Obama, Banks and Electability: Elizabeth Warren Knows Too Much

Welcome to Politics Bites, where every afternoon at It's A Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on the Brian Lehrer Show, Vanity Fair contributing editor Suzanna Andrews  talks about Elizabeth Warren's battles with bankers and her campaign to challenge Scott Brown as Senator from Massachusetts.

Elizabeth Warren—former candidate for the Consumer Protection Bureau, current candidate for Massachusetts Senate, and rising folks hero of the left—shows no sign of stopping.

Before the financial crisis hit the country in 2008, Andrews said, Warren was already a bankruptcy expert, a contract law expert and a banking expert.

She had come to that [banking expertise] as a result of many years of study of the economic forces that were bearing down on the middle class. So she came well armed.

In 1979, Warren, then a college professor and registered Republican, set out to cover middle class bankruptcies, expecting to find at fault cheaters and people bilking the system. Instead Warren found that most bankruptcies took place in American families facing catastrophic illness or divorce or some other crisis, and these families had consequentially lost everything they had. Andrews said this extensive study was the most comprehensive ever done, and what Warren learned in the course of it determined her vision for the country.

She said it completely changed her vision, and indeed it changed her whole life because that was the beginning of her thirty years of study and activism.

The deregulation of the banks under President Reagan and the breakdown of the Glass-Steagall Act alarmed Warren, as did the increase of risk taking by banks and the selling of debt.

Banks, for their part, are alarmed by Warren, and have tried to paint her as a liar and a publicity hound.

They see her as the devil incarnate. I mean, I’m quoting from bankers. An idiot. Any way to undermine her.

In fact, a large part of the threat she poses to banks, said Andrews, comes from the depth and breadth of her knowledge of the industry. Andrews said the banking industry often uses Congress members’ inexperience to their advantage, even offering conferences on understanding financial issues—sponsored by the banking industry.

So it goes deep. The whole framework of understanding is framed by the banking industry, and Elizabeth Warren came in with her own knowledge and she challenged it.

Andrews said much of the frustration being given vent at Occupy Wall Street and elsewhere is in response to the resistance from large corporations toward contributing to their community citizenship. Warren often cites General Electric, which pays no taxes at all, as indicative of the inclination of wealth generating corporations to resist sharing that wealth with anyone outside of shareholders.

A lot of big corporations have tax loopholes that small business don’t, so there’s a division, even among banks. There’s a great deal of opposition to Elizabeth Warren from the largest banks.

Smaller community banks, said Andrews, tend to be much less opposed to Warren and also are exempt from many of the regulations that the Consumer Protection Bureau would impose.

There have been a number of calls for Warren to challenge Obama for president. Andrews has characterized the relationship between the two as fraught.

[Obama] was under pressure from some members of his own administration, most notably Timothy Geithner, not to appoint her. Members of Congress, including Democrats, Christopher Dodd in particular, disliked her.

Andrews said a lot of men find Warren’s assertiveness off-putting. Dodd, despite being one of the namesakes of the Dodd-Frank ruling which created the CPB, was against the Bureau’s creation and lobbied against it—a move which Warren opposed, fiercely and publicly.

Andrews agreed with Barney Frank's claim that one reason Elizabeth Warren didn’t get the nomination was sexism, but suggested that dynamics between Warren and the administration likely contributed as well.

She was a discomfort to the Obama administration. She was articulate, she was charismatic, and she articulated the message that I think a lot of Obama supporters had expected him to, and he didn’t.

President Obama explained his decision not to nominate Warren by saying that she was such a lightning rod for conservatives that she could never have been nominated, but Andrews finds that explanation lacking, as no nominee would have been likely to be confirmed. 

Obama didn’t move the ball forward by skipping over Elizabeth Warren. He didn’t avoid the fight. It just dropped.

 

In today's segment, the Brian Lehrer show played snippets of this video, created by supporters of Warren's Senate campaign: