Lately Sen. Elizabeth Warren has been talking about President Obama’s economic appointees – and it sounds like she’s pretty fed up.
Consider these words, from a Huffington Post essay she published earlier this week:
“I believe President Obama deserves deference in picking his team, and I’ve generally tried to give him that. But enough is enough.”
Warren (D-Mass.) was writing about Antonio Weiss, a banker with Lazard who has spent most of his career working in overseas finance – and was based in France for nearly a decade. That might not be much of a problem, if not for the fact that Weiss has been nominated for the post of Under Secretary for Domestic Finance at the Treasury Department.
Weiss, who is currently Lazard’s chief of global investment banking, was deeply involved with “corporate inversions” – a bland name for what happens when an American corporation moves overseas to avoid paying its taxes. One of the inversions Weiss worked on was the Burger King merger with Canadian corporation Tim Hortons (a move which resulted in some very angry – but sometimes entertaining – social media commentary.)
The White House has begun blocking some inversions, and has publicly denounced the practice. But its position is undercut when it appoints someone like Weiss to such a critical economic post.
Americans don’t like corporations who evade their taxes, according to the polls. They would presumably be unhappy to learn that their president has appointed someone like Antonio Weiss to a position of public trust – especially when the position holds lead responsibility for consumer protection, Dodd-Frank implementation, and what Warren describes as “a wide range of banking and economic and policymaking issues.”
Warren also pointed out that Lazard itself, where Weiss is a senior executive, exploited “a particularly slimy tax loophole” (to use Warren’s words) when it moved its official headquarters to Bermuda in 2005.
Is that who we want in this critical position? Warren doesn’t think so. And, in what amounted to a rare moment of constructive bipartisanship, neither does Sen. Charles Grassley (R-Iowa), who described the appointment as hypocritical. Sen. Richard Durbin (D-Ill.) has also expressed opposition.
Warren’s piece, which is well worth reading in full, also addresses what she describes as “the larger, more general issue of Wall Street executives dominating the Obama administration, as well as the Democratic Party’s overall economic policymaking apparatus.”
Thank God somebody’s finally saying it, in a voice loud enough to be heard.
Warren also had some stern words this week for Mel Watt, President Obama’s appointee to head the little-known but surprisingly powerful Federal Housing Finance Agency (or FHFA). As reported in The Washington Post, Warren interrupted recent Senate testimony from Mr. Watt several times in order to press him for an explanation of the FHFA’s inaction on behalf of struggling homeowners:
“You’ve done a whole list of really tough technical things, and I applaud you for doing that,” Warren said. “But people have lost their homes in the past year, and every day that you delay, more families lose their homes. There are 5.4 million families out there underwater, so I want to know, when are you going to have an answer on this?”
Watt’s response: “It won’t be as long as it has been — let me put it that way.”
That’s not good enough. It’s not even close.
Many, if not most, underwater homeowners have been directly or indirectly victimized by bank predation. But the administration’s senior economic officials have shown a disturbing tendency to treat them as if they were morally tainted and unworthy of support. At the same time, the administration has seeded top posts with executives from wrongdoing banks and has given Wall Street bankers a pass for widespread criminal fraud.
The president and his party have better rhetoric than their opponents on the subjects of bank fraud, consumer protection and a growth-oriented economy. At times they’ve passed good laws, too. But their appointments have often stood in marked contrast to their rhetoric. As Warren pointed out in an earlier editorial, both the Clinton and Obama administrations have been dominated by a “Citigroup clique” of bankers whose institution wouldn’t even exist in its present form had it not been for the assistance of President Bill Clinton economic team (some of whom later enriched themselves working at that institution).
As Warren wrote, “there is danger anytime the key economic positions in our government fall under the control of a single tight-knit group. Old ideas can stay around long after they’re useful, and new ideas don’t get a fair hearing.”
That’s a good principle, and it’s one that seems especially true of this set of individuals.
Perhaps the White House thought it was branching out by choosing an appointee from a new big bank, rather than continuing to draw solely on Citigroup. But that’s not the point. Antonio Weiss reflects a set of practices and values that diverges substantially from the values and policies our economy needs.
Mel Watt didn’t come from the banking industry at all, but was a member of Congress. A couple of years ago we were told that a Bush holdover was standing in the way of mortgage principal reductions, a form of relief that homeowners need and deserve – but President Obama’s appointee has the job now, and so far nothing’s changed.
Presidential appointees are thoroughly screened and vetted. They reflect the policies, priorities and preferences of the president who makes them – and, typically, of the party he represents. Once in office, appointees like these have reinforced the insular and self-interested perspectives that created our economic problems in the first place. It is a vicious cycle.
If we are going to have a better economy, those policies and priorities – as well as the kinds of appointees who determine them – must change. It is the president’s responsibility to lead that process of change, by laying out new goals and ending the epidemic of Wall Street executives that has blighted our economic policymaking machine. (Warren, to her everlasting credit, has characterized it more boldly as an “infestation.”)
It’s not surprising that Elizabeth Warren is fed up. The surprise is that more people aren’t. As the senator said: Enough is enough.