Elizabeth Warren
The global financial crisis of 2007, and continuing currently in the form of decreased lending by banks, continued home foreclosures and increased credit card fees by banks bailed out with taxpayer funds, and a stagnant job market with double digit rates of unemployment, was first revealed to the public at large with the collapse of companies directly involved in home construction and mortgage lending, such as the British bank Northern Rock, and the American giant Countrywide Financial. Over a hundred mortgage lending companies went bankrupt in 2007 and 2008. The fear that the huge investment bank, Bear Stearns, would collapse directly resulted in its liquidation to JP Morgan Chase (itself a recipient of 25 billion dollars of taxpayer bailout funds) in March of 2008. The crisis hit its peak in September and October 2008. Several major institutions either failed, were acquired under duress like Stearns, or were subject to government takeover. These included Lehman Brothers, Merrill Lynch, Fannie Mae, Freddie Mac, AIG, GM, and Chrysler.
This crisis perpetrated by blind American greed may or may not have been averted, or curtailed if the warning brought by Brooksley Born had been listened to, given credence, and acted upon. Considering the current dysfunctional political system our nation employs it seems unlikely. There will always be those who would place priority over making huge short term profits for themselves at the expense of the taxpayers, workers, homeowners, and the basic stability of the national and world economy. There are those in Congress who still adhere to a completely unregulated free market despite the overwhelming evidence that this has historically led to economic disaster for our country. Why? Because an unregulated free market system works for the ultra-rich elite who will amass tremendous fortunes, then exit the system altogether leaving the rest of us to pick up the pieces, if indeed we can. This has directly led to the disparity of wealth in this country, along with the Bush tax policies, a continuation of Milton Friedman's "Trickle Down Economics."
But Bush is no longer in office. He left at the onset of this crisis, one which he helped to facilitate. What shall we do now to pick up those pieces and insure that this never happens again?
Elizabeth Warren was a champion debator in the state of Oklahoma where she was raised. Indeed she attended college on a debate scholarship. This particular skill would make itself quite useful in the years ahead.
She attended Rutgers law school and graduated in 1976, then began her own business handling personal legal issues like wills, and real estate. She taught bankruptcy law at the University of Houston, and as she researched the issue she came to the conclusion that contrary to popular belief the average debtor, for the most part, was not involved in a massive scheme to "game" the system. Instead she found evidence to indicate that hard working people through no fault of their own were applying for bankruptcy protection due a sudden layoff or illness, or unplanned personal crisis like the death or departure of a spouse, and by 2005 was testifying to Congress against legislation sought by the credit card and financial industry to make it harder to file for bankruptcy.
Unfortunately this legislation was passed by Congress and signed into law by President Bush (of course), something I will never forgive our current Vice President Joe Biden for voting for.
Much to Senator Harry Reid's credit (no pun intended), although he disagreed with her, he took notice of Warren's passionate pro-consumer views and her ability to explain complex issues so that anyone could understand them, and appointed her to the TARP (Troubled Asset Relief Program) panel one year ago.
Since then she has reported before Congress, and in the media problems which are a direct result of the lack of transparency in the Treasury Department, like it paying out more than $78 billion more than the market value of the assets it purchased from banks. $78 billion, with a "B." She has also reported that despite the hundreds of billions spent on the bailouts, the financial system is still filled with toxic assets that could begin another meltdown, and that Treasury could offer no clear answer to Congress, and the American public regarding it's overall TARP strategy.
Like Brooksley Born before her, Elizabeth Warren is now facing criticism from those who would maintain the status quo. She has been accused of promoting an anti-bank agenda (considering that banks and investment firms got us into this mess it may not be a bad agenda to have. There are many, even Mr. Summers who still remains a major economic advisor within the Obama Administration, who state that the days of small banks are over. I tend to agree with the Independent Senator from Vermont, Bernie Saunders, who succinctly points out, "If it's too big to fail, then it's too big to exist: http://baselinescenario.com/2009/11/09/the-too-big-to-fail-too-big-to-exist-act-of-2009/, and efforts have been made to curtail her work.
She is now pushing a proposal, backed by the President, to help prevent the next financial crisis (realizing our propensity to forget, ignore, or just disregard our past mistakes, this seems like a wise and needed idea). She wishes to create a Financial Product Safety Commission to protect consumers from abusive lenders. She has written that mortgages and credit cards "should be subject to the same routine safety screening that now governs the sale of every toaster, washing machine, and child's car seat."
This idea of course terrifies the financial industry, and it's lobbyists have gotten to work in Congress which has begun to formulate legislation. The American Bankers Association, and The American Financial Services Association have begun fear mongering, stating this type of commission would "take us essentially back to the 1970s, where we had double-digit interest rates...and one-third the consumer credit available that we have now." Republicans in Congress have proclaimed this type of watchdog agency would undermine the health of banks. Financial policy analyst Jaret Seiberg said that the industry's worst nightmare is that should Congress create such an agency, Warren would run it.
What are they afraid of? Regulation. They are afraid, I believe, that they will no longer be able to get away with the same shenanigans that has brought this country to it's knees. I don't know... the idea of someone whose policy on selling financial products to an unsophisticated public is "If you can't explain it so the person on the other side can understand it, then you shouldn't sell it to them," would be a refreshing and needed change.
In a congressional hearing on October 23, 2008 Greenspan admitted that his free-market ideology shunning certain regulations was flawed. This has caused backlash from Objectivist thinkers, blaming the economic crisis on Greenspan's pandering to the mixed economy and betraying his laissez-faire views.
Sources for this post:
Washington Post, The Crash: What Went Wrong
By Anthony Faiola, Ellen Nakashima and Jill Drew
Wikipedia
Frontline: The Warning
Produced by Michael Kirk
Bank Buster: Elizabeth Warren is Wall Street's Worst Nightmare
David Corn
This crisis perpetrated by blind American greed may or may not have been averted, or curtailed if the warning brought by Brooksley Born had been listened to, given credence, and acted upon. Considering the current dysfunctional political system our nation employs it seems unlikely. There will always be those who would place priority over making huge short term profits for themselves at the expense of the taxpayers, workers, homeowners, and the basic stability of the national and world economy. There are those in Congress who still adhere to a completely unregulated free market despite the overwhelming evidence that this has historically led to economic disaster for our country. Why? Because an unregulated free market system works for the ultra-rich elite who will amass tremendous fortunes, then exit the system altogether leaving the rest of us to pick up the pieces, if indeed we can. This has directly led to the disparity of wealth in this country, along with the Bush tax policies, a continuation of Milton Friedman's "Trickle Down Economics."
But Bush is no longer in office. He left at the onset of this crisis, one which he helped to facilitate. What shall we do now to pick up those pieces and insure that this never happens again?
Elizabeth Warren was a champion debator in the state of Oklahoma where she was raised. Indeed she attended college on a debate scholarship. This particular skill would make itself quite useful in the years ahead.
She attended Rutgers law school and graduated in 1976, then began her own business handling personal legal issues like wills, and real estate. She taught bankruptcy law at the University of Houston, and as she researched the issue she came to the conclusion that contrary to popular belief the average debtor, for the most part, was not involved in a massive scheme to "game" the system. Instead she found evidence to indicate that hard working people through no fault of their own were applying for bankruptcy protection due a sudden layoff or illness, or unplanned personal crisis like the death or departure of a spouse, and by 2005 was testifying to Congress against legislation sought by the credit card and financial industry to make it harder to file for bankruptcy.
Unfortunately this legislation was passed by Congress and signed into law by President Bush (of course), something I will never forgive our current Vice President Joe Biden for voting for.
Much to Senator Harry Reid's credit (no pun intended), although he disagreed with her, he took notice of Warren's passionate pro-consumer views and her ability to explain complex issues so that anyone could understand them, and appointed her to the TARP (Troubled Asset Relief Program) panel one year ago.
Since then she has reported before Congress, and in the media problems which are a direct result of the lack of transparency in the Treasury Department, like it paying out more than $78 billion more than the market value of the assets it purchased from banks. $78 billion, with a "B." She has also reported that despite the hundreds of billions spent on the bailouts, the financial system is still filled with toxic assets that could begin another meltdown, and that Treasury could offer no clear answer to Congress, and the American public regarding it's overall TARP strategy.
Like Brooksley Born before her, Elizabeth Warren is now facing criticism from those who would maintain the status quo. She has been accused of promoting an anti-bank agenda (considering that banks and investment firms got us into this mess it may not be a bad agenda to have. There are many, even Mr. Summers who still remains a major economic advisor within the Obama Administration, who state that the days of small banks are over. I tend to agree with the Independent Senator from Vermont, Bernie Saunders, who succinctly points out, "If it's too big to fail, then it's too big to exist: http://baselinescenario.com/2009/11/09/the-too-big-to-fail-too-big-to-exist-act-of-2009/, and efforts have been made to curtail her work.
She is now pushing a proposal, backed by the President, to help prevent the next financial crisis (realizing our propensity to forget, ignore, or just disregard our past mistakes, this seems like a wise and needed idea). She wishes to create a Financial Product Safety Commission to protect consumers from abusive lenders. She has written that mortgages and credit cards "should be subject to the same routine safety screening that now governs the sale of every toaster, washing machine, and child's car seat."
This idea of course terrifies the financial industry, and it's lobbyists have gotten to work in Congress which has begun to formulate legislation. The American Bankers Association, and The American Financial Services Association have begun fear mongering, stating this type of commission would "take us essentially back to the 1970s, where we had double-digit interest rates...and one-third the consumer credit available that we have now." Republicans in Congress have proclaimed this type of watchdog agency would undermine the health of banks. Financial policy analyst Jaret Seiberg said that the industry's worst nightmare is that should Congress create such an agency, Warren would run it.
What are they afraid of? Regulation. They are afraid, I believe, that they will no longer be able to get away with the same shenanigans that has brought this country to it's knees. I don't know... the idea of someone whose policy on selling financial products to an unsophisticated public is "If you can't explain it so the person on the other side can understand it, then you shouldn't sell it to them," would be a refreshing and needed change.
In a congressional hearing on October 23, 2008 Greenspan admitted that his free-market ideology shunning certain regulations was flawed. This has caused backlash from Objectivist thinkers, blaming the economic crisis on Greenspan's pandering to the mixed economy and betraying his laissez-faire views.
Sources for this post:
Washington Post, The Crash: What Went Wrong
By Anthony Faiola, Ellen Nakashima and Jill Drew
Wikipedia
Frontline: The Warning
Produced by Michael Kirk
Bank Buster: Elizabeth Warren is Wall Street's Worst Nightmare
David Corn
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