The War on Warren

The attacks on Elizabeth Warren are meant to block credible consumer protections.

Comments: 125

  1. It is no big shock to me that Republicans would attack Professor Warren. She is a powerful voice that fights for working class folks and who highlights the abuses of the system by the banksters and Wall Street financiers that the Republicans try so hard to defend.

    What is more of a shock to me is how, time after time, voices who were entirely correct on a major issue continue to be largely ignored, while the folks that create major problems continue to be turned to as the people whose advice we should follow.

    Professor Warren and others who warned us in the early to mid-2000s of the dangers of the deregulation being carried out by the government and the financial shenanigans being carried out by Wall Street are one example. While Professor Warren has a platform thanks to the Obama Administration, the architects of our economic meltdown have much larger platforms, both in the Obama Administration and throughout the media.

    A second example is Professor Krugman and his fellow Keynesians. They warned us time and time again that the stimulus bill would be too small and that further stimulus would be needed to achieve real economic recovery. And while the economy is slowly recovering, we are still struggling with 13.2 million Americans unemployed, 15.9% underemployed, and low economic growth. And yet, rather than listening to the Keynesians, the media and Republicans refuse to approve of any further stimulus and, instead, are focused on spending cuts that will imperil what economic recovery has occurred.

    A third example is with the Iraq War. A number of people warned us in advance that the war was a horrible idea, would require far more resources than were being predicted, and would take our eye off the ball of capturing or killing Bin Laden. Yet the foreign policy establishment and virtually all of the voices trumpeted by the media are the folks who advocated for the Iraq War, while opponents continue to be virtually silenced on foreign policy issues.

    From the standpoint of effective governance, the ability of conservatives to fail upward and continue to be seen as the only voices that should be listened to makes no sense. What it does show, however, is that the contention that our media is liberal is as laughable as the contention that magic unicorns exist.

    http://www.winningprogressive.org

    http://www.facebook.com...

  2. I have tremendous respect for Elizabeth Warren, and for the job she is trying to do, but I would not want to be in her shoes. Anyone with the courage to stand up to the abuses wrought by the wealthy and powerful will be subject to vicious attacks designed to destroy him or her. If you do not believe me, just ask Client No. 9.

  3. There is little reason to think President Obama will take advantage of the opportunity. He has bought Republican lines of "reasoning" hook, line & sinker. Especially the sinker. Not only has he chimed in on their deficit-reduction meme -- he already promised in a radio address two weeks ago to make even more cuts to the most austere budget since Eisenhower was president -- he has, ominously, vowed to overhaul the federal regulation structure.

    It may well be that some regulations can be streamlined, although his famous example of the regulation of salmon by several different agencies, which he made a joke of in his State of the Union address, did not endear him to agency regulators, all of whom said the division of power made sense and worked well.

    In January, President Obama also signed an executive order to "improve" regulation. He invited public participation. That sounds good, except we know who the "public" will be -- the businesses that are suffering so much under onerous regulations. To signal to the business community the government was, well, open for business, President Obama announced his executive order in a Wall Street Journal op-ed, in which he opined, "rules have gotten out of balance, placing unreasonable burdens on business -- burdens that have had a chilling effect on growth and jobs." Sure sounds like something right out of the Republican playbook, doesn't it?

    Joe Nocera of the Times said Elizabeth Warren did a great job fending off Republicans on the subcommittee that made her the sole witness for a two-and-a-half-hour grilling. While Republicans were practically pretending there was no financial crisis in 2008, they also expressed a new interest in reining in state attorneys general who are chasing mortgage lenders. What happened to states' rights? I thought Republicans were re-litigating the Civil War when it came to states' rights. Oh, wait, they only invoke states' rights when convenient, as when they try use the principle to undermine the Affordable Care Act.

    Warren wouldn't let the committee members get away with their revisionist Right Wing World history. "If there had been a cop on the beat to hold mortgage servicers accountable a half dozen years ago," she said, "the problems in mortgage servicing would have been found early and fixed while they were still small, long before they became a national scandal."

    She stood up to the Republicans. Now, can she stand up to President Obama? I'm guessing the answer is yes. Hillary Clinton did. So did Susan Rice. And Samantha Power. And Nancy Pelosi. So I say to Warren,

    You go, girl. Not that I think Elizabeth Warren needs any advice.

    The Constant Weader at www.RealityChex.com

  4. War on common sense appears to be the goal of the present day Republicans, defending principles that cannot be defended by reality or reason. Anyone who has listened to Elizabeth Warren, as the general public first heard on The Daily Show in April of 2009 - http://www.thedailyshow.com... - she is the person to attempt to lead America's financial system back to a responsible path for prosperity.

    An educated, experienced, eloquent, dedicated woman is the Wall Street of the past decades biggest fear, so it is no wonder she continues to be attacked, but the joy some take in attacking her shows their complete disregard for America's future in favor of their donors present day concerns - a desire for short-term profitability. A reasonable person realizes this is not a path for the long-term prosperity for the nation and it's peoples.

    Those of us dedicated in the hope of a better future are also dedicated on creating division amongst ourselves, making unity nearly unheard of, but uniting behind Elizabeth Warren, a strong and dedicate women, to direct America back to a path of financial sanity is as desperately needed as any other forward looking policy facing our nation. Without a sane financial system, our nation is doomed to destruction from a further consolidation of financial activity at the expense of what made America great, a functioning capitalistic system that encouraged development and investment, not trickery, gimmicks and outright fraud.

  5. Of course, the attack on Elizabeth Warren is a perfect opportunity to highlight just who is in Wall Street's pocket. But let's not count on the White House to do the highlighting. Lest we forget, a former executive of JP Morgan Chase, Bill Daley, is now Obama's chief of staff. The treasury secretary, Timothy Geithner, has always been less than enthusiastic about Warren's permanent appointment.

    And last but not least, there is Gene Sperling, Obama's national economic council director. Sperling, it will be remembered, worked with Clinton Treasury Secretary Larry Summers to help Republicans craft the repeal of large portions of the Glass-Steagall Act. Even Obama, as a candidate, said he believed the deregulation of the financial services industry made possible by that repeal caused the mortgage meltdown and the subsequent crash. That didn't stop him from appointing Summers and Sperling to his economic team, though. His actions, as we have come to expect, speak so much more painfully and loudly than his words.

    When the president called the Baker's Dozen top banksters for a sitdown in the Oval Office in 2009 to beg them to forgo their bonuses that year, he famously told them that only his administration stood between them and the pitchfork-wielding mob. Fast forward two years, and the only person standing between the bankster/political cabal and the pitchfork-wielding mob is Elizabeth Warren. Obama, unfortunately, has proven himself to be just another tool of the oligarchs. His silence on Warren's permanent appointment speaks volumes.

    I have heard calls for an Elizabeth Warren/Nancy Pelosi presidential ticket - maybe not this time, but something to ponder for 2016. These true Democrats, these wonderfully strong women, would win by a landslide. While we're waiting, let's clamor for a Warren confirmation hearing this summer. Greedy men making fools of themselves on national TV by attacking consumer protection will be an entertainment well worth the price of admission. It could even be the beginning of the end of the Republican Party itself.

    http://kmgarcia2000.blogspot.com/

  6. This is the first time I can recall where a Washington bureaucrat had the ability to create his/her own agency, that is NOT answerable to Congress, and then run it with hardly any review. I believe that the head of this new agency is one that is to be nominated by the President and confirmed by the Senate. If that's the case, let President Obama nominate her (no recess appointment here, please!) and the Senate confirm her, if it will. Since the Senate is in democrat control, its probably a done deal, but at least keep them honest and make them go through the process. If she is successful through that process, then maybe the upside will be that she will only hold the post until early January, 2013.

  7. Bankers and the damage they wrought have faded from view?

    Have you checked the resumes of Obama's fiancial team (other than Ms. Warren?) They are the same Wall Street crew that broke the bank in 2008.
    Speaking of 2008, which candidate got more Wall Street money for his campaign? (hint: it wasn't McCain).

  8. "The interesting question now is whether the Obama administration will see the war on Elizabeth Warren for what it is: a second chance to change public perceptions. "

    Yes, but perhaps the really interesting (or not so, since it appears to already have been answered) question is just what are the Obama administration's real values. To all intents and purposes it is apparently to support corporate interests while putting a smiley face on policies that are preciously little different from those of its predecessor.

    Somehow I think I hear the folding of Obama's deck, again. He appears to pretend to back "change you can believe in" and then he tells you the only change you can have in America is the chump change of same old, same old.

    www.jonjost.wordpress.com
    www.cinemaelectronica.wordpress.com

  9. "Later, she took the lead in pushing for consumer protection as an integral part of financial reform, arguing that many debt problems were created when lenders pushed borrowers into taking on obligations they didn’t understand."

    What Paul Krugman is saying is that some borrowers are stupid and banks should not lend to stupid people.

  10. Don't worry, Paul. This bunch of bumblers in the White House won't do anything except declare war on another Middle Eastern country-- it's not as if we don't have enough wars going on! Meanwhile, the bumbler- in-chief is off to Brazil, just like he was off to India after the Congressional Meltdown of 2010. More public relations. Only the Brazilians don't vote here. This lifetime Democrat will probably stay home in '12, and not participate in this charade. I've had enough. Big losses coming in Congress, 2012.

  11. Attack Elizabeth Warren, attack the middle and lower classes. Hmm, a government that attacks its citizens. I think I've heard of such a thing recently.

  12. Thank g-d for Warren and Krugman regarding their articles and opinions on the economy and recent financial crisis. Sometimes I wonder if anyone else thinks like I do--and I live in California. But when I hear or read most of the national news about Wall Street and Republicans in Congress, I get so depressed. Why can't Obama act more like a leader on issues he supposedly espouses?

  13. If Republicans know anything (and this is an open question), they know how to take advantage of the sound-bite mentality of the general public. They know that if you repeat a lie often enough, a sizeable fraction of the public will absorb it, and their knees will jerk obediently and in the desired direction when it comes time to vote. Sadly, I’m sure there are conservatives who lost homes to foreclosure who think Elizabeth Warren is the enemy.

    Republicans are expert at redefining issues, distracting voters by dangling shiny distractions to divert their attention from unpleasant realities. What I don’t understand is the apparent complacency of Democrats, who don’t seem to have the will to call out the Republicans when they play these games. Mr. Obama doesn’t seem to realize that politics is a competitive sport, which is a surprise since anyone who understands what it means to get a bloody lip playing basketball should know you’re suppose to make it difficult for the other team to score. At the very least, you shouldn’t let them bring a ladder to the game and then hold it for them while they climb up to make their points. Republicans are very good a making unanswered points. The least the Democrats can do is cry foul.

  14. Dear Professor Krugman,

    I know you want to play as politely as possible with the current administration, but you go beyond just "stretching the truth" when you state in this column that the Obama administration passed significant financial reform or regulation.

    In light of the enormity of the criminality behind this crisis, any claim that the weak reform passed by the administration is "significant" is a full-on falsehood. ("It's a travesty of a mockery of a sham of two mockeries of a sham," as Woody Allen would put it.) 

    Those who would like a FACTUAL description of the weak financial "reform" under the current administration can listen to Charles Ferguson's interview taped earlier this month at The Commonwealth Club of California, wherein he essentially ripped the administration "a new one." Ferguson, as you know, is the director of "Inside Job".

    The Ferguson interview podcast is here:

    http://pyr.commonwealthclub.org...

    I know there's an upcoming election, Professor, and I know you mean well, and I know it would be so much more palatable to blame everything on a party even uglier than ours, but please stick to the facts. 

    Why? Because failing to hold our own party to its promises is a large part of the problem, and it can't simply be ignored by complaining about filthy Republicans. 

    By the way, do you really think the Republicans could attack Warren so thoroughly if the Obama administration had EVER stood up for her early in the game? Geithner and Obama threw this woman to the GOP wolves. I suspect you know that.

    http://draftspitzer.blogspot.com/

  15. The reality is the Republican Party is waging a war on the American people by neglecting their needs for the last 30 years. They want to cut every social/domestic and many regulatory programs under the pretense of controlling Deficit spending, not just the CFPB.

    Unfortunately, the CFPB will be collateral damage. The Republicans have already stated they will underfund this new agency if it ever gets off the ground. That means it will lack the resources to carry out and implement its mission. Since the Republicans control the purse strings in the House this isn’t a bluff and we all know ideologues never compromise. Their (and many Democrats) modus operandi has been that deregulation and laissez faire always trump all – there is never any middle ground. Exhibit A: the worst financial meltdown since the Great Depression.

    As for the political support from this Administration, don’t hold your breath. They have demonstrated they are in bed with Wall St. and the bankers time and again. With Geithner in charge, you can be sure the Administration will neuter any regulations coming from the CFPB. Wall St. and the bankers always come first – just look at their record profits! They will not publicly come out against Ms. Warren, but they won’t waste any political capital defending her either. This Administration has already deposed of former Federal Reserve Chairman Paul Volker because he didn’t conform to their laissez faire positions. Instead, they will let the Republicans do the dirty work while trying to build a bridge with the financial community because elections are just around the corner!!

  16. "The interesting question now is whether the Obama administration will see the war on Elizabeth Warren for what it is: a second chance to change public perceptions." [Paul Krugman]

    If only it would be so, Dr. Krugman. Unfortunately, most of the time the Obama administration is only interested in seeing which way the winds of public perception will blow — so that it can go with them. (Another substantial portion of the time, the administration is actively carrying water for the rich and the corporations).

    Since the Republicans waste no time and spare no effort in rousing, fanning, and directing regressive public opinion, of course progressivism gets the shaft.

    As far as "highlighting exactly who's really in Wall Street's pocket these days", I view Obama's willingness to stand up for Elizabeth Warren as a litmus test of whether HIS administration is irredeemably in Wall Street's pocket. (I already know that the overwhelming majority of Republicans are). I've about reached the point that I believe that primary and/or third party general election challenges by progressives are this nation's only hope within the confines of the electoral process.

  17. Looking at it from the Snidely Whiplash point of view, why would you want someone with the integrity of Warren overseeing what you're up to? Making sure the least savvy sucker you can scam takes out a loan with negligible knowledge of just how dangerous doing business with the likes of you includes making sure no one with any integrity knows what you're doing. It will be interesting to see the what the results of a recent survey taken asking what respondents think of banks run by people like these.

  18. I certainly hope that the White House makes the most of this opportunity to revisit the unethical players on Wall Street. Not only is it the correct thing to do, it would be a big step toward winning back its base.

  19. We are doomed to repeat this mess. Obama is more paranoid about being perceived as anti-business than he is being his own man and leading. He is as inexperienced as Bush, the difference being Bush was anti-intellectual,smug and a disaster, whereas Obama is going to be cautious and gather all the facts and eventually try to middle the thing.

    Either way equals bad results. At least Bush delivered to the people who paid his way and handed him the job. Obama will have done no such thing. Just like the Wisconsin voters have learned, we get what we deserve.

  20. I think the country is in a very regrettable position. How did these Republicans get back into power? Wasn't it their philosophy of laissey-faire capitalism which led to the financial crisis in the first place? How and why do people vote against their own economic interest? Could it be an innate sense on the part of the middle class that if their bosses aren't happy they will be made to suffer? Does it take outrageous acts, such as those committed by Scott Walker and his band of thugs to convince people that their most valuable possession is their right to vote? I think our problem is that simple people have been forced to open their eyes in a very complex world. Not only that, but intellectuals, like yourself professor, don't seem to have a very high regard for the extent of their naivite. It is one thing to fight the good fight in professional journals on the PhD level, and another to explain rather complex thoughts to the layman. But it is the laymen who votes. It is the layman who decides who represents him and who leads him. Remember the 1980 series "Free to Chose." I do. I remember Milton Friedman standing in front of a printing press at the US mint while it was rolling out hundred dollar bills. It was an effective image. So effective that it got Ronald Regan elected president. Ironic is it not, since Regan immediately inflated the national debt to a level from which it has never recovered. To my way of thinking there is one over-riding question facing us today; can we afford the kind of society that we all want; one which pays for affordable health care; one which offers everyone a job; one which extends the hand of opportunity to those who are willing to work and educate themselves; one which has respect for its environment; one which demands that the rich contribute their fair share. I think the answer is yes, but only if the middle class understands that letting themselves be exploited by corporations only takes them further away from that ideal. Fear is a potent weapon, especially when it is proffered by experts, such as the editors at Fox News. The only way to fight it is with the truth coming from those with the courage to speak it. As Paul Henreid said to Humphrey Bogart in "Casablanca," "Welcome to the fight, Mr. Blaine."

  21. A politically connected friend From Ma. shared an interesting rumor this weekend.
    Elizabeth Warren is thinking about running against Scott Brown in Ma. 2012.
    If it's true, where do I send a donation? She will get every political and charitable dollar I give yearly to save my Grandchildren from a predatory financial class that is destroying this nation both overtly and subtly.

    Elizabeth-- continue to have courage and strength. You are keeping the wolves of Wall St. from devouring us all.

  22. Go, Krug! Somebody needs to say it, especially since the prez and his people don't seem to have the stomach for confrontation, even when it's healthy for the nation. There are positive sides to Obama's aversion to conflict - though precious few, it seems to me when you're dealing with the people who have bent over backwards to first welcome in, then give the steering wheel to, the old Southern Democrat fundamentalist xenophobes. And as is the want of fundamentalists, as soon as they get some power, rather than look to the nation's interests, they try to punish those who disagree with them. "Jobs, jobs, jobs" they shouted during the election. Turns out that meant snow jobs and hatchet jobs.

  23. As the song goes, 'When will they ever learn, when will they ever learn?'. The answer is never. Greed will continue to force them to try and cloud the memories of the public in their favor. So Elizabeth Warren IS the answer. WE must be protected from them. My life has gone down the toilet almost completely, so it is too late for me, but for future generations, we must have an Elizabeth Warren to keep Wall Street's greed from destroying them.

  24. She must demonstrate some basic concept beyond lender = bad: debtor = good and look to preserve competition to drive down costs. Many of the reforms now being put in place are actually detrimental to borrowers by reducing competition. Wholesale lenders, acting through brokers are consistently providing loans at lower rates, and with better service than the big banks. Yet teh reforms have resuklted in further concentration of risk as Wells Dargo now looks to move past the limit of 10% asset control, The big lenders move form 40% of teh markjet to well over 50% of new loans and small lenders are limited in compensating their employees. Yes its true a Million dollar loan must be compensated just as a 150k co op loan which means that few will offer servicees in that arena once again shafting the small borrower/ consumer and small lenders and brokers who service them. In other words borrwers borrowing on the low end of the spectrum will be serviced by $12/ hour skilled workers or overpay at big banks who are largely exempt form such concerns...

  25. That's correct. My business, the classical music business, has financed musical productions for at least 40 years on personal credit cards. I remember my professor at Manhattan School of Music, 1970, paying back over a hundred thousand dollars from credit cards accrued during a tour. We all did it. Except in the 90s the rules changed and a festival that I produced on my own back in 2003 came back to haunt me and I have literally paid the debt off twice and am on the third turn all because of usury allowed by the Congress setting up new rules with inadequate notice. Who read those four pages of tiny print? Well, it stopped my work for seven years as I have taught students to pay off the credit cards and loans. I now know that America is against my business and the current attack against classical radio stations is just the final straw. I love Elizabeth Warren. She's from my home state and she is the only antidote to Tom Coburn who is a disgrace.
    Ray Evans Harrell, Artistic Director and producer The American Masters Arts Festival 2003 and the Florentine Conference on Economics and the Arts 2004.

  26. Can it be any clearer who the Republicans work for? Surely it is not for the average American. There is nothing really regulatory about making sure that consumers actually understand what they are getting themselves into before they commit. Thus if a product is so sophisticated that many in the banking community couldn't understand it, why is it appropriate to burden consumers with figuring out what they are buying. For a free market to properly function participants must have as close to perfect information as possible, otherwise informational bias leads to market imbalance, thus. The mortgage crises. On the Daily Show. Ms Warren spoke about making sure the products are understandable. While I understand the republicans see this as regulation, I see it as creating a perfectly competitive market. It is competitive and free markets the US was built on as opposed to mercantilism. Capitalism is only useful to the extent that it abetts a fee market. To "regulate" capitalism to ensure free markets is to keep us from under the implicit contol of the princes of capitalism, and keep the system working for the American people as opposed the vice versa.

  27. The attacks on Elizabeth Warren are being orchestrated by some consortium of anti regulation zealots. I hope maybe you Mr. Krugman can help to identify them for us. It is not just the Republicans in Congress, it is also the WSJ, the Chamber of Commerce, the banks, and almost any organization that makes loans, issues credit cards, or collects interest on debts.

    Fleecing the consumer is big business, it always has been, and that is how we came by the regulations that were ignored by the past few administrations. There is a long list of schemes perpetrated to separate the mark from his money, and the difference between them and the con games of hucksters, is their legality. We are told that if credit card abuses are stopped, it will cause unemployment. Well we can see who will be unemployed if they can not get the mark to sign on the dotted line.

    The prophets of the free market ideology make a good case for the system, and it would probably work, except it doesn't. So there must be a contradiction in their philosophy. The flaw in the free market logic is the human factor. Computer projections are fine. Logical exercises are fine, and they show the free market to be the best form of capitalism. The Quants in the securities industries made their projections, and placed their bets. But the roulette table of the market has some extra slots that increase the odds, and that is human behavior. The assumption is that most people will act in a predetermined manner, and in fact they will. The problem is that percentage that falls outside one standard deviation form the mean. The problem arises from the fact that only 68.2% of those acting on a particular stimulus fall within the normal behavior pattern.

    Recall that the mantra of the free market gurus was, that the market was self correcting because the people using it, and dependent upon it, would not abuse it, as it is not in their self interest to do so. That is probably true for that 68.2% of those involved. Unfortunately that does not take into account the other 30.8% who do not fall within that group, and it is the 15.4% who are below the one standard deviation from the mean who can and do bring the system down.

    Keep in mind, the Quants projected it would take about a 15% failure rate, to cause the CDOs to start failing. The 15% was looking them right in the face, but these were math whizzes, not people oriented types. It is that 15% that does need to be regulated and watched, as these are the deviants. These are the ones that are already looking for some way to separate the sucker from his money. Unfortunately, the sucker is the regular working person. The one who does not understand all the legalese in the buyers contract, the terms and conditions in the mortgage loan, or the credit card agreement. That even well educated people got caught up in the mortgage game, should be warning enough about just how shrewd these operators are.

    For my money, the motives behind opposition to Elizabeth Warren are greed and avarice. That 15% of deviants are anti-social. They do not want the consumer to have any kind of power to control how they are treated. They are control freaks, and they are the ones who want to control the consumer's rights to fair and equitable treatment.

    For the Republicans to claim they are acting in the interest of the consumer is just plain hypocrisy. But then we have seen this from them before. Their party should be renamed the Hypocritical Party. Recently we have seen them voting to overturn scientific results. We have seen them rewarding penurious behavior, so what is to stop them from rewarding their cohorts in economic stealth and finagling?

  28. Prof. Krugman thinks that 2008 was a wasted opportunity. I'd say it was an opportunity exploited very well. I go by actions, not words, not by people who SAY they feel for those who lost their homes, but by what the decision makers actually do and what's really happening:

    In the years preceding 2008, beginning under President Clinton and continuing under Bush, Jr., aggressive salespeople pressured ordinary American home owners into taking home equity loans that gave the home owners enough money for a flat-screen TV and an SUV, with tiny payments for three years, and no mention by the salespersons of the tiny, little item concealed in the note: a balloon (including the deferred, high-interest payments accrued during the teaser period), a balloon the home owners could not possibly pay.

    Then these salespersons aggressively sold bonds based on the notes (and Lehman even bought some of these bonds--silly them).

    Net result: the home owners lost their homes to the gentry who engineered the loans. The bond buyers lost their entire investment. The sellers were guaranteed their bonuses by two presidents, one from each party, showing that, at the highest levels, both Democrats and Republicans agreed:

    There is no excuse for letting any property remain outside the hands of the gentry, and the turn of the 21st century has helped to correct the problem of wide-spread ownership of wealth. Wealth must be restricted to the gentry.

    And the elimination of homes, jobs, and savings should, we hope, finally solve the most painful and persistent problem of the 20th century: the servant problem.

    So, from the perspective of the decision makers who set up the crisis, I'd say, 'Complete success, opportunity successfully exploited!'

    I trust they are now quietly celebrating, while loudly saying they 'feel the pain' of the newly homeless, jobless, and desperate. Do they have champagne that doesn't make too loud a pop as it's opened?

  29. Elizabeth Warren came to the attention of many when she testified
    before the Senate considering measures to strengthen the personal
    bankruptcy laws on behalf of the banks and credit card companies.
    She pointed out the unhappy reality that fifty percent of personal bankruptcies were the result of medical expenses that overwhelmed a family's ability to repay them.

    When Paul Krugman quotes the late Edward Gramlich of the Federal Reserve “Why are the most risky loan products sold to the least sophisticated borrowers?” And he continued, “The question answers itself — the least sophisticated borrowers are probably duped into taking these products.”

    The Republicans when they govern assure the interests of the predators
    while the most vulnerable will find themselves the least protected.
    A reality the President should continue to point out to revive
    the debate that what we need is a government that cares about its
    citizens over the interests of greed. A government that protects its citizens over the rapaciousness of unregulated, unscrupulous, an unethical business practices. 

  30. Actually, an excellent case CAN be made that excessive government intervention brought on the debt crisis -- who but Congress, and on both sides of both aisles, pressured Fannie and Freddie to underwrite more and more, larger and larger mortgages, in an inane but politically self-interested move to provide more bread and circuses in the form of a house for every American, whether he can afford or not? Come on, Dr. Krugman, government's hands are all over the debt crisis of 2008-2009 (or 2008-infinity). This was what fueled the household debt problem: using rising equity in homes many couldn't afford to begin with as piggy banks, to be left after the crash with negative equity but still with the amassed debt, only now at usurious interest rates while the lenders borrow at the Fed's discount window for something so close to zero it's not worth the bother to quibble about the difference.

    Chris Dodd, Barney Frank and Nancy Pelosi were right there, along with all the usual suspects on the Republican side, pushing the NGOs as hard as anyone to make debt easier to amass. It was SUBSTANTIALLY government that led to all this.

    As to Ms. Warren, I have a simple belief: if you're going to have an agency charged with protecting consumers (or with doing anything else), then get the best person to frame its vision and run it. For the new consumer protection authority, that person appears to be Elizabeth Warren. The demonization of people by Congress, whether it's Robert Bork demonized outrageously by Ted Kennedy (and others), or Elizabeth Warren demonized by Republicans, sub-optimizes the potential of very good people and causes other good people to avoid public service. If we Republicans have a serious problem with an agency that protects consumers (such as the notion that it's one more boondoggle, expensive, executive accretion subject to political patronage and pressure in a world in which we cannot afford to repair our bridges or educate our young), then we should attack the idea on its merits (or lack thereof); we shouldn't be attacking Ms. Warren.

    If we can't kill the agency, then don't just have it sit there, bereft of a real vision and effective leadership. Ms. Warren and I probably don't see eye-to-eye on a lot of things ideological; but she's clearly the best choice for an agency that we may very well need to live with.

  31. Elizabeth Warren may turn out to be a great American heroine. She deserves our support and we should let our representatives know it.
    My take on the real estate boom and bust that got us into this mess is that it was a rigged game, no different than a street corner con game.
    In the over heated real estate market buyers were drawing the obvious conclusion that if they didn't buy in soon they would be shut out forever. Salaries weren't going up but home prices were sky rocketing. If you didn't buy a house you would wind up retiring in a cardboard box under a bridge somewhere.
    The market became so hot that every house that went on the market was essentially entering a frantic auction. But the game was rigged because the banks were offering to back all the bidders with unlimited cash. What kind of auction is that?
    The banks were required to make sure that the mortgages they granted did not exceed the value of the property. Since the accepted way of documenting the value was to compare it to like properties, all they had to do was ratchet the whole thing up incrementally for years and years.
    What they effectively did was transform a billion dollars worth of housing stock into a trillion dollars worth of housing stock with them holding the note.
    If it slumped back to 900 billion and then 50 billion defaulted, that still left them with a huge advantage. They transformed their equity from a billion to 750 billion.
    In the meantime they pandered to us unmercifully, begging us to take out more credit cards and play russian roulette with our bills. In the Middle Ages usury was completely taboo. When it finally became accepted it made the industrial revolution possible. But if you take it to it's final conclusion, like a game of monopoly, eventually there will only be one winner. So clearly we cannot allow it without regulation of some kind.
    Free markets do not exist. In a free market everyone has the same information and every transaction represents equal value to both sides. This is completely impossible without regulation.
    America, don't let anyone stop Elizabeth Warren if you know what's good for you.

  32. The White House is beholden to the banks and therefore will remain quiet on the matter. It is extremely frustrating to see all these opportunities for the President to explain his side to the public come and go without any action on his part. No wonder the Republicans can put their spin on everything and get away with it.

    Our government does not work any more: the first two years of an administration are spent trying to figure out how things work and how to govern, while the other party wins congressional elections. The third year is spent setting up the reelection machine and trying to figure out how to get reelected, so nothing is done to upset the big campaign contributors. The fourth year is spent running for reelection, so nothing gets done either.

    This time some legislation did get passed, but it was so watered down (for example the healthcare bill) that in the end the public did not even realize how it benefits them -- and the Republicans put such a negative spin on it that a large part of the public began to oppose it, without even knowing the facts.

    No one in the administration seems interested in "setting the record straight," and Elizabeth Warren will become another victim of this attitude.

  33. Sometimes by accepting the terms of debate one has already lost the argument. I believe that the right has somehow done just such a thing in discussions of regulation. We have allowed them to define regulation as any attempt by governing bodies to restrict behaviour associated with commerce. But regulation is also something else and as such it is absolutely essential to the proper and convenient conduct of commerce. What I refer to is its function in defining what objects of exchange are. In old regime France the central government defined a loaf of bread by the weight of flour it contained and of what type. The definition led to standardization of the notion of a loaf and meant that a loaf anywhere in France could be priced accordingly. It didn't restrict commerce; it freed it. The same can be said for the process in the early 19'th century by which banks were forbidden to issue thier own notes. Paper money of a precise definition and value was centrally issued and the result was a great liberation of commerce. If derivatives were to be somehow defined in such a way as to guarantee their nature by a central authority it would open up the possibility for confident trading in those instruments. How can anyone who wants to trade them object? In this sense we have to say that the financial community is being dragged kicking and screaming into the 19'th century from an even earlier era and that it is our friends on the right who have accepted the job, for a good fee of course, of doing the kicking and screaming.

    More seriously it is the failure to grasp the dual nature of regulation that leads to the ideological battles. How come they are not screaming about the role of the government in defining what constitutes gold of a certain number of karats?

  34. The monopoly finance capital controls the economy to the extent that no one can make a living without it. Its hegemony built on money manipulations and rents smashes everyone who begs for credit for survival but fails to pay exorbitant rate and to ask no questions prior to putting down his or her signature. Wall Street has reigned supreme in a country known otherwise as a country of, by and for the people. Now someone like Elizabeth Warren wants to right the wrong done to the people for a longtime by Wall Street, “bankers and the politicians who serve them,” the Republicans show their ugly faces of transgression against the people’s basic rights of finance service for people’s well-being and not for bankers’ filthy lucre.

    All capitals, moneyed or not, came from workers’ labor power – living or dead. Capitals expropriate workers’ surplus value that they demand workers to contribute whenever workers earn wages. They then convert the surplus value into profits. After deducting from profits the interest, rents, expenses, and capital’s own consumptions, capitalists accumulate the profits as newly born capital ready for investment in expanded reproduction. Money capital differs from real or industrial capital in terms of its indirect relationship to production – money capital comes from dead instead of living labor power hence it is called fictitious capital. Finance capital does not need to participate in production for accumulation of more finance capital, contrary to the real capital; it can accumulate capital by, for an example, participating in speculation, financial casinological manipulative instruments such as derivatives, credit default swap, commodity, and many others. All these kinds of work are non-productive and often harmful to the economy as otherwise productive investments are shifted from production to fictitious capital accumulation, resulting in financial assets bubbles – real estate industry and stock market, ill-allocated investments and financial instability.

    Private-profit driven finance capital has played havoc with people’s lives and monopoly private-profit driven finance capital will kill the system as we know it and sustenance of the world’s people.

    Regulations and reforms may mitigate temporarily the otherwise inextricable implosion of the monopoly finance capitalist system; the danger is that any temporary ease up of the general crisis will almost always lead to some false feeling of safety that will falter in our duty to deal once for all with the conflagration. Remember that as long as the monopoly finance capital in this late-stage capitalist era remains to be controlled and owned by the private hands, worldwide general economic debacles are unavoidable.

    “Last week, at a House hearing on financial institutions and consumer credit, Republicans lined up to grill and attack Elizabeth Warren, the law professor and bankruptcy expert who is in charge of setting up the new Consumer Financial Protection Bureau.”

    The monopoly finance capitalists and their politician and think tank lackeys are determined to maintain their hegemony over the people and to seek more power for consolidation as their collective gluttony has its way. A self-serving few is now engaging in class warfare with the disorganized working majority and taking great advantage of it. The majority must hold the monopoly finance capital’s feet to the fire by taking strolls on Wall Street as the Egyptian democratic revolutionaries would have done longtime ago.

    Eventually the monopoly finance capital must be nationalized if the majority wants to have a livable future.

  35. Elizabeth Warren is every good thing you said and more. For a very long time she has done the primary research to find out why two incomes don't pay for what one could easily afford a generation ago. Her findings fly in the face of the false claims of profiteers who want to blame their victims. They intend to keep the predator-prey relationship going until they have picked every available pocket and ramped up the debt until a nervous middle class barely can raise its collective head to identify who the serial thieves are.

    There are plenty of scoundrels and Elizabeth Warren with her wry wit and encyclopedic records is not afraid to call them out. As a bankruptcy specialist, she knew and described the tag team games played by health insurance companies and banks as they welcome in the wealthy and healthy while driving everyone else into the cold. Long ago she gave the data that showed medical bill bankruptcy was not only destroying our families, it is destroying the moral fiber of our country. Warren is not just a fact person, she has genius at putting pertinent facts together to expose the underhanded tricks that have ruined our economy.

    Of course the corporations and investors who have been making such a killing, and that is literally when it comes to the health care profiteers, want to silence Elizabeth Warren. She is on their "too effective" list, like ACORN, Bill Moyers, Michael Moore, Robert Reich, NPR, Rachel Maddow, and certainly you, Professor Krugman. Clarity and facts are a scary mixture for groups that want to keep millions of people ignorant about what is happening to our nation’s treasure. When they hear “winning the future” they intend to be the winners. They hope the rest of us will look around at a crumbling, outdated infrastructure and diminished education funding and agree that it is we who must tighten our belts.

    The facts Dr. Warren provides can wash away years of propaganda-induced ignorance. No, American capitalism does not make it possible for most of us to become as rich as Croesus. Quite the contrary. With reckless, feckless corporations sending our jobs overseas, undermining our pensions, ignoring the unemployed, holding onto the available capital, and stealing away tax money that is needed for school children, health care, and building a 21st century nation, the average American will be lucky to stay above water.

    The profiteers and their lobbyists probably have large offices dedicated to finding ways to get around Elizabeth Warren's scrutiny. They know the only way they can do that is to throw mud on the champion of the middle class, so their attacks are beginning. It is about time that reasonable people say, "Enough!" Bravo to you, Professor Krugman, to Dr. Warren, and to all the rest who are trying to hold off the deluge of rogues.

  36. If the White House fails to take a stand and back Ms. Warren it is only because they and the party they lead are also in the pockets Wall Street. This is where the Republicans get their courage: both parties stand in the same bread line, and that's not something the White House wants highlighted.

    By now it should come to no-one's suprise how far the Right will go to demonize anyone that stands in opposition to their agenda.

    This truly is a chance for our President to reassure the American public by reaffirming his pledge against predatory lending and corporate malfeasance. By setting an ethical standard that serves everyone's best interests no longer will the average consumer to be a victim of greed and arrogance.

    But with the recent fiasco in Wisconsin I'm afraid that once things get heated the Democrats and the White House will be more concerned with a strategy that keeps their noses clean and turns their cowardice into a forgotten news item so that they can continue to focus on 2011 (if they have any shred of credibility left by then).

    We are at war once agian protecting the rights of others in the regions where in the past we have propped up Tyrannical Dictators to serve the economic interets of the very corporations that we allegedly want to reign in. In the meantime the American worker continues to go without work, his children are uneducated and have no healthcare and his civil liberties subject to the current radicalism undermining our constitution. No one is standing up for him.

    I don't want to be a cynic but then I would have nothing to do but despair.

  37. The best thing that could happen is for the Republicans to keep power through 2016, including the White House. Am I a crazy, zealous, ill informed Tea Party member? I am not. However, since Republicans have been in power the middle class workers have started to become organized, union and non union, because Republicans in power, like Scott Walker have exposed their true agenda, unmitigated by people like Obama working out a limp compromise that is gives ordinary Americans minimal gains and gives Republicans most of what they want. I think it is great that workers are organizing in states like Wisconsin, Ohio, Florida and Minnesota because Republicans are forcing them to.

    All Obama does is stifle dissent, put a fresh coat of paint over a decaying house with a crumbling foundation and calls it a renovation.

    It is good that Republicans attack Warren. First, she can more than handle herself, unlike most Democrats who get the timid virus when confronted by Republicans. Second, it exposes the Republican greed, oligarchic, robber baron values undiluted by Obama like silk screen compromises and triangulated obfuscation of real issues.

    I think Warren is widely respected and cannot be demonized by Republicans. She has too much backbone and professional credibility.
    She really belongs in an administration of a true progressive president who will truly stand behind the kinds of things Dr. Warren would want to institute and not water them down or triangulate them away.

    Any mean spirited, nihilistic, greed based, overreaching statements and strategies that the Republicans say or do is in the long run good because because it wakes the public up to the reality of their allegiance to the "economic royalists" as FDR said and their contempt for ordinary Americans and anyone who is not rich.

    The reason that we have so many low information voters is that so called "liberal" Democratic leaders like Obama do not speak truth bluntly and directly to the public and take positions that would really cause a national debate. We have to stop blaming Fox News.

    The Republicans are liars but act as if truth is on their side. The Democrats, lead by Obama, have truth on their side, but act as if they have something to hide.

    They contribute as much as Fox News to the millions of ill informed voters we have in America. Because they are ignorant of the facts, they are ripe to be manipulated by playing to their emotions.

    Elizabeth Warren strikes me as a person of great integrity who wants to speak the truth. I don't see how she can ever be able to function adequately under a president like Obama who often can't decide which side he is on, is wedded to triangulation policies which in the end only strangulates the truth, and as a reault the public remains confused and ill informed. I am starting to think this is by design.

    The public needs to get sick of Republican ideology and governing policies. The only way this can happen is if they are in power long enough to cause so much harm to the masses unequivocally reject them.

    Martin Luther King and the civil right movement didn't come about because blacks were having a great time in America. The people of Egypt didn't kick out Mubarak because he was a good leader who was meeting their needs.

    For people like Elizabeth Warren to be successful, there has to be a true awareness on the part of the public of the need for her expertise. For this to happen, Republicans must be given a chance to fail, even more miserably that Bush. Obviously, eight years of Bush weren't enough for the public to wake up.

    Maybe if there was trials and convictions for the betrayal of lying us into the Iraq war, and the perpetrators of the financial meltdown were put on trial and people actually went to prison, there would be more public awareness and knowledge about what actually took place. Obama squashed all of this.

    I don't think Warren will be able to do much good as long as she has to work for a president who runs away from every domestic conflict and tries to shroud abysmal compromises as acts of wisdom.

    Maybe one day someone like Elizabeth Warren who actually has clear convictions, values and ideas will be president. For this to happen Republican policies must fail and fail badly in the eyes of the public.

    That, unfortunately, is how change happens.Obama admires Regan, but there is a great difference between them. Regan spoke the truth as he saw it and won the public over to his side. Obama runs from the truth. As a result, good and skilled people like Elizabeth Warren has to be disparaged by greed crazed Republicans.

  38. re: the GOP attacks on Warren

    Crooks hate cops. Especially capable, incorruptible cops.

    re: Obama's slide to the right

    You'd think that as obsessed as they are with Lib-er-uls, Republicans would try to find out what they actually say--not what Libaugh/Beck/O'Reilly/Hannity/Savage say they say--once in a while. I know quite a few Republicans, and many of them refer to President Obama as a Socialist as if it's common knowledge.

    Yet if you read the comments here, you see Liberal after Liberal after Liberal referring to him as, basically, a crypto-Republican. And that's the pattern across the blogosphere.

    And both sides make the unspoken assumption that the American president's job is that of a "monarch on a timer."

    But in fact it's a job with circumscribed powers, working with a Congress which, even if a majority is in his party, nothing can get through the Senate unless either the President compromises or he gets 61 Senators--the new Publican definition of "majority."

    Plus there's the fact that before President Obama ran for his first public office, government had been effectively captured by our corporate elite, through the privatization of campaign finance, sophisticated computer-driven no-holds-barred gerrymandering, the electoral college that enables one Montana Republican to outvote four California democrats, the winner-take-all system (as opposed to instant runoff) and other structural issues that all boil down to the fact the President Obama has to sail into the wind of a billion-dollar permanent propaganda campaign against him, 24x7x52.

    Now if FDR were in his shoes he could do more. I grant that. A periodic poll of American historians ranks him currently at #15 among all presidents (Reagan got #17; Bush II was 6th from the bottom). But that still places him in the top third of all presidents.

    And just imagine if McCain had gotten elected, had a stroke, and put the nation in the hands of Sarah Palin for four years.

    That's the real choice we were facing. No wonder Obama won, despite a majority of Republicans believing he's not a Christian and not even an American citizen.

    We could do better than Obama theoretically, but in reality our choice was stark. And even so the McCain-Palin ticket got, what, 47% of the vote?

    And I imagine the choice in 2012 will continue to be as stark, considering the GOP's leading contenders so far.

    Lastly, remember that we only see the tip of the presidential iceberg. What he does in private meetings in back rooms may count for even more than what he does in public.

    It's not fair to blame him for the hand he was dealt--only how he plays it.

    That said, I will be bitterly aggrieved if he doesn't stand behind Warren. And I hope the Republicans do defund her agency--and then some Chinese businessman-criminal floods the market with counterfeit drugs that poison people--that would have been caught save for the regulators being fired, effectively, by the Publicans.

    Of course they'll instantly launch a multimillion dollar propaganda campaign blaming it on Barney Frank and Nancy Pelosi somehow, because people who can't understand abstractions can be reached with character assassination.

    But you may not be able to fool an Electoral College majority of the people all the time.

    www.blogzu.blogspot.com

  39. When you say that people did not understand the obligations and risks they were placed under when they signed-up for cheap mortgages and that they need a consumer protection agency to hand-hold them through the process of dealing with any financial company, this is implies a slippery slope. Lets not forget that these same consumers were driven by their own greed - they levered-up so that they could keep buying more stuff they didn't need with money they didn't have. We don't need an agency to protect us from ourselves - we need common sense and we need to learn from our mistakes. While there is value to a consumer protection agency lets not overstate this value because companies can and always will find loopholes to maximize profit - that is capitalism at work and while it is far from a perfect system it beats a state-controlled society any day. I want to be part of America, not Europe or Canada - if I wanted to be European or Canadian I would move to these places. I like that I live in a country where the risk-reward paradigm is skewed in favor of enterprise and not distorted by safety nets. Of course there is always a happy middle ground and I am all for that - my only point is lets not get carried away.

  40. Ah, if only we could return to the halcyon days of yore, the pre-civil war days dominated by unregulated small businesses that could fail with minor impact on the overall economy, days when failed business owners and employees could easily find new opportunities and jobs, days which may or may not have ever existed. Isn’t it too bad that small businesses can’t build and operate a national railroad or a national communication system or an electrical power producer or a sheet steel producer or forger or a manufacturer of sophisticated and effective pharmaceuticals. Ach, for the days when one might travel no more than 10 miles from one’s birthplace in a lifetime, when one might never speak to a resident of another state, when there were no cars to replace nature’s horses, when most home owners could make their own candles, and when the major threats were small pox and tuberculosis.

    The Republicans and too many Democrats may actually believe in the unregulated market or they may merely be trying to conceal their own rapaciousness, but isn’t it too bad that their ideology has so little to do with present reality

  41. It never ceases to amaze me that the general population of poor and even up to middling classes profess what is now called the Republican Party. It is true that the Republican Party was the party of most of the Founding fathers, although it was was known by a different name. What is not commonly realized is that even then it was a party by the Rich for the Rich. At the time of the revolution George Washington was the wealthiest man in the 13 States. Even then, contrary to what is fictionalized now, they endorse, owned, imported slaves for free market. They determined that the right to vote was dependent upon ownship of land most of which they owned. The biggest regulations they had were those that enabled them to disenfranchise over half of the total population, regardless of race or income: women. I believe it was a founding father who in fact lamented the fact that children as young as 2 years old couldn't be put to work. Workers had no rights and that was a goal. During the 1800's it was the workers who actually took back America and brought more equality to more American citizens, slaves and new immigrants. Many died in the attempts to form a middle class, to offer opportunity to anyone with the motivation to climb out of tenements and one room shacks. Even back then it was the laws and acts passed by the same wealthy group known as Republicans today, that caused the depressions and recessions. Today, too many people believe the the propaganda of that party on which it has thrived for centuries now: "If you are rich it is because you deserve it and if you are poor it is also because you deserve it". Of course, that can be said several ways but that is it's base. Today, so many people are so eager to fall back on idealized founding fathers' ideology, when in fact it will turn America into just that again. Republicans today and since the Reagan Administration are busy turning back the clock. They are insuring the rich stay rich and the poor stay subservient. The majority of the middle class continues to fall further behind each year and has since Reagan. Without exception, every single time the Republicans are in the majority or there is a Republican president, the middle class becomes poorer and the national debt grows. Republicans are not for the independent business owner, they are for corporations of which they sit on the boards. They are not for the middle class who aspire to their wealthy backer ranks. The middle class is a thorn in their side, a burr under their saddles. They seek to eliminate the middle class so that they have a larger poor class to draw their workers from. The bad news is that they have found they can use the ill-educated middle class to do that for them. It is only a matter of time and America will once again will be a two party and two class country.

  42. How long will it be before they start asking about Ms. Warren's birth certificate, or question her stand on abortion, immigration, guns or any other issue not related to her job? That's the play book they've used to discredit, marginalize and demonize every potential opponent. The only question is how they will swift boat her into the footnotes of history. Since they can't use race or religion, they'll have to resort to treason or sex, is my guess. Of course none of this ever gets mentioned outright, it all goes through the subtle machinery they employ to raise these issues by slipping them under the back door, but somehow winds up in the forefront of the minds over which they hold sway. They've nearly perfected this strategy, and if it didn't make me so angry, I'd think it was sad.
    Ms. Warren will be burned at the stake. The talk radio Borg-zombies are already castigating her. The banksters are afraid of her because not only is she right, she's a girl! Makes me ashamed to be an older, white, gun owning independent. If we're going to have someone think for us because we can't think for ourselves, lets at least choose folks who are obviously on our side, who will not leave us with the aforementioned "chump change".
    This is a person who clearly enjoys ample sucess and a fair measure of wealth yet has not lost sight of the basic building blocks that enabled her. We, the very foundation of this country, owe it to her, and ourselves, to support her and those like her, before the wrecking crew finishes the job.

  43. The records of Democratic and Republican federal administrations on consumer protection couldn't be more starkly different, and not just on 'big' consumer products such as loans, but also on 'smaller' household goods like cars, or, closer to my heart, baby gear.

    The mid-price crib and stroller we purchased in 2007, and used daily or almost so with each of our two small children since then, were both recalled in 2010 for having deadly defects (the crib slats break, causing children to fall or be strangled; the stroller safety harness strangles).

    Further, children's and infant's Tylenol, Motrin and Benadryl were all recalled in 2009 and 2010 (along with many more adult medicines manufactured by the same parent company) because bottles contained materials other than medicine. Horrifyingly, we fed almost an entire bottle of infant Tylenol to our sick baby during a bout with the flu in early 2010, which was later recalled.

    More widely covered is the BPA fiasco. In our case, I specifically visited federal government websites in 2007 to see if I should stay away from BPA-containing products, an issue that was then just emerging in the US media. I learned then that the government was taking no action on these, so I bought and used BPA-bottles for at least a year to feed my son. Sure enough, BPA soon was removed from baby products, and later all food containers, in the US.

    The critical point, for me, is that the companies involved in these cases and others had at least some relevant information to direct a recall or alter their product, but did nothing until the government stepped in. Indeed, in the most astonishing cases, the company tried to secretly buy back defective product rather than recall it, presumably to avoid media coverage. (Johnson & Johnson has admitted doing so in Senate testimony, and Toyota has also recently been caught doing this, among others).

    So when it comes to the safety of my children, I want Democrats in federal consumer protection positions -- and especially a go-getter like Warren. You go girl!

  44. We are living in times which remind of the Manchurian Candidate.
    As long we have a president who is unwilling to truly "take off the gloves" and be willing to be as politically coercive as the current crop of toxic Republicans, we the people are at the mercy of interests who have no interest in us. There is no doubt in my mind that these "Republicans" are not really conservatives, but something else, and they are the greatest threat to this country since the Cold War.
    They attack the unions, without which, there would have been no middle class. They attack banking regulation without which there would have been another Great Depression. They attack a huge government deficit which they caused. They attack teachers and our educational institutions as being too expensive who have been the backbone of our ability to lead the world. They attack the learned and intelligent by calling them "elitist", and playing on the insecurities and envy of the public at large.
    Now they attack Elizabeth Warren, who by all accounts is guilty only of being honest and good at her job. What they wish to do, is to place an incompetent clutz in her position so that they can later justify the elimination of the Consumer Protection Agency on the grounds it is ineffective.
    It is easy to see the overall plan is to continue to empower corporate and banking interests while disempowering the Government and therefore the individual.
    That they have been able to convince so many that the Government, an institution who's power comes from us, the people, is the enemy, is truly remarkable. The irony is that they are to some degree correct, since so many of these un-american, unethical and imoral politicians have been elected to office.
    Here's the end game they seek.
    Our Government will be so weakened in it's ability to protect us against monied interests that the middle class will disappear. Business will then have a limitless supply of underpaid labor which will allow them to compete with third world industries. At this point it will be Corporations who will rule every aspect of our lives, but it will be the state governments who will enforce new labor laws allowing deadly force against strikers, just as they did at Ludlow.
    Our "Freedoms" and "Rights" will be gone. Once in such a system, exceptions to Consitutional protections may easily be passed as amendments.
    Just as Elizabeth Warren is being vilified and attacked by Republicans, the American Citizen too is being attacked. As was aptly pointed out in the article while it is clear that the current financial disaster is a consequence of insufficient regulation and unethical lending practices, Republicans are suddenly blaming regulation and borrowers instead of the banking institutions who caused this fiasco.
    Welcome to third world America.

  45. I have noticed that those whose irresponsible actions bring about regulations are the very ones who complain the most about them. Finance being but one example of this phenomenon. For instance, the same situation exists in manufacturing, in the mining industry, in the timber industry, in the fishing industry, in the oil industry etc.

    In each of these examples our pioneers had the freedom to do these things unfettered by regulations. In most of these examples the above industries caused great damage to the Earth and, or would have brought about the demise of their particular industry if left to their own devices. For instance, fishermen took every salmon which swam upstream in our many western rivers, ocean fishermen caught every fish they could, never thinking of the long term impact over fishing would cause. Similarly, loggers would have cut every Redwood and Douglas Fir so long as there was a dollar to be made. The oil and mining industry considered little the damage done to our lakes, rivers and oceans with their mindless struggle to extract oil and ores from the Earth. For instance, gold miners used cyanide to extract gold from the Earth making no effort to contain this poison, which in many cases ended up in our lakes, streams, rivers, and oceans.

    These type people are the very ones who squawk when it becomes evident to everyone but them that their actions are intolerable and regulations are necessary to check their devastation of the Earth and their neighbors.

    In the beginning they had the freedom to do these things and they did, but they also had the duty to do them in a responsible way, to regulate themselves, this they didn’t do. So, we, the people, did it for them - and they squawk.

    We Americans could have learned something from the American Indian concerning the Earth and our relation with it. The American Indians of several hundred years ago were people who, for the most part, had an idyllic life. The father would teach his sons survival techniques that had been passed down through the ages. Likewise, the mother would teach her daughters the ways of the women of the tribe. These people had a deep respect for the Earth and all that it provided. Their ways, practiced through the centuries, put no strain on their natural world and they could have inhabited the Earth indefinitely without coming to the situation that white man has, in but a few iniquitous centuries.

    When white men settled in America they looked at the bounty of the land very much differently than the Indian did. Whereas the Indians looked to the land for sustenance, beauty and as a vessel to navigate themselves through the ages, the Americans looked at every asset of the wilderness with one and only one thing in mind, money.

    And so it is in America’s financial world. Little thought is given to the long term effects of their insane policies, little consideration is given to their investors. In their minds, all is fair in their mindless struggle to accumulate as much money as possible in the shortest amount of time.

    Unfortunately, the above scenarios are but a natural consequence of capitalism. True capitalism requires little regulation, but is unsustainable due to man’s greed, hence regulations.

    Regulations are a necessary component of capitalism until such time as the character of America’s people rises to a level which renders them unnecessary. This condition might be a while coming.

  46. Besides the obvious merits, there is good political reason for the President to go to bat for Warren. Everyone knows he would not be president without a lopsided endorsement from women.

    Yet what has he done to recognize their support? So far, very little. He appointed Hillary Clinton as Secretary of State. But many women were and are as unimpressed with her as I am.

    Otherwise, the most powerful positions in his cabinet, without exception, went to men. They include the Summers-Geithner team that "rescued" us from the 2008 collapse at the cost of giving handsome rewards to the people who caused it, thereby reinforcing the lie that government did.

    We now have two extraordinary women in subordinate positions. One is Elizabeth Warren. The other is Susan Rice, our UN Ambassador. This newspaper recently credited her with getting the UN resolution on Libya in record time by, among other things, having a draft in her drawer long before being asked and pressing her negotiating advantage with relentlessly good timing.

    Of course men like me will also be watching what happens to these outstanding public servants. I hope and expect to see Rice's name on the list to replace Clinton when she leaves. But women will be watching with particular interest.

    If Obama doesn't go to bat for Warren and Rice, I'm afraid that women, like many other supporters, will lose their last shred of faith in him. I still admire the president, and I see no better alternative. So I hope that doesn't happen.

  47. The only people more incompetent than our elected officials are the CEOs of the big businesses.

    They truly believed America would be a better place if we exported the US jobs overseas. They truly believed the housing prices would rise forever in spite of millions of the Americans losing their jobs and stagnant wages. They truly believed the credit cards could substitute for the diminishing buying power of the regular folks. The truly believed the constant cutting of the wages and benefits of the working people wouldn’t stall our economy. They truly believed the chronic tax cuts and unpaid governmental bill would make our country stronger. They truly believe the most expensive health care in the world would make our economy more competitive in the global market.

    However, watching the TV over this weekend assured me that our business leaders are most overpaid individuals in the world. The endless stream of drug commercials is the sign those executives are completely detached from reality. They don’t understand the human beings. There is no need to waste more money on the stupid ads than on development of the new drugs. If a person is sick and has some health problems, he or she will use any and every possible avenue to find out the potential cure. If you type in your symptoms or your diagnosis, Goggle will lead you to a web site of any company offering a helpful drug so any commercials are an outrageous waste of money that inflates the cost of the products.

    It seems those CEO’s are demanding the enormous bonuses to match their gigantic incompetence.

    Any regulation that forces those CEOs to implement the common sense measures is in the best national interest.

  48. Conservative Texas Republican here. Please, Republicans, read Edmund Burke, thought to be the one of the founding fathers of modern conservative thinking. In his "Reflections on the Revolution in France," he warns, no, he polemicizes against ideology (Democrats also take note), while at the same time argues passionately concerning the need for experience grounded in particular circumstances. Yes, Professor Warren has occupied what some may call an "Ivory Tower" position. Even so, she has been for years looking after the welfare of consumers. Some may say that she is doing little more than protecting consumers from, and therefore enabling, their own greed and stupidity, and to some degree that may be true. However, as the recent economic crises have made clear, there is an enormous asymmetry of knowledge and information between those who hold the reins of power, financial and otherwise, and those who don't. I do not understand why so many Republicans in office fear a leveling of the playing field as something that will benefit the aggregate whole. Perhaps it is their own fear and stupidity that is standing in the way.

  49. The left has gotten clever in extracting wealth from the private economy and redistributing that wealth through domineering government control. I watch in amazement the new wealth transfer system that is being developed. Instead of taxing revenue directly from an agitated public, the left now uses secondary wealth transfer. In the case of the missing millions, the left is attempting to extort large sums of capital from the banking system and transfer that wealth to the irresponsible and greedy poor.

    The greedy poor not only buy a lot of lottery tickets, they also buy houses and cars they cannot afford. The left wishes to support their activities by having bankers fund the greedy irresponsible, and by construction poor. The left never mentions the next steps that follow. If the extortion is successful, you must ask where does that happy money going to come from? Oh, the responsible people that pays their mortgages on time and live in appropriately sized houses. The left won’t tell you that slaved institutions have to get that money from somewhere. And, unlike the government, the money comes from increases in prices. In this case it would be higher interest rates on responsible people.

    Again, the microeconomic mechanisms are conveniently omitted by our esteemed economists.

    The next step after funds transfers to easy money people will be to control the profitability of the economic institutions to - help - others. The crippled financial system that the left wants will lead to poor economic viability, further government intervention and finally collectivization. Also in the name of the good of the people.

    Eventually we will be a workers paradise, poor and proud, guided by beneficent masters. Like Cuba and Venezuela and North Korea. History has not been kind to irresponsible socialist policy. Indeed, the fire is burning brightly that is cleansing irresponsible government policy from the Earth.

    StanRoc!

  50. "If men define situations as real, they are real in their consequences." So goes the "Thomas theorem," formulated in 1928 by social psychologist W.I. Thomas.

    Question: Why is the financial gaming industry, aided and abetted by their lapdog lobbyists and Republican lackeys, continuing to define the situation for our country, especially after all the damage they did? It is truly ludicrous that the very people who drove this country into the ditch with their greedy money-grabbing scams are getting away with telling us the last thing America needs is financial regulation. It is also outrageous that they manage to seize the day by smearing and defiling wise people, such as Elizabeth Warren and Paul Krugman, who stand up to their nonsense and propose common sense solutions that even my grandkids can understand. And by the way, why have those feisty, populist Tea Partiers focused all their vitriol and rage on the government, yet they remain remarkably quiet about the misdeeds of the financial and market sector.

    The answer seems to be that there is no loud outcry from the so-called party of opposition, the Democrats, countering the bankers' well- orchestrated definition of the situation. Even our Democratic President is missing in action. What would Teddy Roosevelt and FDR say to today's bankers? Of course, we can't count on the corporate media anymore to pick up the rocks and see what crawls out--remember when "Dateline" and those other magazine shows used to do a little investigative reporting now and then, instead of their current tabloid fare of salacious love affairs and family murders! And by the way, let's get rid of NPR (by any means necessary), lest they raise a counterargument or two that puts a small dent in the financial industry's definition and agenda.

    Elizabeth Warren is one person--there are other individuals as well--who has made and is making a heroic attempt to right our sinking ship. Her definition of the situation is anything but "radical" or those other terms used by the smearers to "define" her. She is clear-headed and full of common sense. What better way to serve our country. A lot is at stake if we don't oppose and effectively redefine what the bankers, billionaires, and their operatives want us to believe.

  51. I neither object nor defend Ms Warren. Rather draw your attention to a regime, just like the last regime, which didn't bing "change we can believe in" but more war on liberty, war on humanity, war on truth.

    Typical of the psychology of interventionists, they are true to their nature. Misdirection towards scapegoats and away from themselves, themselves the true causes of the drain on society, on liberty, on the freedom to choose.

    Like the hold on their victims that cults have and abusers in controlling and abusive relationships, they never admit blame. For them it's always someone else. And like the previous administration that mastered the use of fear to sow the seeds of a type of Stockholm syndrome, the present administration like all before it uses the fear to stifle critical thinking. Ask yourself are you in a state of constant fear that a proverbial "they" are out to do you harm while the regime in power is here to save you?

    See if these conditions meet your emotional state:
    * The presence of a perceived threat to one’s physical or psychological survival and the belief that the abuser would carry out the threat.
    * The presence of a perceived small kindness from the abuser to the victim
    * Isolation from perspectives other than those of the abuser
    * The perceived inability to escape the situation

    Both sides of the so-called left and right use these, especially tools of the regime, i.e. the media propaganda, to manufacture consent.

    And so once the conditions are in place to foster cognitive dissonance,

  52. The only criticism I have of your excellent column, Professor Krugman, is your naive belief that President Obama will suddenly go into that famous phone booth, put on his dusty superman cape and come out fighting for Ms. Warren and the long suffering consumers she represents. Whenever a decent opportunity presents itself to be supported and encouraged, he is off making speeches to raise money for the upcoming presidential campaign or traveling to other nations to convince them of his good intentions and virtuous deeds to come.

    As has been stated many times by many of your colleagues, action for real change will only come from that dingy basement where many of our citizens have been kept captive and jobless and somewhat hopeless. But not any more for long, I hope.

    Whistleblowers, it is time to unite and form a union. Every act of corruption seems to be followed eventually by those who tell us they knew what was going on but were either ignored, told to shut up or fired. We need watchdogs within the halls of power who recognize that the highest contribution they can make as patriots, is to gather whatever information they can and make a stink about it. It will indeed take brave souls to upset the system but we need them desperately. And if you are jobless and have legitimate reason for complaint, please use the time and opportunity to speak out.

    Professor Krugman,we deeply appreciate your valuable and courageous analyses of what is simmering in the right wing stewpot, but I believe that an opposition call to arms (without guns) could be most timely.

  53. Dr. Krugman:
    From your article:
    "Few have as much credibility as Ms. Warren."
    ==
    You said that right.
    She is my personal heroine in the middle of this economic and political maelstrom.
    Combine the attitude of the corporate economic community on consumer rights, with the same forces opposing patients' rights in the health care debate and the onslaught of attacks on government employees in so many of the states -- all led by Republicans and it becomes clear:
    The attack on the middle class is intended to set up a 2-pronged citizenship status in this country.
    At the top, the corporations have legal rights under the Bill of Rights due to their legal personage and all who work to use those rights.
    In the second class, most Americans who work for a living and seek to have a comfortable life with some relevant goals related to raising families and working toward retirement.
    (If, by killing health care initiatives, they can see to it we die earlier, so much the better.)
    The third class, the underbelly, is comprised of all those who compete for jobs at the bottom of the ladder -- the under-educated and illegal immigrants.
    Thievery has become a way of life throughout the entire financial industry.
    And one lone soul is standing in their way, with a "Stop!" sign in her hand.
    God bless her.
    Thank you for calling attention to Ms. Warren and her hard work to rectify some of the erosion that has occurred thanks to our bought-out, picked-over Congress, together with useless bureaucrats imbedded into government agencies.
    We cheer her on.
    And she is fearless.

  54. The Republicans are acting as if they want a real depression. I guess some people with a lot of ready cash made some good buys in the depths of the last depression and maybe it could be done again? It is hard to understand the motivation driving this apparently destructive trend! It is certainly apparent that any person who accurately identified the dangers of deregulation over the past 10 years is deeply feared by the forces of greed. Elizabeth Warren deserves much better treatment then she has received and if President obama wishes to continue in his present position he needs to give her more support. A whole country is at stake!

  55. I saw a speech given by Ms Warren on CSPAN from San Francisco where she had no doubt that her efforts were going to underminded by he Banking and Credit Card industries. But, as she noted, just the fact that they were forced to spell out the different amount of interest paid by the different payments the consumer could choose. The consumer is finally able to see exactly what they would be paying for the use of credit. Ms Warren went on to add that every month since this law was so hesitantly imbraced by the Credit Card industry the amount of debt was reducing for the average household for every month since it was enacted ! I don't think any of us knew that if we paid $900 on $1000 worth of credit we were continuously charged on interest on the $1000 not the remaining balance of $100. It astounded me I had never seen or heard of this before Ms Warren came out in support of of this legislation to print it on our monthly billing which Banking Industry effectivly delayed the bill for nearly 3 years to enact. I support Ms Warren in her continued efforts at making things easier to understand when it comes to understanding consumer finance.

  56. Until corporations are barred from participating in the electoral process, Elizabeth Warren will continue to be a pinata for the anti-regulation forces in Congress. Corporations are nothing but profit-generating devices which have flourished because they insulate the owners from liability for their wrongdoing. As long as we allow such "sociopathic" entities to finance our government, we will get the government the sociopaths want. And President Obama is always looking for the middle ground instead of the high ground, so I think Professor Warren is going to be pretty much on her own in this fight. Formidable as she is, her mission is the enemy of the sociopaths and they are going to fight with every tool at their disposal to continue maximizing profits to the detriment of consumers.

  57. Professor:

    I really can't understand your willingness to ponder whether Obama may have the inclination to assign the financial industry any blame for the mess they made of the economy. Much less his willingness to attempt to reshape the debate in that way.

    Obama is clearly a willing accomplice in the denial which is generally promulgated that fincial transactions alone were not to blame for the economic downturn and that there is enough blame to go around, which is of course an absurd falsifying of the facts. Obama is willingly inept and is the main reason for allowing banks to go their merry way while he gives them a push they neither asked for, nor needed nor had any right to expect.

    In the future please lump Obama right along with the worst Republican facilitators in the exculpation of the financial industry from any wrongdoing or blame, as is clear by his actions not his vacuous words. In short Obama is big part of the problem not in any meaningful way part of the solution.

  58. I wouldn't hold my breath waiting for the Obama administration to take on the extremists of the Republican party who are attacking Warren, who are only protecting the interests of their Wall Street benefactors. If it happens, it would be the first time Obama welcomed a fight with red-meat Republicans.

    It's no surprise that Republicans have turned this into another attack on the messenger. Yet again, they can't win on the facts or arguments, so they revert to their usual strategy of trying to change the debate by engaging in a vicious personal attack. Both the American public and the media too often play into their hands by letting them define the debate this way, rather than calling them to task for their underhanded tactics. Apparently, the administration is cowed by Republican attacks, and don't trust that they can actually win an argument on its merits.

    Sadly, this change-the-debate strategy far too often works for the right-wing. From the deceitful renaming of the estate tax to the "death tax;" to Scott Walker's transforming his union busting into "giving tools to local governments to address budget deficits;" to the current slimy attacks on Warren, Republicans get away with it because those in the media not only allow their tricks to go unchallenged, but too often let Republicans put words in their mouths.

    When was the last time you heard a mainstream media interviewer challenge a Republican when they avoided a question and went on the attack? Has a member of the corporate media ever called the phrase "death tax" what it is, a right-wing lie?

    It's up to thinking progressives to raise their voices and call out these right-wing tactics for what they are: lies, obfuscations and mud-slinging. If we wait for the Obama administration or the mainstream media to do what's right, we might as well be waiting for Godot.

    www.TheIndependentProgresisve.com

  59. Elizabeth Warren is the kind of person I hoped Obama would appoint to other key positions regarding economic oversight and regulation. Instead we got a cadre of Goldman Sachs alums sure to disappoint the likes of me. All the more reason for us to be very vocal in support of Ms. Warren, who really does seem to have the best interests of average people at heart.

    As for whether this administration will engage in a debate with Republicans over financial reform, I'm not holding my breath. For starters, I would characterize this administration's record in this area as only slightly better than Republicans, which isn't a particularly strong place to be. And speaking of being strong, this administration doesn't have a strong record of standing up to Republicans on much of anything in recent months.

    It's becoming more clear to me all the time that not only do we need more people like Ms. Warren in charge of regulating the economy, we need a president who will fight for what's right.

  60. Right on Pr K,
    E Warren has done a tremendous job at making the core issue intelligible to the average Joe. It's a pity that her lecture @ Berkeley wasn't aired in loop during the financial crisis.
    http://www.youtube.com/watch?v=akVL7QY0S8A
    (spread it !!)
    When the consolidated debt repayments for American households is well above 50% of the total family income, there IS a problem when one of the spouse looses his or her job. If joblessness is widespread, then the whole banking system is nose-diving.

    That said, it is a mistake to believe that reason will prevail, or that Banks will be amenable to well thought-trough regulations. The will to power - in the philosophical sense - as contaminated all layers of corporate America. It's a trait that does not respond to reason, nor considers factual analysis. Its only goal is to expend its reach and power.

    Whatever limit is set will become matters of contention, and never dealt with based on reason. It's a struggle for power. Americans should unite against the monster, and if anything, what happened in Wisconsin is the perfect example of the challenges ahead of us. Wealthy individuals and corporations sitting on $2 trillions of cash, trimming costs on nurses and teachers earning $35000 a year.

    This is sick !

  61. Ken #21 asks, "How did these Republicans get back in power?" Good question. We live in a society where the only way to show displeasure at those who serve the corporations and the rich (democrats) is to vote for those who serve corporations and the rich, and who want to destroy the middle class (republicans). Every four years we can jump from the pot to the frying pan. Some Democracy.

    The fact is that corporations and the wealthy own both parties of government. We need a new party. A party which serves the interests of the majority of Americans. That is, a party which serves the 99% of Americans who didn't benefit from the last thirty years of tax breaks and deregulation.

    One of the saddest points made in the movie "Inside Job" is that we are the first generation in American history that is less well-off and less educated than the previous generation.

    Something needs to change. We need to learn again how to organize in unions. Nothing will change, as long as all we do is wait for the next election.

  62. For those of us in middle age, banking and business practices since the turn of this century are just shocking. Banks have profited off of hidden fees, usurious interest rates, and penalties engineered through "benefits" like overdraft or whatever other nonsense for more than a decade now. Banks need to get back to the business of lending to make their money, but keeping those loans on the their books so they actually have a stake in the outcome.

    Consumers must be educated so that they don't give these banks one unnecessary dime in fees. We need a strong advocate.

    We must defend Elizabeth Warren relentlessly. The Republicans lining up against her are revealing who they really are. We should also be wary of the Joe Biden-types coming from states where credit card companies are king and predatory lending is given a wink and a nod. I'm not willing to let the Democrats off the hook for not pushing for and achieving better banking reform. This is not so much partisan as it is one sector of our nation's economy (the financial sector) versus the rest of the American people.

  63. I was just thinking, why is it so many conservatives who hate government so much wish to be a part of it. It's a question I keep asking myself and cannot fathom an answer. Blame excessive government interference in banking and financial markets? Blame entitlement programs? I see a very clear picture emerging, it is one of one country with two distinct and seperate people, one group the intolorant, religious, self important type who believes the private sector will cure all ills. Then there is the other, where good clean government unfettered by monied influence would actually look after the population at large protecting them from unsavory businessmen and corporations who would pollute, destroy and abuse the enviornment for profit, treat people (employees like useless cattle going to slaughter), like dirt. But the problem is the bad guys have been winning so long with the likes of the Koch Brothers, Rupert Murdoch, Bill O'Reilly, Glenn Beck spewing lies and mistruths about everything from healthcare reform to immigration. If the truth sets one free, these people will live in an invisible prison for eternity. Truth seems to be an elusive trait these days, or should I say when people lie to themselves long enough they start to believe the lie themselves. Whatever the reason the gold or his shoes, the conservative stands there hating the who's, who he would say are just lazy, while we all know conservatives are just crazy. With power that is.

    Thomas McMahon
    Millis Ma

  64. It's not that Warren is one of the few who foresaw that massive consumer debt can exacerbate an economic downturn. Everyone who studied American history knows that the massive consumer debt load of the 1920s was a factor in deepening the Great Depression. But most policymakers refuse the acknowledge such lessons from history because it would interfere the desire of the financial and corporate sector to make the most money at any given moment no matter whether the method might have adverse future consequences. Carpe diem and hope for a miracle or government bailout!

  65. This so called attack on Warren is actually an attack on the new agency, so Ms Warren shouldn't take it personally. The supposed Consumer Protection Agency was named by Liberal bureaucrats is really an attempt to wield more power over the banks and control capitalism-as they would like to do with all aspects of our lives from eating to heating our homes.

    There would be no need for such an agency if A) there was no government bailout nor insurance for banks/institutions that made poor choices and B) if the individual applicant was held accountable for his signature of a contract C) real financial education was taught at the high school level in lieu of tolerance week or home economics. Apologies to my old home ec teacher, but my dad's omlette was better.

  66. It's getting harder and harder to see the difference between the government and the Wall Street bankers anyway. No one can expect to win office without humbly acknowledging their power and control. Anyone who opposes their attempts to further impoverish the middle class is demonized. Go ask a Republican who the economic enemy is and they'll point to school teachers and unions or the folks that collected unemployment benefits when the economy collapsed! And anyone who dares say so is branded as "anti-business". I'm starting to think that we'd be better off if the government would just go away, that is, provided, if they took the privileged, scamming bankers with them. To understand the mentality of these petty profiteers one need only look to the endless stream of new fees and charges they're dreaming up to extract billions more from middle class they ruined. They have no problem taking money for nothing and the government has no problem letting them do it while Republicans do all they can to help them out and going after Warren goes with the job.

  67. All this became easy for the GOP to sell due to a long history of rewriting history. Those on the right never accepted the idea that their policies of accumulating debt in good times helped lead to and prolong the Great Depression. And they've long viewed FDR as one step short of the anti-Christ. Maybe only half-a-step. They put cause on the world at large and blamed FDR's spending for extending the depression. And they called history taught any other way part of the liberal agenda.

    This was being done when I was in college in the sixties. These were the Goldwater Republicans. They often were angry and generally disdainful of those who disagreed with them. And they came out of the '64 election with the belief their nation had been hijacked and it was no holds barred in taking it back.

    These are the conservatives who came up with the concept of starving the beast - crippling our government with debt. Win or lose, they damage the nation. This isn't a concern. The prize, they believed, would be worth it: Market based capitalism and a United States government too weak to hinder its operations.

    Now, they believe, they can sell this idea that Democrats can't control spending. It's an idea that belies the history of the past thirty years, Clinton being the only president who contracted government and balanced the budget. But they are not wasting a crisis. In fact, they're doing things that will delay recovery and possibly reverse it.

    Taxes remain low on the wealthy. The GOP goes after political kills. And they fight any move to control the way the rich play with money.

  68. Mr. Krugman, with your closing comment, you are assuming a reality that does not exist. Unless your hope is to challenge the Obama administration - in which case, good freakin' luck.

    But it is very clear to everyone who is paying attention that if the Obama administration tries to focus on who is really in the pocket of Wall Street, his party and especially his administration will be front and center. When it comes to doing the bidding of Wall Street, both parties are fighting like dogs to show how much they want to see profits grow. Wall Street likes the anti-regulatory 2nd-grade rhetoric of the Republicans, so they get some support. Wall Street likes the fact that Geithner and others are behind the scenes in Washington making sure that any regulations that do get passed still allow Wall Street to basically do as it pleases. And Wall Street and corporate interests in general LOVE the fact that both parties are committed to socialism for the rich, couched in free-market rhetoric - where the taxpayer assumes the risks and the costs, and business takes all the profit. That's the system we've had since at least the mid-1800s, and neither party is trying to stop it now.

    My point? It's a good column, but it would be better with a more honest ending. Maybe try communicating directly to those of us paying the costs of this unsustainable, murderous system, and supporting our efforts to build new ways of living, new economies based on community and justice. That would be more beneficial than trying to get Wall Street and its Government to do the right thing. Trust me, they will never do the right thing.

  69. The Republican party is wrong to attack regulation as the cause of our economic problems. This country does not need less government, it needs more effective government. It needs a government that represents the electorate, not key donors. Most people I know (Republicans and Democrats, Liberals and Conservatives) want at least one person, if not many people, to go to jail for what happened in 2008. They want a regulated financial sector, they want good drugs, reasonable health care, and excellent schools, but they want it done properly. Unfortunately, our federal government no longer represents what the people want and instead do deals with the pharmaceutical and insurance companies to get a watered down health care bill, or deals with Goldman Sachs and their ilk to get financial reform, etc... If government gave the people what they wanted and stopped listening to the cowards on wall street, this country would be great again, and heads would finally roll.

  70. Paul,
    You have a great following in this column. Are we really limited to 5 or 600 intelligent people? I am concerned about the liberal voice, period. We lost Keith Olbermann, Frank Rich and gave MSNBC s complete overhaul, and now the Times? I get so upset when I hear Friedman talk of sharing the pain, agreeing that we should put entitlements on the table. The people who got us in this mess still have their jobs and bonuses in the millions/billions - could you explain to me what kind of pain they are in? They should be in a cold concrete cell - What kind of people would slash education, freeze SS for 3 yrs and now 5 more (promised by Obama) give more power to the corporations when they already own the country, take subsidies away from old people for heating bills, cut help for single mothers and the poor - homeless? These people are favoring the business/uber wealthy so they keep their jobs. The power of the rich/corporations in this country are all that's left of us, we are toast. And we're shooting at Quadaffi?

    You and Herbert and Rachel and Ed are the only existing voices for what was once a democracy. Even at that, MSNBC has toned down their liberal voice, their format so as not to offend the Republicans. We live in a one party oligarchy.

    I voted for Obama because I thought he was intelligent and he understood what was wrong with this country. And because I believed he was a good man with his heart in the right place. He nailed the issues on the campaign trail so I know he's not stupid or ignorant of the facts. Libya is not our business - Wisconsin is our business. The Democrats should be as good at standing up for the people of the United States as they are for the people of Libya or Egypt or whoever. Civil rights in this country are a thing of the past and so is any social network or government for the people.

    I'll say this. It took a lot of "audacity" for Obama to give a nation "hope", and then turn around and join the Republicans in keeping the poor, elderly and young people oppressed. I realize since JFK that the GOP will find a way to break the knee caps of anyone who dares go against them and their corporate monsters. Corporate masters/monsters think nothing of hiring hit men to take down the least among us. What a nightmare!

  71. "...conservatives hailed the debt boom of the Bush years as a triumph of free-market finance... right up to the moment it turned into a disastrous bust...Almost instantly, that free-market boom was retroactively reinterpreted; it became a disaster brought on by, you guessed it, excessive government intervention..."

    Instead of rejecting the argument, we should take it and see where it take us.
    If individuals are rational, they should have realized that "excessive regulation" would lead to a crash and act accordingly by not falling into the trap. The Ricardian equivalence -the proposition that increased spending by government financed with debt will be paired by decreased individual consumption because consumers realize that excessive spending today means increased taxation tomorrow to pay for today's debts- is based on this very same principle.
    The fact that unsophisticated and sophisticated agents fell into the trap proves the failure of their rationality and the need for regulation. Case closed.

  72. I've seen Elizabeth Warren on Dan Rather's HDNET show and have liked what she said on those shows. I still don't believe that we need another government agency to look out for we the citizens. We had a system in place that worked for many decades and I see all of our problems now as the failure of a single link in the chain. The broken link seems to be the rating agencies who rated the mortgage bonds as being sound investments when they obviously knew they were not. I will have no confidence in our financial system until we have investigated and prosecuted people responsible for that broken link. Elizabeth Warren comes across as a sincere person who wants to help people so I don't understand why she isn't pushing for fixing this broken link.

  73. With impeccable credentials of an expert on financial matters buttressed by her law expertise,MS Elizabeth Warren, as the chief of the Consumers Financial Protection Bureau, seems well within her brief, even if considered against the US federal provisions when, in her proactive consultations with the state Attorneys General she does succeed at evolving some common ground on grievance settlement with the mortgage servicing agencies, and thereby works out some ameliorative scheme by way of loan restructuring and a review of the foreclosures, mostly in the nature of bank usury and lacking legal sanction, to help redress grievances of the millions of the so called home loan defaulters, and thus coming to the side of suffering consumers, with, of course, unearthing many a financial irregularities and frauds committed by the financial institutions, that had resulted into a first rate financial crisis for the US. The shrill Republican opposition to all this can't conceal the real motives.

  74. If only President Obama had… If only The Democrats would… If only the Republicans would end the hypocrisy and be honest with the American people… If only Elizabeth Warren were allowed to run the FCPA… If Democrats and Republicans do not seriously address Healthcare and Medicare now…

    Paul, what has fundamentally changed for Ordinary Americans and inside Government since the collapse?

    Jobs for the unemployed? Tackling home foreclosures? A more equitable distribution of payroll between Executives and employees? Financial and corporate interests wielding gobs of money to receptive elected officials on behalf of corporations? Holding corporations and government employees accountable to the fullest extent of the law?

    Other than the Great Depression and the election of FDR in 1932, fundamental change in government and its relationship to Ordinary American and away from moneyed interests has never emanated from entrenched power on top.

    Paul, you must know the time has past pleading for tweaks of government policy and appealing to the nobler instincts of politicians.

    Either Ordinary Americans accept corrupt government as handmaidens to Corporations and moneyed interests or they organize, protest, march, demand Unions, occupy buildings, disrupt civil authority with civil disobedience to restore democracy to its rightful sovereigns, to root out corruption in government and abolish government solely for the benefit of wealth and privilege.

    When will the marquee darlings of the liberals (Mr. Krugman?) begin a steady chorus of exhorting Ordinary Americans to take action?

  75. After watching "Inside Job" this weekend, I'm more convinced than ever that the US needs a sharply progressive income tax on very high levels of income. Quit focusing on $250,000 as the cut-off: the rate need to start increasing after $1,000,000 and reach a level well over 50% on income above $5,000,0000, maybe as high as 90% on income above $10,000,000. Let's face it, income above that level is typically a result of either luck or excessive risk-taking (which is what got us into the financial crisis). Such tax rates might not have a huge effect on total tax revenues raised, but that wouldn't be the point. The intent would be to remove the skewed compensation incentives that exist in the financial industry today.

  76. Dr. K, I have to second some of the comments above. We know that the Republicans are firmly in the pockets of those who believe in short-term financial results and never consider long-term ramifications. The true adults in the financial conversation are those who reject all forms of irrational exuberance and see finance as a necessary but not dominant aspect of the capitalist ideal, an ideal in which products are created and services are rendered and value is not conjured as if from a cotton candy machine. It's time to turn your sights on Obama and the remarkably disappointing hires he's made, and to argue that in America these days Adam Smith's Invisible Hand should not be wearing Lloyd Blankfein's wristwatch.

  77. Students of neoliberal plunder of developing economies have known all about debt for decades as an instrument first of enslavement, then of destruction, as we watched the IMF and the International Monetary Fund implement the Washington Consensus, saddling whole populations with crushing debt so that giant loans went straight into the accounts of multinational corporations.

    Debt from the capitalist perspective is the gift that keeps on giving: money for nothing, the perfect way to get paid for not doing anything. It was only a matter of time before debt ran amuck within the borders of "the homeland." And destroyed this economy as it has every other where it has been employed ruthlessly to plunder, as opposed to investing for the good of all.

  78. It's a phony argument to blame the Republicans for the attack on the Consumer Protection Agency. Obama's Chief of Staff (Daley) is against it and Obama will sit quietly by as the destruction goes forward...he wants those campaign contributions. It is also unfair to blame the Republicans for re-deregulating Wall Street. Obama was not for regulation and only reluctantly signed on after the losses in Virginia, New Jersey and Massachusetts. His partner in crime, Geithner, is right now shooting holes in the regulation bill after selling out Freddy and Fannie to his banker friends.

    The Democrats are breaking down FDR's policies as only a Republican could dream about doing. Clinton deregulated Wall Street and eliminated Glass Steagall. He pushed through the oil company mergers that have created this nightmare. Obama has sold out Fannie and Freddy. And from Clinton on the Democratic party has pushed for such immigration that they have created tent cities, driven wages so low that more people are below the poverty level and employment is through the roof. Obama is currently talking about eliminating agricultural subsidies which were designed to insure that Americans had a ready supply of food at low cost...our supermarkets were the wonder of the world. He is also planning with Geithner and Sperling to cut Social Security as soon as he has cover.

    These are the new Democrats, the losing regressives. Before Clinton the Democrats held Congress for 40 years. Since Clinton and the new Democrats have been pushing policies to take us back before FDR control of Congress goes back and forth as people get disgusted with one party and then the other because neither is concerned with anyone who doesn't give them noney. The American citizens will be the big losers when Obama cowardly hides as Ms. Warren is attacked.

  79. As a soon-to-be college grad facing a financial world dominated by diffuse corporate greed and, as Dr. Krugman pointed out in his March 17th column, increasing ignorance, it is unfortunate to see the extent of intentional shortsightedness in American politics today.

    Growing up, I lived in a small town in the midwest, a place dominated by polarized views and sparse intellect. Ostracized for my health conditions' impact on the school environment (I have life-threatening food allergies), I was tormented and berated upon any sign of success. The scene, while bathed in the lights on Capitol Hill, is no different here - Ms. Warren is fighting for what is just and sensible, and those surrounding her are strongly opposed because they can't see past their own special interests.

    However, it is important to note that while Republicans are the culprits of the attacks here, President Obama did nothing but re-shuffle the deck of anti-regulation economist cards in Washington power positions. The exposé film "Inside Job" did an outstanding job outlining the reasons behind the necessity of the Consumer Financial Protection Bureau; here, we see the consequences of failing to relinquish power from these hard-headed, political bullies.

    I survived my small town thanks to a relentlessly good-hearted mother and a minority populous that had the vision to see the truth - which is why it was so striking to read Paul's comment that "Nothing could be worse...than to [be] protected by someone who knows what she’s doing and has the personal credibility to stand up to pressure." From the youth of America who know what they're talking about...rock on, Elizabeth Warren. People who value integrity will have your back - now and in the future.

  80. Remember, government these days is not an enterprise run "for the people, by the people." It is run by corporations and their well-heeled lobbyists, for the corporations, in order to maintain maximum profitability in an era of extreme competition between the various corporations. Government has very little to do with social responsibility when you take this fact into consideration. While the corporations pour billions of dollars into the various machinations of government, and since the Republicans seem to be where the action is taking place now, Warren and those advocating social responsibilities and reforms will be spinning their wheels while the newly-empowered Republicans compete for and curry favor with competing corporate interests. And speaking of empowerment, the elections of 2010 empowered the corporatists beyond their wildest dreams. The American voters spoke loudly, for the corporations and against reforms. I like Elizabeth Warren, but since this is NCAA tourney time, I'd compare her to a 5'4' guard trying to stop a 6'10' center under the basket. It ain't a gonna happen!

  81. The Obama administration should welcome the attacks on Warren as an opportunity to change the nature of public discourse ONLY if the administration has such an interest. But the Obama administration believes that the biggest problem the US faces is the lack of civility when progressives debate neo-liberals, ultra-capitalists, and other right-wing Republicans. Obama doesn't want to debate, he wants to acquiesce and compromise in order to solve what he perceives is the greater problem of a lack of civility. And he is so focused on compromising with the far right that he is unable to understand that changing the nature of public discourse is the best way of restoring honesty and integrity to our public debates of political issues. The debate today is about how to reduce the deficit, how to reduce regulation, and how to free corporations to make the largest possible profits so that -- according to the self-serving ideology of the bankers and neo-liberal captains of the financial sector -- we can reap all of the positive benefits of so-called free-market capitalism. If we change the underlying assumptions of political debate we might actually sharpen the differences between progressives and liberals and between neo-liberals, ultra-capitalists and neo-Conservatives.*

    *How have we arrived at a point in our public political discourse when neo-liberal and neo-Conservative are practically synonyms?

  82. At Sunday brunch, some friends who are not normally very political were complaining about how the deck now seems stacked against ordinary people to an unprecedented degree. Being of an age, we were especially disturbed by the attacks on Social Security coming at a time when many of our contemporaries have suffered age discrimination on the job market or are struggling to keep their businesses afloat--and the national treasury is being drained by our government's bipartisan compulsion to intervene in the Middle East.

    Elizabeth Warren is one of the few Obama appointees who isn't a corporate-controlled yuppie Democrat or an outright conservative. No wonder the Republicans hate her.

    She's exactly what we need.

  83. "What we have here is a failure to communicate." Prophetic words from Cool Hand Luke and that is what we have happening here in my opinion. The republicans are practicing double speak and information re-interpretation so that they can get there banking and financial industry pimps back on the block running their girls and making big money.

    The sad part is that we will be repeating this same thing again only the next time we won't get off so easy and we won't have the chinese credit card to fall back on. This is how dictators come to power and how nations are destroyed. In the end after the revolution and the bloodletting and the loss of liberty and freedom the innocent, the poor, and the dispossessed will be the real losers because the rich bankers and the wall St. elite will be ensconced in their villas in Switzerland and Uruguay while we, the people, have to clean up their mess and put it all back together.

  84. Well struck! You write of the idea that the "Republicans are back to denouncing the evils of regulation." This chapter of the Republican Manifesto has never really gone away, has it; whether it pertain to the financial/banking system, environmental safeguards, or commercial subsidies for the big companies. Yes, politically, things changed hands in a massive way in 2010, yet, many "winners" won by only the slimmest of margins (e.g., Governor Scott in Florida), and many of these with not a majority of the voters. This is a mandate? This is democratic governance? This rewriting of history, and legislating away scientific findings while we are at it, is bound to fail in the long run. In the short run it could also be disastrous to our economy, our environment, and unemployed/small businesses/shrinking middle class.

  85. Will Obama use the Warren hearings to do anything? Not likely. He is a puzzle, but I have been reading about the Civil War and there may be a parallel.

    Until U.S.Grant, the Union Generals saw problems not opportunities, and despite overwhelming military force did nothing to force the Rebels to quit. Maybe Obama also sees only problems, where most of us see opportunity.

    In any case, whether he is timid, has sold out to the banks, or is misguided as in the Civil War analogy, he won't do anything.

    To see how it works in Washington, go to YouTube and watch aoeBankerslobby and aoeBanksong, and maybe aoeHealth6 and aoeGenesis7.

    To cut these problems down, we need public financing of congressional elections. That would reduce the influence of the banks and other sources of bribes ('lobbying'). After all, we own the airwaves, and voters deserve to see the good, the bad and the ugly candidates - live and free. Just like in every other advanced country.

    Term limits would help too. Then politicians could only be rented for a while; buying one for life would be more difficult. That was the Founders' idea for the House too.

    Anyone got a better suggestion? I would love to hear from you!

    bill at www.realamerica.webs.com

  86. As a consumer, I can only wish the best for Elizabeth Warren. I am sick and tired of Republicans blocking the regulation of everything from loans to food products. They claim we need less government. I would agree if I wanted to break the law, but since I don't, I want the government and people like Ms. Warren to regulate the country so we consumers don't get ripped off on a daily basis. Ms. Warren does seem to be trying to protect consumers. No wonder the big business types are after her! The thought of a government employee protecting consumers, no doubt sticks in the craw of Republicans, but it makes me very happy.

    Go Elizabeth Warren. You are badly needed by consumers!

  87. Since the GOP has failed even to learn the lessons of 1929, let alone the Reagan follies, I doubt it will find wisdom in the reason of Elizabeth Warren.

    Adding in the mystifying enervation of the Glass–Steagall Act of 1932 by President Clinton, it is clear that consumers can't rely on either party to defy the forces which fund the re-election commercials.

    We are staring at the economic abyss and the abyss stares back at us.

  88. "The interesting question now is whether the Obama administration will see the war on Elizabeth Warren for what it is: a second chance to change public perceptions."

    Mr. Krugman:

    Will Obama man-up and defend/promote Ms. Warren, or will he show the Republicans what a reasonable guy he is and throw her to the wolves? If recent history is any indicator I'd put my money on his languidly acquiescing to Option #2, accompanied by a speech given with full conviction explaining how, in the long run, his choice is good for We the People. As always, I hope he will find it in himself to be strong and decisive, but those attributes thus far seem to elude him.

    SBE

  89. Mr. Obama is not the game changer many expected, to this day, I am still trying to understand his brand of pragmatism. Honestly, I do not care anymore. I am just hoping that he will not be the only Democratic candidate for next Presidential Election, one thing I know for sure, my vote will never go to a corporation crazy, anti social investment, anti social justice, anti minority, anti working class republican, but I feel much like I felt in the final President Bush years, I really can not wait for Mr. Obama to finish all what he could not stand up, all what he knew not to say, and thank him for what he tried to do and did in a really unsatisfactory measure. He should name and support Ms. Warren, but will him, I guess he knows better than those of us who voted for him, not because we were sure that he would succeed, but because it was the right thing for the America we love and work.

  90. I do agree that there needs to be some strict oversight of banks, and wall street. I don't agree with the constant revisionist histories pushed by both Democrats and Republicans. I am so tired especially of Democrats, they and their liberal supporters have yet to admit their own role in the financial collapse. I have heard several Republicans admit that the deregulation was a contributing factor to the melt down at least. Why wont the Democrats admit that government intrusion into lending practices were as well? I am sorry but by "recommending" banks lend to people who should never have been given loans to allow the poor to own homes was just as responsible. Both parties are responsible, and both parties should shoulder the blame. It is good that Ms. Warren has started to organize an oversight agency, and I hope it has the teeth to bring to account those executives personally responsible.

  91. Is the subtext of the Obama regime too little, too late?
    Without the perception of leadership, 2012 will be a repeat of 2004 for the Democrats. Only the spectre of a betrayal of the middle class followed by complete economic collapse briefly changed the political course in 2006 and 2008. The U.S. electorate is becoming numb to the after-effects of these events, and appears ready to tolerate the presence of both a permanent economic underclass and a politically-protected corporate oligarchy. Piggy-back phenomenon with court-packing by the forces of social reaction if Republicans (in thrall to the Tea Party) take back the White House and Senate, and we wipe out much of the progress of the last 80 years. Sad.

  92. It’s funny, I remember first hearing Ms. Warren (when she was still at Penn?) giving a presentation at a National Conference of Bankruptcy Judges meeting, almost 20 years ago, concerning her initial findings on how unpaid medical bills were the driving force behind personal bankruptcies in the U.S. Research that was later cited repeatedly by backers of the Affordable Care Act.

    So when she shifted her research focus to "predatory lending" a few years later, it's a good bet that a number of people found her attention particularly unwelcome. Nor did they any take comfort in her role as Chief Counsel to the National Bankruptcy Review Commission and its final report "BANKRUPTCY: THE NEXT TWENTY YEARS," http://govinfo.library.unt.edu... even if by the time it was finalized in October, 1997, the GOP had taken control of Congress in the time since the Commission was formed, whereupon the Commission's Report was pronounced "dead on arrival."

    So yes, if there's a forge somewhere at Fox News that casts GOP sound bites - and we know there is - it's a good bet that they've been working on her file for sometime now. And if only this administration had to interest (let's not kid ourselves by putting it in terms of "fortitude") to submit her name in nomination, to be followed by - at best - an ugly confirmation hearing, a successful filibuster and a recess appointment.

    Then too,, at the time of her appointment as Assistant to the President, last October, so that she could run the Bureau of Consumer Financial Protection on a facto basis, the point was made that "If Ms. Warren’s nomination were in limbo for months, she would be generally precluded from serving fully as the public face of the bureau, or even testifying before Congress." http://www.nytimes.com...

    Then too, the moment of Director is confirmed, there's any essentially independent agency up and running, answerable only to the Federal Reserve. In the meantime, it's under the control of the administration, through the Secretary of the Treasury. In the absence of a reliable super-majority in the Senate, and a candidate for Director who reflected the views of the President, heart and sole, what incentive is there to submit a nominee?

    So for any number of reasons, I agree that her nomination for the post of Director, with a 5-year term, is not going to be forthcoming. But neither, do I think it likely that she would leave the field of battle - say sometime in 2011- to pursue a run for Senate in 2012. Not while she sees herself in a position to make a difference

  93. A lot of comments to this column focus on what the administration should or should not be doing about regulating financial institutions and complaining about the power big banks have over our political leaders. This is fine - but we can also do something to help. If we see corruption and predatory practices at our local bank - but we do not bother to move our account out of that bank - then frankly we are part of the problem.

    I have noticed half a dozen new credit unions and small banks appear on my high st in the last two years - the alternatives are out there. And I for one, have never been happier to take advantage of that and move my accounts from Bank of America to a friendly credit union.

  94. I have never come across a bunch of people so negative and so despicable in their behavior as the republicans.

    A few days ago republican senators were trying to roll back the energy efficiency standards by rambling and ranting on about not able to buy 100W light bulbs of this were to go ahead.

    Now they are mounting a concerted attack on Elizabeth Warren. The financial crisis started in the early 2000's while GWB and his republicans cohorts were in control. It was precisely their hands-off approach that led to the slide. Yet, they blame it on too much government control.

    During the cold war period, the Soviet Foreign Minister Andrei Gromyko opposed anything United States proposed. His standard answer was "nyet", thus earning the nickname "grim Grom". Now the republicans are the modern day grim Groms.

    Paul Krugman was wrong; the bankers that brought us the financial meltdown have not faded from view. They are working hard behind the scene goading on the republicans to attack professor Warren.

    They are nothing but a bunch of merchants of fear and schoolyard bullies.

  95. What's the surprise?

    Elizabeth Warren cares about people outside of the top 5% of earners. In her life, she has seen how poverty can devastate, and financial trickery can ruin individuals and families, breaking the spirit we need to keep going.

    And she is an clear and honest advocate for everyday Americans, you know, the ones that go to work and play by the rules, and still get stuck by deals designed to trap them.

    That is the threat - that the predatory lenders, and their ilk won't be able to pry on consumers any more... and that would cut into the profit margin, ill-gained as it has been.

    Elizabeth Warren is one of the few bright spots in Washington these days - that's why mud is thrown.

  96. Having watched he Obama administration over the past two years, I suspect that it will turn its collective back on Ms. Warren as the Conservatives in Congress rattle their swords against "excessive" government regulation.

    This administration has shown little backbone for a fight on principles, and has been willing to compromise most any position. What was their position on the Wisconsin collective bargainng issue? Did they back the teacher's union? How did the public option in the health care bill disappear so quickly behind a closed door?

    I hope that Warren has success in her work. She is one of the Aministration's best picks for reform. I have little hope that her handlers in the White House will actually stand up and help her make change.

    They seem to sincerely fear the likes of Rush Limbaugh, Sean Hannity, Foxnews, Glenn Beck, and the rest of the right wing, reactionary press and pundits. I am tired of their cowering, and would like to see a little more honest, progressive, liberal voice coming out of their megaphone.

  97. If the Congress ever chooses to represent and fiscally protect the common citizen from fiscal abuse, then there has to be both changes in laws and a Consumer Protection Agency. It is increasingly evident that the Congress, especially the Republicans and the Tea Party are pro fiscal usury and pro limiting any effort to protect consumers from fiscal abuse. That fact should make people choose different leaders, otherwise they deserve the people that they elect. Criminal and civil laws must be put in place stop fiscal usury.

  98. Elizabeth Warren has done valuable work for the American consumer. We need to have a watchdog agency to protect us from the financial industry as a whole. I don't really see much of a difference between the two parties. The financial crisis is co-owned by the Democrats and the Republicans. It is utterly amazing that Dodd and Frank could be so judgemental when they benefitted from low interest loans from Countrywide. If are government wasn't thoroughly corrupt then maybe we would have seen at least one prosecution considering the liar loans, financial alchemy by the rating agencies and repo transactions at Lehman.

  99. I agree with comment #3 that President Obama is likely to take advantage of the attacks to outline who and what caused the meltdown in 2008. He worked hard to be elected, but he stopped fighting once in office.

    It was undoing the regulations from the 1930s that created the conditions for the 2008 meltdown. The notion of the "free market" regulating itself is like asking the fox to guard the hen house. It's another fallacy along with consumers benefiting from "free trade" when so many jobs have been outsourced overseas that consumers no longer have the jobs (and income) that allow them to put money back into the economy.

  100. Politics is all the CPA is about. Unless Mrs. Warren is going to personally check any statement I sign I am still liable for the conduct of my contracts. If I am warned that a certain derivative is risky and I buy it than laissez faire wins. If I lose my house because I over bought that's also my fault. But if the bank loans are encased with snares and I am also liable for the tax to repay them that is where the regulations fail.

  101. For better or worse Ms. Warren is a lawyer. She has never run a company, never met a payroll, never worked for a bank, never worked for a financial institution, and never had real world experience. She will view matters before her from the perspective of being a lawyer and not of someone from the perspective of the world of finance nor for that matter from the perspective of that of the average consumer. This raises the question that needs to be asked and answered. Can lawyers make rules that work in the real world or will lawyers make rules that reflect lawyers mentality and fail in the real world?

  102. The fact that politicians from our major parties lie is not new. It seems that the evolution of our democratic system has required that we sort out the truthtellers from the liars. What is new is a major party having its own TV network that can repeat the lies ad nauseum without repercussions. We use to have (pre-Reagan) a fairness doctrine that at least insured that Murdoch Faux News would have to air the rebuttal to the latest pack of lies.
    The reps realize we get our information from TV - that less and less of us read a newspaper and that the Goebbels maxim of tell a lie enough times and people will believe it,
    The democrats have apparently given up their role as the loyal opposition, so we the people have nowhere to turn.
    The problem with the Elizabeth Warren story is that the vast majority of Americans have no idea who she is - so, the teapublicans can define her as they wish - and they will.
    I fear for my grandchildren.

  103. This column is exactly right. Elizabeth Warren has been speaking truth to power (Wall Street) for many years now. She should be appointed to guard the interests of the working class and poor even if this has to be a recess appointment. Unfortunately the people who own and operate this government and who are robbing the poor and middle classes, fear her and will mount a mighty campaign against her. The banking,insurance, investment cabal must be regulated by someone who is smart enough to keep a step ahead of them and ethical enough to avoid being purchased. That person is Elizabeth Warren. And yes the bought reveal themselves by their opposition to her.

  104. I don't believe that Elizabeth Warren cares at all about my interests. She just wants to attack the banks because she's a left wing ideologue. Consumers were one of axis of dishonesty of the mortgage downturn. The other major player were the dishonest mortgage brokers working with consumers to get the man's money. The last leg were the money center banks, but they were mainly enablers and not dishonest at the other two.

  105. That is exactly what we need. Another Harvard professor trying to actually run something.

    There are 172,000 pages of federal regulations and they still couldn't much of anything about the banking crisis which was a mortgage crisis that was started by the government and then aided and abetted by the banks. There are 172,000 pages of federal regulations and yet Bernie Madoff skated by with a financial statement prepared by a CPA working out of a 200 sf office in Rockland County.

    There are too many regulations. What happens when you have such a situation is that nothing really gets enforced. How can it? No one can keep up with the sheer volume of federal regulations. What we need is a complete bottom up review of regulations to determine exactly how they have failed and then to re-write only that which we really need and to make that effective.

  106. The whole situation could be simplified if each lender were required to hold their own debt, and if "derivatives" were outlawed. Why not do that?

    Also, people should be allowed to keep their homes, if the homes are of modest size, and one automobile, again if the automobile is not too expensive, when and if they have to declare bankruptcy. The lender should be required to work out terms of the mortgage which are workable for the person declaring bankruptcy.

  107. The Republicans' behavior opposing regulation and consumer protections, to prevent bubbles and bust, is reckless for the U.S. economy as a whole and nearly all Americans. But the few with big money can rack up huge short-term profits in the present environment. When the bust occurs they walk away with their gains and everyone else pays the consequences. It's no wonder there is a fierce determination to maintain the status quo.

    The Democrats will not fight to change anything because they are after the same corporate campaign contributions as the Republicans. Only the rhetoric differs in order to get votes.

  108. Dr Warren's many sensible proposals get the support of over 90% of the American public in many polls, support that cuts across party lines and gets both socialist and libertarian support. That's a political mandate if I've ever seen one.

    So when neither major political party wants her to have any real power, the only logical conclusion is that both major political parties represent the <10% that benefit from the way things currently are. And then many political reporters have the audacity to wonder why people don't feel they're being represented in Washington.

  109. Corporatists who reflexively give false arguments that deregulation is harmful should be reminded that today, Canada has one of the strongest economy's in the world. Its banking system is highly regulated and did not suffer from the same excesses as the American banking system did. Canadians did not suffer from a major foreclosure crisis and Canada is now considered a place where investors can more safely put their money.

  110. Elizabeth Warren is smart, knowledgeable, energetic, determined, cares about ordinary people - i.e. most of us, tireless. That's why the "financial industry" and their toadies on the take in the government, both parties I'm sorry to say, don't like her. She's doing her job. She's doing her job well.

    Obama ought to support her within an inch of his life. The question is is he after money for the 2012 campaign or is he after votes?

    Trouble is the big boys don't like able women. They wouldn't let Brooksley Born do her job at the CTFC. If they'd had the sense to listen to her the financial crisis would have been avoided or would have been less severe. Here's what she said to Alan Greenspan in a hearing of the Congressional Financial Crisis Inquiry Commission last April. "...the Fed utterly failed to prevent the financial crisis.
    The Fed and the banking regulators failed to prevent the housing bubble. They failed....etc etc etc."
    http://www.wealthdaily.com...

    They don't want Elizabeth Warren to come in and show them up some more.

    We should be writing to our senators and representatives to support Warren. And thanks to Paul Krugman for doing his part.

  111. I am an unabashed supporter of Elizabeth Warren. She's extremely smart & tough which is why Wall St. and Republican legislators fear her in any executive level regulatory capacity. My absolute favorite Liz Warren quote? “My first choice is a strong consumer agency. My second choice is no agency at all and plenty of blood and teeth left on the floor.”

  112. You are absolutely right. The nomination of Elizabeth Warren is an opportunity, not a time for more Democratic timidity. The President could not ask for a more qualified, more courageous, more ethical, more just candidate; one capable of withstanding the vitriolic attacks of her opponents; giving as good as she gets. It is fair to ask if the President's reticence to engage those who attack her is rooted in a reluctance to stand-up for principle when the going gets tough and requires more than rhetoric. Her commitment is admirable. Thus far his is not evident. I hope he understands how discouraging his tepid support, for this worthy candidate, is for those of us who continue to support and believe in him.

    Phil Corsello
    Denver, CO.

  113. One of the greatest failures of the Obama Presidency---perhaps its greatest---has been its inability to counter the Republican assault on common sense. Every day, the Republican propaganda machine grinds out bigger and bigger lies: "Obama care" is a nefarious communist plot (it is actually a Republican plan to rescue the private insurance industry). The financial crisis was caused by overregulation (the SEC, the FDIC and every other agency were actually completely asleep and ineffectual). If Obama turns out to be a one-term President it will be because he conceded the power to shape the agenda to his mortal enemies.

  114. Sounds like Ms. Warren would make an excellent Fed Chairperson replacing Bernanke, and certainly would have been hugely better than Greenspan.

    As for the the efforts of Republicans and the bankers to keep her from protecting consumers because she actually knows something, actually there are probably a lot of others who also know something about the system and corruption. The real difference is that Ms. Warren is totally honest, and the others are crooks, thieves and liars. Lets hope that Obama stands up to these Republican and bankers. Obama is supposed to be the honest sheriff in town, and its time for him to put on his badge (lets not use any gun metaphors lest they misinterpret it) and stop the crooks and liars before they rob the country again.

  115. I more and more no longer see Republicans as a legitimate political party. By that, I mean to say, that I see them as a collection of corporate lobbyist who were able to get elected.

    Corporate America is basically "purchasing" our political system for themselves and the Citizens United case is allowing them to do so even more rapidly. Neither party any longer represents we the people. The Repubs don't want to and the Dems don't know how to. Perhaps, more important than the power to vote, in the 21st century, the power of where you chose to spend your money will be paramount. If corporate America wants to get involved in politics than I want to know which candidate and party a company is supporting before I chose to shop there.

  116. "...it would force opponents of financial regulation to rethink their position."

    Ah - inside these words lay the assumption that these opponents actually have a position. I would disagree. What appears to be their position is merely a tool for the task of herding public opinion. Their job is to make sure that every hearing or public forum has its share of the Monumentally Irrational that is the equivalent of electric cattle prods or brush fires. Gotta get them citizens to the Right Side of the voting booth! No brag, just fact.

  117. Well, I guess there must be about a couple hundred million+ Americans, that have not received the campaign contributions from the financial industry that these few hundred titans of democracy in Congress have received. Perhaps these titans of democracy should be tested for either dementia or just plain greed and conflict of interest, as to why the recession occurred in the first place, and further as to what would have happened had they not used our taxpayer monies to prevent a depression from occurring, since the financial industry was too big to fail!

  118. It would be nice if Elizabeth Warren had been sent to war with the proper weapons and support. She wasn't and it's an unfair fight. The probelm is, the Obama administration can't use the war on her as a second opportunity to highlight exactly who's really in Wall Street's pocket these days because they would be shining a spotlight on themselves, top to bottom. Their benefactors and former employers wouldn't like it very much, either, and the titans of Wall Street are already complaining about unfair treatment.
    Elizabeth Warren has been thrown to the wolves with no coherent, administration-approved narrative to back her up. Let's all just wish her strength and hopes she speaks her mind without reservation.

  119. President Obama should nominate Elizabeth Warren to head the new consumer protection agency. The Republicans will surely oppose her nomination during the senate confirmation hearings. This would provide an opportunity for the American people to see what the true intentions of the GOP are when it comes to consumer protections.

  120. The White House has made it abundantly clear that they want to 'repair their relationship' with Wall Street (remarkably, they've deliberately put themselves in this one-down position!). They have been bending over backwards to kiss up to Wall Street, have fallen prey to the intimidating public talk from the likes of Jamie Dimon, and have at all turns acted luke warm about and unsupportive of Elizabeth Warren. Obama's behavior around these issues has been gutless, beyond disappointing, and frankly, reprehensible. The Republicans are even worse, but I expect far more from our President. I expect nothing from the Republican House of Liars, Fools, and Clowns.

  121. "These days high levels of debt are widely seen as a major barrier to recovery"

    Solution? Widespread bankruptcy. The banks got the bailouts, from the tax payers, therefor they should bare the burden when taxpayers can't cover the debt that the banks also had a hand in making when the extended the credit in the first place. Also, had they not brought about the collapse of the economy, most folks would still be able to cover their debt obligations.

    The banks have unclean hands, therefore, the more people to declare bankruptcy the better,...and on many levels. One of those levels being justice being served.

  122. Sad to say, I have come to think of the Republican politicians in Washington as, simply put, evil. Their party has become the party of "me first." Examine the positions which they take, and almost invariably these positions promote and protect only the wealthy, at the expense common sense and the long-term well being of this country. And it is so obvious! When will those in the middle class who support these Republicans wake up?

  123. I wish we had some reason to believe the White House will take your advice.

    I know the president doesn't buy the reasoning that his words and stance can move and teach the public. He's said it outright in one of his speeches. He doesn't see his job as defining the right position. I'm frustrated beyond words at this behavior. It must be motivated from an almost purely political mind, a mind that believes political points and standing, reading the polls and responding, is the correct way to lead a country. It is mind boggling.

    But even worse is the fact that Obama didn't seem to even want Warren involved in the first place, and he doesn't seem to mind if his administration doesn't support her. It is truly mind boggling, and no good Democrat should accept this kind of behavior. They should demand better and be prepared to back it up with a primary challenge.

    Obama clearly never understood what the vote electing him indicated that people wanted, and he never really had any idea what the proper role of government was in fixing the financial disaster.

  124. At a distance I cannot escape the impression that it was a democratic president by the name of Obama who supported the banks at all times. Given the fact that Obama can't be blamed for the economic recession caused by the housing bubble, he can and should be blamed for not doing anything to stop the foreclosures and take action against Wall Street. He didn't do that.

    Whatever Ms. Warren is doing to protect the American homeowners from the banking vultures is great but it is ultimatley the President who is to be blamed for not taking a legal initiative to protect the American homeowners. Ms. Warren can't do it by herself and certainly it has nothing to do with the GOP.

  125. The single most important thing one should realize is that America is based upon only one governing principle: Free Contract.

    In such a society only one thing matters: bargaining power. Everything that goes on around us is all about people or individuals trying to enhance their bargaining power, whether its personal grooming, advertising on T.V. or politics in Washington D.C.

    The second thing to realize that, because all profit is made at the margins, slight changes in bargaining power can have enormously huge swings in the distribution of wealth.

    The third most important thing to realize is that the Republican party is interested in the pursuit of only one thing: The ever greater concentration of power and wealth on behalf of the wealthy and powerful.

    This means the republican party will attack anything that with vengence that threatens to shift, even slightly, the bargaining power of the wealthy. They attacked ACORN because ACORN sought help the poor take advantage of the limited bargaining power available to them. They attack unions because unions help working and middle class people accrue bargaining power. They are attacking Elizabeth Warren because she is an agent acting to help the poor and middle classes enhance their bargaining power.