TARP Chief Elizabeth Warren: “It’s the Bank Lobbyists vs. American Families”

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Elizabeth Warren is the Leo Gottlieb Professor of Law at Harvard Law School.  She teaches contract law, bankruptcy, and commercial law, and has devoted much of the past three decades to studying the economics of middle class families.  She is also the chair of the Congressional Oversight Panel created to investigate the U.S. banking bailout, known as the Troubled Assets Relief Program…

She is a leading advocate for accountability and transparency. In 2007, she also advocated the policy of creating a new Consumer Financial Protection Agency, which President Barack Obama has supported, against the wishes of the banking lobby who is against it in a big way.  I believe where things stand now is that Congress has asked the banking lobby for permission to at least appear as if it’s debating something having something to do with consumers.

Appearing on Bill Maher last Friday, Elizabeth Warren said several things I think are more than worth noting, so I am noting them here.

Elizabeth began by stating something so striking that I had to run for paper and pencil to jot it down.  Bill Maher was asking her what’s happening in Washington D.C. these days and she replied:

“It’s Bank Lobbyists vs. American Families.”

Warren then went on to say: “Six months ago, I really thought that we were on the brink of financial reform.”  In response, Maher asked her what she was smoking back then.  The audience laughed.  I did not.

Bank Lobbyists vs. American Families?  Wow… I didn’t even know they were both playing in the American League.

Actually, I don’t want to be even moderately funny about this topic.  The Harvard professor who has spent the last thirty years studying the economics of middle class families just said that in the United States of America, there is some sort of battle being waged between a well-funded special interest group representing the financial services industry… and American families.  Ah yes… the classic tale of high-powered Wall Street executives locked in a struggle with… my family?  Why is it that I feel like the Washington Generals and the fix is in?

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Warren then went on to say: “Six months ago, I really thought that we were on the brink of financial reform.”  In response, Maher asked her what she was smoking back then.  The audience laughed.  I did not.

She said: “The problems could not be more obvious, and quite frankly the solutions are just about that obvious, but we can’t seem to get the two together.”

At this point, I had to remind myself that a Harvard professor who was placed in charge of overseeing a $700 billion bailout of our financial institutions and a handful of miscellaneous others, just said that the problems couldn’t be more obvious and the solutions the same… but even though we’re still sinking fast into a lost couple of decades, we just can’t seem to get our act together.

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I hit the pause button on my Tivo.  Breathe.  Fight the urge to weep uncontrollably.  Make a mental note to ask my physician to write me a prescription for Ativan.  Okay… back to the show.

Bill asked why this was more of an explanation and she replied:

“The reason that we’re not changing things in Washington is that the banks have lobbyists in Washington in numbers I’ve never seen.  They’re coming not just once a month or once a week, or even once a day.  These guys are coming in two, three, four times a day.  They’ve got their position papers, and they just keep slamming in the same direction over and over and over.  And people that want to advocate for American families, that want some changes, or want to level the playing field just don’t have that kind of lobbying power.  And so what we’re really watching here is a David and Goliath story of monumental proportions.”

I don’t recall being taught about this in 8th grade civics or 10th grade U.S. History.  When did our system change like this… and for the record, I liked the old words to our anthem much better.

My country used to be

More than an economy

Of thee I sing

Land where I bought my house

When I still had a spouse

Next time I’ll vote for Mickey Mouse

Or move to Bejing

Now we pledge our thanks

To those that run the banks

To take our country back, we may need tanks

Let freedom ring

(No judgments … it’s a work in progress, remember.)

Warren closed out the show making a couple of comments about the Credit Card Reform Act, which was passed by Congress and signed by the President last year, and went into affect on Monday of this very week.  You might remember my article’s headline about a bank with a 79.9% interest rate.  That’s the result of that whole reform thing too.  Here’s what Warren had to say:

“Credit card reform… It’s like we put up ten fence posts in a wide open prairie.  If you smack straight into one, you really will get hurt.  But if you want to hire just one lawyer, let alone an army of lawyers, you can just run a little to the left or right of the post and it’s business as usual.”

The banks get to hire lawyers?  I don’t understand.  Do they pay them once the fence post has been struck, or just for moving it?

The Center for Responsible Lending published a report about a week ago saying that of the ten bad credit card practices that have been outlawed by Congress, the banks have already figured out eight new devices for getting around them.

Have they now?  Well isn’t that nice.  How does Congress feel about that report?   When the banksters show up on Capitol Hill does one of them kneel down behind Rep. Frank and the other push him over?  What’s going on around here?  What happened to this old legislative process: Click Here!

In closing, here are the immortal words of Simon Johnson, who was the Chief Economist at the International Monetary Fund (“IMF”), and now teaches at M.I.T.

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

That’s it and that’s all.  Nothing funny about that…

Ergo bibamus!

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