill to override the Supreme Court’s arbitration ruling has only fifteen cosponsors.

In California, we are lucky to have the ballot initiative, which allows us to take matters into our own hands when state legislators are too beholden to special interests to deal with important issues. Using the initiative process, California voters passed Proposition 103 to restrain price gouging by auto, home and business insurance companies. My colleagues at Consumer Watchdog are now proposing an initiative to put health insurance premiums under Proposition 103’s controls. But even the people’s initiative process has been corrupted by corporate money. And attempts to ban corporate interference in ballot initiative campaigns ran smack into, once again, a decision by the United States Supreme Court.

Indeed, you don’t have to be an astute observer of politics to know that corporate money has long corrupted politics. Our report, “Sold Out: How Wall Street and Washington Betrayed America” (PDF), published in March 2009, got right to the bottom line in its title. Between 1998 and 2008, Wall Street invested $5 billion in Washington, a combination of money for lobbying and campaign contributions that won deregulation and other policy decisions that enabled the financial industry to do as it pleased. The ensuing orgy of unbridled speculation came to a halt in 2008 when the financial industry threatened to shut down the system unless they got trillions of dollars in loans, tax breaks and other taxpayer bailouts.

Laws regulating corporate spending in elections and lobbying were intended to limit the damage to democracy. Some, including me, would argue that they didn’t work anyhow. But Citizens United has eliminated any chance of righting the imbalance of political power between corporations and human beings short of changing the United States Constitution itself. We’re proposing exactly that: a 28th Amendment to the Constitution that reads “The protections of the First Amendment that apply to the spending of money on lobbying and elections, whether by contributions, expenditures or otherwise, shall extend only to human beings.” Join us right now.

Citizens United / Harvey Column - 02/06/2012

The Bank Occupy Couldn't Live Without

Bank of America seems determined to keep providing fuel to keep the Occupy movement going strong.

You probably recall the bank’s plan to soak its customers by charging them to use their debit cards, which was withdrawn after a torrent of bad press.

Clearly, all is not happy in Bank of Americaland, where the stock has dropped about 50 percent from 2010 levels. Despite being propped up by millions in taxpayer help as well as by Warren Buffet, the bank remains in so much trouble that in September, the bank announced plans to lay off 40,000 employees, mainly in its consumer division.

Who needs those consumers anyway?

It’s not just the bank’s lowly employees that are losing their jobs. A couple of top executives are leaving too, but the bank made sure to cushion the pain of their leaving with millions of dollars in severance and benefits.

The bank was also forced to cut back one of its most prized activities last year, spending a paltry $2.2 million on lobbying last year, down from nearly $5 million before the financial collapse.

You may not have heard about the bank’s latest effort to keep the protestors busy. They’ve decided to put the squeeze on another bunch of customers, this time small-businesses.

Several small-business owners told the Los Angeles Times is now forcing them to pay their balances in full, instead of on a monthly basis, as they used to. This change, the business owners say, could wipe them out.

Meanwhile, a firm that helps small businesses get loans calls Bank of America’s level of small-business lending “a disgrace for the largest bank in the country”.

Ami Kassar, CEO and founder of MultiFunding, says Bank of America ranks 6,128 out of 6,800 based on its small-business lending.

Three years after the financial collapse, Wall Street is still a dysfunctional mess, providing little help for Main Street. Meanwhile, our political leaders, for the most part, show no inclination to correct the mistakes that have gotten us here.

 

 

Bank of America (BoA) / Martin Column - 01/05/2012

We the Fee

I couldn’t find any comment from the Republican presidential candidates on one of the most compelling financial events of the last week: Verizon’s virtually instant reversal of its $2 fee on people who pay their wireless bills over the phone or online.

Nor apparently did the White House have anything to say, even though the Federal Communication Commission’s announcement that it was “concerned” about the fee no doubt factored into Verizon’s decision. The FCC, once the cell phone industry’s best friend in Washington, D.C., has morphed into something actually looking like a consumer protection agency under Obama. It also killed the AT&T – T-Mobil merger that would have destroyed competition in the wireless marketplace and led to vastly higher prices and much worse service. The President certainly deserves a victory lap – and could use one – but remained incommunicado during his vacation in Hawaii.

Nothing from the Tea Party or Occupy Wall Street either.

Fees have become the bane of the American consumer. Airlines make more money from fees than from air fares. Banks replaced tellers with machines and now force their customers to pay $3-$5 for the privilege of accessing their own money. Hotels apply “resort fees” for using the typically impoverished gym. And then there is the coup de grace: the fee you have to pay for getting a bill in the mail – a favorite of the cell phone and health insurance companies.

Undisclosed, or at best hidden in the fine print, these fees cripple consumers’ ability to compare prices. Which becomes a nightmare if you realize you are paying too much and decide to take your business elsewhere: many of these companies require you to stay with them for two years or pay an early termination fee in the hundreds of dollars.

Verizon’s retreat from the fee was a major victory for consumers, who organized a massive internet/Twitter/Facebook protest worthy of Zuccotti Park or Tahrir Square. In November, Bank of America tried to institute a $5 fee for using a debit card – it too was forced to back down in the face of national outrage.

How then to explain the silence of political candidates and public officials? The simple answer harkens back to the Occupy metaphor. The political class doesn’t sweat the small stuff like a $2 fee – they can afford not to. But most Americans can’t afford to throw away two bucks.

Harvey Column / Occupy / Outrage / President Barack Obama / Tea Party - 01/03/2012

Remind AGs Who They Work For

The big banks are headed to Washington D.C. in an effort to weaken any potential settlement stemming from complaints about the banks’ misbehavior in the foreclosure crisis.

Those of us who favor holding the banks accountable are taking a different route Tuesday – through the country’s 50 state capitals.

A coalition of homeowner and consumer advocates are encouraging people to contact their state attorney generals today in an effort to encourage them to conduct real robust investigations into the big banks’ foreclosure fraud, not just go through the motions.

The official response to disclosures of the big banks’ sloppiness and downright fraud in the foreclosure process has been a mishmosh. President Obama refused to declare a moratorium while the mess was sorted out; the state attorney generals promised a tough investigation but don’t appear to have followed through, and then the various federal bank regulators got involved in an effort to negotiate a settlement.

One strategy for the big banks and their Republican allies has been to demonize Elizabeth Warren, a strong homeowners’ advocate who has been working to set up the Consumer Financial Protection Bureau, which was created as part of the financial reform package passed last year. While the CFPB doesn’t exist yet, Warren has apparently been involved in the settlement process because that agency will have a hand in enforcing a settlement.

At the national level, it’s not just the Republicans that are covering for the bankers. The Obama administration in its present mood of bank coziness hasn’t been inclined to either prosecute bankers for violating the law or drive a hard bargain with them.

So that leaves it up to the attorneys general, several of whom, including Illinois’ Lisa Madigan, Iowa’s Tom Miller and California’s new attorney general have promised tough stances in protecting homeowners and holding banks accountable. Which means it’s up to us to call them – today – and remind them to hang tough.

 

 

Consumer Financial Protection Agency / Foreclosure / Martin Column - 03/28/2011

Top 4 Lesson Big Bankers Can Teach Us

America’s bankers have been extraordinarily effective in responding to a financial crisis that they created. They’ve worked hard to make sure that the response to the crisis didn’t threaten their fat bonuses or their awesome political power.

They succeeded in gutting the toughest aspects of financial reform. Then they started lobbying the regulators who will have the enforcement power.

Now they’re toiling to undermine a proposed settlement with authorities over widespread abuses in the foreclosure process, and demonizing consumer champion Elizabeth Warren and the Consumer Financial Protection Agency in the process.

Of course they’re getting plenty of help from their government enablers. As Gretchen Morgenstern reported in the New York Times, the 50 state attorney generals who are supposed to be spearheading the investigation into the foreclosures aren’t doing any actual investigating.

This puts them at a definite disadvantage when they sit down to negotiate with the banks.

Those of us who aren’t bankers and would like to see a different outcome could learn a few things from the bankers.

How do the bankers do it?

  1. They’re relentless. They don’t take no for an answer and they don’t know the meaning of defeat. They have lots of money and they’re not afraid to spend it on campaign contributions and lobbying. While we may not be able to match their cash, there’s no reason we can’t be as relentless as the big bankers. They wouldn’t still be in business, let alone raking in billions in bonuses, if we hadn’t bailed them out.
  2. They have no illusions about loyalty. They spent big to elect President Obama. But when it looked like they could get more from the Republicans, they switched sides. Nobody can take their support for granted.
  3. They have no shame. They never apologized for all the risk and fraud that created the collapse. They never offered to tighten their belts or pick up part of the tab. They just kept fighting for their selfish interests.
  4. They maintained their sense of humor. How else do you explain their carping about how anti-business the president is, while Obama’s team does whatever it can to prop up the “too big to fail banks” while wringing its hands that it just can’t do any more to help the unemployed or distressed homeowners?

 

Financial Crisis / Financial Reform Legislation / Foreclosure / Martin Column / Outrage - 03/19/2011

Death by a Thousand "Buts"

After two years in office, President Obama has decided it's time to fix one of the colossal mistakes of his predecessor: too much federal regulation.

I don't remember George W. Bush as a consumer advocate who, in his zeal to regulate corporations, got carried away. But last week President Obama announced a new priority for his administration. Federal regulations “sometimes have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs,” the President explained, implying that it was in fact the government that crippled our economy, just like pro-corporate conservatives have been saying.

Faced with this threat to our national security, there was only one thing to do, and Obama stepped up. He commanded the entire federal government to review every regulation on the books and get rid of “outdated” rules and “unnecessary paperwork.” In a rousing call to arms, the President concluded: “This is the lesson of our history: Our economy is not a zero-sum game. Regulations do have costs; often, as a country, we have to make tough decisions about whether those costs are necessary.”

Obama didn’t invent the cost/benefit approach to regulation. That was concocted by big business-funded think tanks and adopted by President Ronald Reagan, who issued Executive Order 12291 immediately after taking office in 1981. Its preface is eerily similar to Obama’s, proposing “to reduce the burdens of existing and future regulations, increase accountability for regulatory actions, provide for presidential oversight of the regulatory process, minimize duplication and conflict of regulations…”

Reagan demanded that any regulation that imposed costs on businesses that exceeded its "benefits" be eliminated. The problem is that cost/benefit analysis doesn’t always take into account certain intangible considerations or values that are difficult to quantify in dollars, such as the benefits of unpolluted water or the worth of a human being. In an infamous internal memo (PDF) uncovered in litigation over the now extinct Ford Pinto’s exploding gas tank, company executives compared the cost of fixing the vehicles ($137 million) versus what it would have to pay for expected deaths and injuries ($49.5 million) and decided that the cost of repairing each car - $11 dollars – exceeded the benefits.

Government is supposed to protect us against such reasoning, not use it as a guiding principle.

I was working at Public Citizen Congress Watch in Washington, D.C. at the time, and Reagan’s disdain for government regulation  became the centerpiece of his Administration agenda. James Watt, Reagan’s controversial appointee to the Interior Department, sacked the agency, turning it into a mouthpiece for oil, mining and other industries supposedly regulated by the agency. The Reagan Administration’s deregulation of savings banks led to reckless investments, fraud and corruption, necessitating a bailout – sound familiar? – that ultimately cost taxpayers about $124 billion.

Is history repeating itself? In a nod to those who supported him as a candidate because of his forceful speeches against special interests and corporate abuses, President Obama was careful to acknowledge the importance of “child labor laws,” “the Clean Air Act” and federal rules against “hidden fees and penalties by credit card companies.” In a nod to the elephant in a pink dress sitting on the divan in our living rooms, the President noted that “a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.” “Where necessary, we won't shy away from addressing obvious gaps” in federal rules, Obama insisted.

It's painfully obvious that the President hoped his foray into Reagan-style anti-regulation rhetoric would curry favor with Wall Street, its wholly-owned subsidiary, the U.S. Chamber of Commerce, and their toadies in Congress. They’ve been very, very mad at the President ever since he had the temerity to sign a toothless financial reform bill that left the financial industry free to revert to its pre-bailout speculative ways, not to mention the hopelessly compromised health care law that requires every American to buy health insurance from private insurance companies starting in 2014, but does not effectively regulate how much we have to pay them.

Obama went so far as to announce his new regulatory policy in a guest column for the Wall Street Journal's editorial page, where at least one attack on Obama is on the menu every day.

This latest gesture of appeasement didn’t work out as the President hoped, though. "Yes, but" was the nearly universal response from the intended recipients of the President’s largesse, as Associated Press reporter Tom Raum reported. For your convenience, I’ve highlighted the “but factor”:

“Obama’s action is ‘a positive first step,’ said Thomas J. Donohue, president of the U.S. Chamber of Commerce, the nation’s biggest business organization. But, Donohue added, ‘a robust and globally competitive economy requires fundamental reform of our broken regulatory system.’ He called on Congress to 'reclaim some of the authority it has delegated to agencies.’"

“The National Association of Manufacturers said it ‘appreciated’ Obama’s call for a regulatory review, but called for Obama to demonstrate results by ‘delaying poorly thought-out proposals that are costing jobs,’ listing the EPA’s proposals to regulate greenhouse gases as a prime example."

A “spokesman for House Speaker John Boehner, called Obama’s review a welcome acknowledgment that government regulations have economic consequences. But he said the president should take bolder steps immediately.”

"David Walker, former U.S. comptroller general, said in an interview that it was ‘fully appropriate to engage in a baseline review of existing federal regulations.’ But Walker, head of a balanced-budget advocacy group called Comeback America Initiative, questioned having the agencies themselves hunt for harmful regulations. ‘We need to have an independent review process that has transparency,” he said. Walker said many of today’s regulations date back to the 1950s and need to be revamped.”

For a little conjunctional variety, here's the response of House Majority Leader Eric Cantor:

“Obama’s executive order ‘shows that he heard the same message I did in the last election - that Americans are sick and tired of Washington’s excessive overreach and overspending.’ ‘While I applaud his efforts, we must go further,’ Kantor added. He proposed more aggressive steps to strike down ‘needless and burdensome’ regulations that plague businesses and stifle job growth.”

President Obama still doesn’t understand that his political opponents will never voluntarily support anything he does, short of a complete capitulation (and perhaps not even then). This is not just a matter of interest to the political class. If the White House spends the next two years trying to placate the implacable, the rules, regulations and legislation needed to restore the economy and protect the public health and safety are never going to see daylight.

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Congress / Financial Crisis / Financial Reform Legislation / Harvey Column / President Barack Obama - 01/24/2011

Around the Web: They Told Us So

The foreclosure robo-signing scandal may not have been making headlines until a month ago, but nobody should be surprised that it has finally erupted.

There have been warnings after warnings, all of them ignored by politicians, policy makers and the mainstream media.

Among those who have been ringing the alarm bells is Florida lawyer April Charney, with Jacksonville Area Legal Aid, who has traveled the country to train lawyers how to challenge foreclosures. In California, Walter Hackett, of Inland Empire Legal Services, has overseen a listserv for consumer attorneys representing borrowers facing foreclosure. Web sites like 4closurefraud.org have also been relentlessly focused on the issue.

Earlier this year, Mother Jones ran a stinging story, “Can Anyone Stop The Predatory Lenders?” detailing the misdeeds of mortgage servicers. Reporter Andy Kroll pointed out that the feds were basically paying the same shoddy characters who engineered the subprime crisis to fix the mess.

And Bloomberg’s Jonathan Weil cautions against taking comfort from the big bankers who are now trying to minimize the impact of the fiasco they created. “Three years ago, as the subprime mortgage crisis began to spiral, one of the lessons the public should have learned is that the leaders of these companies often have no idea what’s going on inside them,” Weil writes. “We may be witnessing the same phenomenon again. There’s no excuse this time for anyone to be surprised.”

Around the Web / Foreclosures / Martin Column - 10/21/2010

Around the Web: Outsourcing Foreclosure `Catastrophe'

You wouldn’t think the leader of the free world would be so willing to outsource a massive foreclosure scandal to state attorneys general, judges, regulators and the big banks that created the mess in the first place.

But that’s exactly what President Obama has done, standing aside while 50 state attorneys general launch investigations, while banks implement their own voluntary moratoriums, announcing they have halted some, but not all, foreclosure proceedings.

A growing number of politicians, civil rights and consumer groups and labor unions have called for a nationwide moratorium amid allegations that banks violated foreclosure laws by using sloppy, false or fraudulent paperwork to kick people out of their homes.

But President Obama doesn’t like the idea of a foreclosure moratorium, which he fears could put the kibosh on his fragile recovery.

Where is the administration’s effort at finding some other creative solution to the mess the big banks have created across the country? What we find instead are regulators that have been ignoring clear warning signs about the banks’ troubled foreclosure crisis.

The federal response so far has been limp at best: a Justice Department inquiry (short of an investigation) and a call by a federal regulator for the banks to voluntarily verify that their foreclosure paperwork is in order.

Recent press reports call into question whether the banks have even implemented the foreclosure moratoriums they promised. Meanwhile more banks, this time Wells-Fargo, acknowledge they have also violated the laws governing foreclosure by submitting unverified documents to take people’s homes. Isn’t there an election coming up where the Democrats are fighting to maintain control of Congress, with their entire agenda at stake? Isn’t there already one party that has expertly cornered the whole do-nothing stick-your-head-in-the-sand approach to unemployment and foreclosure? Doesn’t the president know how awful it looks to most people to have the bailed-out banks getting away with yet more hanky-panky?

You would think the president would want to appear more engaged in this issue that’s so close to the heart of our on-going economic troubles.

His treasury secretary fears “unintended consequences". Apparently the administration would prefer the banks continue to foreclose on people using phony documents. While Wall Street predicts a catastrophe if a moratorium is implemented. If the big bankers want to know who created a catastrophe that will cost them billions, they only need to look in the mirror.

Bank of America (BoA) / Foreclosures / Martin Column / Outrage / President Barack Obama - 10/15/2010

The Lawyer With the Dragon Tattoo

This year’s most fearsome movie heroine is Lisbeth Sander, the hacker vigilante who outwits corporate and political evildoers with her superior investigatory skills, not to mention some kickboxing and the deft use of a taser. “The Girl With the Dragon Tattoo” smashes and hacks her way through the government officials, business executives and journalists that comprise Sweden’s lazy and corrupt Establishment. They do everything they can to stop her, but – I’m about to give away the ending – Sander ultimately triumphs, exposing decades-long corporate and government conspiracies.

Elizabeth Warren shares none of Sanders’ characteristics – except an exceptional intellect – ­but when it comes to inspiring fear and loathing among the denizens of Washington and Wall Street, she is every inch as frightening, as has been pointed out over the last few days in profiles and posts across the mediascape.

Warren, a bankruptcy professor at Harvard Law, long criticized the practices of America’s banks and credit card companies in law reviews and academic pieces. In 2005, when the financial industry was lobbying Congress to make it harder for the average American to declare bankruptcy, Warren penned a landmark analysis that concluded that most Americans sought bankruptcy protection not because they were freeloaders but because they could no longer afford to pay their medical bills. Long before the current crash, Warren proposed the establishment of a federal agency to protect consumers against credit card tricks and other financial abuses.

In November 2008, in a rare example of a perfect congressional appointment, Senate President Harry Reid put her in charge of the congressional task force monitoring how the $700 billion in taxpayers' bailout money was spent. She has demanded answers to the same question we ask here: “where did the money go?”  The results of her investigations, which can be found here, pull no punches.

Back in 2008, no one could have expected that Congress would create a financial consumer watchdog agency of the kind Warren advocated for years.  But her powerful and outspoken performance as chair of the bailout oversight panel has made her the obvious and only credible candidate to head the new Consumer Financial Protection Bureau created by the otherwise innocuous financial “reform” legislation Congress passed a few weeks ago.

Which, of course, has got Wall Street fired up, members of Congress tied in knots and the White House cornered. Unlike the Byzantine complexities of the financial swindles and the ostensible legislative “solutions,” none of which garnered public attention much less support, the question of whether the President will appoint a skilled lawyer/consumer advocate to protect consumers, or whether he will instead choose a Wall Street insider as he did when he appointed Treasury Secretary Geithner and White House economic advisor Larry Summers, is one the public and press can easily grasp.

The appointment raises the kind of simple and straightforward “whose side is he really on?” question that Obama has so far been able to soft peddle, though he unceremoniously surrendered on the public option in the health care bill and on “too big to fail” banks in the financial reform bill, to name just a few instances of his unilateral disarmament.

Make no mistake: Warren is a highly sophisticated lawyer that knows all the tricks of the financial industry and how to use the powers of government to stop them. This expertise will be essential. I wrote a ballot proposition, approved by California voters in 1988, that regulates the insurance industry. Having spent the last twenty-two years defending it against incessant lawsuits by industry lawyers and not infrequent efforts of elected state officials to hobble it, I can tell you that few decision-makers in the federal government have the technical skills and expertise to go head to head against the battalions of lawyering orcs deployed by big financial firms. Warren does.

Which brings us back to the fascinating spectacle of the hypocritical Washington establishment trying to grapple with her candidacy. She is, literally, made for the job, and a spontaneous grassroots campaign for her appointment is mounting around the country. But the politicians, obeying their paymasters on Wall Street, are trying to figure out a strategy to sabotage her nomination. It’s almost comic to behold. Republicans should be hailing Warren as a savior of beleaguered taxpayers, but one of their Senate leaders said that her tenure as chair of the bailout watchdog was “marked with ‘controversy”” and implied that Warren doesn’t have the necessary qualifications.

It’s the same for some Dems: Senate Finance Committee Chair Chris Dodd, who had never met a financial “innovation” (or industry lobbyist) he didn’t embrace until the whole rotten system collapsed two years ago, damned Warren with faint praise, then suggested she couldn’t be confirmed. He floated the name of FDIC Chair Sheila Bair, but she said no thanks.

Nor has the Obama administrationt been particularly supportive. Two weeks ago, Treasury Secretary Geithner was forced to dispel rumors that he is opposed to Warren by mouthing some platitudes about how “capable” and “effective” she would be in the post. A White House spokesperson told reporters, “We’ve got many good candidates. I know that the president will look at this job and the several other jobs that are created as part of this legislation and make an announcement.”

Warren’s appointment could be one of the few meaningful victories for consumers in the aftermath of the Wall Street deregulation disaster. She is not your typical accommodating political appointee. She does not appear likely to “play ball” with Team Obama or anyone else inside the Beltway when it comes to protecting consumers against the pillaging financial industry. The White House is well aware that once appointed, she would be very hard to fire, especially for doing her job with the zeal it requires. Having never served in such a position, Warren has not yet been tested, so my assessment of her political spine is partly speculation. But if I’m right, she's at least as threatening as Lisbeth Sander.

Harvey Column / President Barack Obama - 08/07/2010