The New, and Old, Attack on Elizabeth Warren’s Congressional Oversight Panel

Here’s a new Karl Rove funded attack ad on Elizabeth Warren, arguing that when she was on the Congressional Oversight Panel she bailed out the banks:

Robert Kuttner, Ari Berman and Simon Johnson have responses, noting, correctly, that Warren has been a big critic of the bank bailouts and a defender of the middle class.

To me, the most amusing thing about Karl Rove’s attack ad on Elizabeth Warren is that it shows how adaptable conservative attacks on liberals are.  Because I’m old enough to remember the attempts, mostly by conservatives but by several others, in early 2009 to say that Warren’s Congressional Oversight Panel was way too hard on the banks.

Doubt me?  Wayback machine back to Megan Mcardle, TARP Cops, April 22nd 2009:

As head of the TARP Congressional Oversight Panel, Elizabeth Warren has massively extended her mandate, using the office as a sort of forum for broad-ranging commentary on the financial crisis.   Rather than tracking the expenditure of the funds, she’s increasingly using the oversight board to push her own ideas about what should be done with the banks…Moreover, this isn’t her job.  Her job is to watch where the TARP funds go and monitor their effectiveness, not lecture Congress on how hard to punish wayward bank executives.

Mcardle, who has written thousands and thousands and thousands and thousands and thousands and thousands and thousands of words about Solyndra being the end of capitalism as we know it, seems somewhat contemptuous over the idea that people are going out of their way to demand accountability at the trillions of Fed lending and guarantees that were given out in the bailouts, while trying to find options on what can be done that aren’t decided in private rooms of Treasury officials and bankers.

Thomas F. Cooley, NYU Stern School of Business professor, went to his Forbes magazine column at the same time to attack Warren’s COP as being too hard on the banks:

The COP, however, apparently decided that its mission was too narrowly defined. It didn’t need to do more evaluation of what the Treasury was doing with the TARP funds. Instead, it should hold forth on how financial crises at large should be addressed…Clearly, this is Elizabeth Warren’s particular crusade against the banks…Her letters to Secretary Geithner and Chairman Bernanke stop just short of attacking them for trying to restart the market for asset-backed securities.

Needless to say, the meme that it was a terrible thing to demand more accountability from the Federal Reserve and Treasury Secretary Geithner about the bailouts and what options were available to the public never caught on with most voters.

I can say, as someone who watches the foreclosure market, that the only reason we know what we know about HAMP and other foreclosure mitigation efforts – especially their disastrous numbers – back then was because of Warren and the Congressional Oversight Panel.  That alone was amazing work, and they did a bunch of other crucial reports, necessary for the public to understand what was happening between the government and the banks.  They did heroic work getting to the bottom of what was going on, when the administration and the Fed was trying hard to hide information.

My favorite “Warren’s COP is too hard on the banks” moment was this aggressive Planet Money interview of Elizabeth Warren by Adam Davidson from May 2009. Lambert at Corrente wrote out some of the exchange (my bold):

ADAM DAVIDSON: What it feels to me is what you are missing is that — I think we put aside your pet issues…

ELIZABETH WARREN: …This crisis will not be over until the American family begins to recover. [More Davidson sputtering.] This crisis does not exist independently –

DAVIDSON: That’s your crisis.

ELIZABETH WARREN: No it is not my crisis! That is America’s crisis! If people cannnot pay their credit card bills [Davidson tries to interrupt] if they cannot pay their mortgages –

DAVIDSON: But you are not in the mainstream of views on this issue. You are not –

ELIZABETH WARREN: What, if they can’t pay their credit card bills the banks are gonna do fine…Who is not worried about the fact that the Bank of America’s default rate has now bumped over 10%?

DAVIDSON: The American families are not — These issues of crucial, the essential need for credit intermediation are as close to accepted principles among every serious thinker on this topic. The view that the American family, that you hold very powerfully, is fully under assault and that there is — and we can get into that — that is not accepted broad wisdom. I talk to a lot a lot a lot of left, right, center, neutral economists [and] you are the only person I’ve talked to in a year of covering this crisis who has a view that we have two equally acute crises: a financial crisis and a household debt crisis that is equally acute in the same kind of way. I literally don’t know who else I can talk to support that view. I literally don’t know anyone other than you who has that view, and you are the person [snicker] who went to Congress to oversee it and you are presenting averyvery narrow view to the American people.

History has proven Warren correct, and Davidson wrong.

The amusing thing is that since that interview the hottest research on the crisis has been on the concept of unemployment being driven through “deleveraging” as household-balance sheets have too much debt.  It’s what is driving interest rates into the zero-lower bound in Krugman and Eggerston’s theoretical models – see Debt, deleveraging, and the liquidity trap, or Sam, Janet and Fiscal Policy. We covered three distinct ways of thinking about deleveraging and other expansionary policy at this post.  More importantly, it is what is driving unemployment in the empirical work – here is Atif Mian and Amir Sufi of the Federal Reserve Bank of San Francisco:

Atif Mian and Amir Sufi have a Bloomberg column – titled “How Household Debt Contributes to Unemployment” (!) - summarizing their latest research in the balance-sheet effects of this recession. Here’s Calculated Risk covering their research.  I’m going to have an interview about this research up next week – so stay tuned.  You can’t go 10 yards in these current debates over the economy without someone mentioning or reacting to the idea of “deleveraging.”  Davidson can no longer “literally” not know anyone who thinks this is part of the crisis, and his idea that backstopping the TBTF banks – even if it constrains or ignores our ability to deal with the debt overhang – is more important is barely spoken.

But yes, to recap.   Back then Warren was on a mad campaign to demand too much accountability for the bailouts and a crazy crusade about household balance sheets that no respectable person would care about because she cares too much about working families.  Now Rove funds attack ads saying Warren is a bailout queen who throws working families under the bus.  Even though every respectable person has caught up and knows the consumer balance sheet is important topic of discussion in this recession.  Amazing how shameless the Right’s attack machine is.

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15 Responses to The New, and Old, Attack on Elizabeth Warren’s Congressional Oversight Panel

  1. Jon says:

    Excellent commentary from Jim Rogers on which industries in China will have a hard landing (Real Estate) and which are poised for growth (water treatment, agriculture, etc). Worth watching.

    http://djia.tv/jim-rogers/jim-rogers-the-street-com-06-dec-2011/

  2. re: “adaptability” of conservative attacks. Maybe, or maybe they’re just the same old same old. This is Rove’s signature and very consistent attack–take the target’s clear strengths and turn them upside down. It’s Kerry all over again.

  3. Ted K says:

    I tend to be the cynical type that bitches, moans, and belabors our current group of officials and private executive leaders. If there is a negative I can usually find it. I have one thing to say about Elizabeth Warren: The woman is a Saint and I would sooner trust her with my life savings than Mother Teresa (when she was living).

    Mike, I emailed this first link to Yves. Knowing her she will ignore it, as it might not fit whatever narrative she’s been tidying. I also send a second link, which is less interesting but ties in together with the first link. Worthy of a skim if nothing else.
    http://www.latimes.com/business/realestate/la-fi-nevada-foreclosure-20111210,0,5514369.story

    http://www.latimes.com/business/realestate/la-fi-mortgage-probe-20111207,0,7895467.story

  4. someofparts says:

    So many people agree we need to get the money out of politics. Oh how I wish enough people realized we need to get the money out of media too. I want something closer to the BBC, or laws like the Canadians have that just forbid lies like KKKarl R peddles, or just a return of the Fairness Doctrine. I wish more people took this seriously. Back when we had the Fairness Doctrine in place, Rove could not have gotten away with the things he does.

  5. Ever since Reagan’s “Morning in America,” the GOP has known that it can say things having absolutely no connection to reality. They’ve only been called out about it once, as far as I recall: the 1992 campaign that Clinton raised taxes (hundreds of) times while Bush only raised taxes once.

  6. Ted S says:

    The startling thing is how conservative voters will just accept these nonsense ads as being the truth without ever questioning. Just like every Limbaugh or Hannity lie that came directly from the president, where they take 3 words from a 3000 word speech, and tailor it to an Obama “socialist agenda” or “death panels” or “rolling back the 2nd amendment.” Rove and the GOP have this down to a science.

  7. wetcasements says:

    I love how an innumerate writer like McCardle never got around to finishing “Part II” of her ostensibly epic takedown of Professor Warren.

  8. Fusion says:

    I’m stunned by Rove’s blatant dishonesty – can Elizabeth Warren file a defamation suit against him whoever approved the ad. It’s time that Rove is held accountable for his words — and for his lies.

  9. ezra abrams says:

    Sigh
    How do you loose elections ? long fact laden posts that maybe 5 people read
    How do you win elections ? hard hitting, unfair, below the belt attacks (see the Caro Biography of LBJ for a master at work)
    So, this blog and all the other liberal blogs, gnashing their teeth and spending a lot of energy pointing out the obvious factlessness of roveism, all this is actually counter productive

    what would be productive ? how about someone digs up some video of scott brown hugging haley barbour, or eric cantor or some other figure loathed in the State of MA

  10. ezra abrams says:

    in a way, the ad is accurate: it was the liberal dems who supported TARP I
    Who can foget the video of B Frank, saying where are these guys [gop members who supposedly voted no cause N Pelosi was mean] – I’ll apologize
    So, in a way, that is completly unethical and wrong, yet right to, rove has it right: E Warren stands for the democratic machine that supported TARP I and failed to prosecute one ****ing banker on crimminal charges.
    which is why the ad is effective, and all the liberal bloggers furiously fact checking are wrong

    PS: fair disclosure, I don’t like warren, I think she is arrogant, I don’t know how on earth she got 150K in consulting, and I don’t want to elect someone stupid enough to attack a sitting chair, which is what she did in her last cong testimony

  11. Dana says:

    Forcing seniors out of Medicare and into a government-run health care programs meets Max Cleland colluding with Osama bin Laden.

  12. Marina says:

    Excellent post. I still remember how furious I was about that Adam Davidson interview (he lost a lot of fans with that one). Now, he and his buddy Alex Blumberg include, as part of their spiel, the notion that we are seeing the results of a “tectonic shift” that began in the late ’70′s, in which a large segment of Americans saw their wages stagnate and earnings came to be replaced with borrowing. Wonder where they got a crazy idea like that :)

  13. Mike Sax says:

    Lack of shame is what they’re about, it’s what they do. How else do you have the two leadaing
    Republicans, Gingrich and Romney campagining against “ObamaCare” which is actually a Republican idea? Gingrich proposed the individual mandate in 1993 and Romney passed it in Massachuesetts.

    Hopefully Warrne gets into Mass and can do some good though it’s harder as one 1 out of 100 Senators-and a freshman to boot.

    Incidentally, to all MMTers or others with an intersst I seek to engage Warren Mosler and others about optimum tax policy here I talk taxes with Warren Mosler and the MMTers

    http://diaryofarepublicanhater.blogspot.com/2011/12/open-letter-to-warren-mosler-and-mmters.html

    All informed perpsectives are welcome!

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