Fear Factor: What's Keeping the President From Picking the Best Person to Protect Consumers?

On Monday, White House spokesman Robert Gibbs lauded Elizabeth Warren as "a terrific candidate" to lead the new Consumer Financial Protection Bureau: "I don't think any criticism in any way by anybody would disqualify her."

So why isn't the White House rushing to nominate her for the position? In a word: fear.

The same fear-based approach that caused the administration to throw Shirley Sherrod under the bus before her name had even been uttered on Fox News is once again rearing its head in the decision-making process over Warren.

This time, it's not the ire of Glenn Beck that has Team Obama's backbone turning to mush -- it's the fear of angering the bankers by appointing a consumer advocate who might actually advocate for consumers (the same consumers who, in their role as taxpayers, have spent hundreds of billions bailing the bankers out).

According to the National Journal, the banking industry "privately grumbles that Warren would be their least favorite candidate to head the agency." Or, as Floyd Norris put it in the New York Times, "whether or not she is named to run the bureau may depend on how willing the president is to anger the banks."

Warren is far and away the best person for the position. Picking her is a no-brainer. For many high-level positions, such as a Supreme Court justice, a president will often say he's looking for the "best candidate" when, in fact, there isn't one "best candidate." But this is that rare occasion when there truly is a single best candidate. When it comes to heading the Consumer Bureau, there is Elizabeth Warren -- and there is everybody else.

Not only is she one of the country's foremost experts on bankruptcy law and the multiple ways in which banks trick and trap consumers, she's been the leading advocate for the creation of the agency, which the banking industry worked night and day to kill. In fact, it was Warren who came up with the idea for the agency in the first place, in a paper she wrote in 2007. Her entire career has been devoted to the issues the agency is being created to address.

So obvious is the choice of Warren as the inaugural head of the Consumer Bureau that nearly a dozen senators and over 60 members of the House have already publicly come out in her favor. And over 200,000 people -- i.e. consumers -- have signed a petition urging her nomination.

Here are a few examples of the support she's getting:
  • Sen. Al Franken: "In my consideration, I think Elizabeth would be the best."
  • Rep. Barney Frank (chair of the House committee that drafted the financial reform bill): "She's far and away the best candidate."
  • Sen. Bernie Sanders: "No one in our nation could do a better job."
  • Rep. Rosa DeLauro: "In my living room with many members of congress, she predicted what was going to happen several years ago. As she put it in 2007, consumers cannot buy a toaster that has a one in five chance of bursting into flames but they can enter into a mortgage that has the same one in five chance of putting them out onto the street...Professor Warren we cannot, Ma'am, do it without you."
  • Sen. Jeff Merkley: "I support Elizabeth Warren...She has both the clarity of the need for an agency that has as its top mission protecting citizens against tricks, traps and scams, and she has the ability to articulate that vision. She has the leadership skills and the knowledge of the financial world. She has the full set of requirements to be an effective leader."
  • Sen. Tom Udall: "Should [the president] decide to nominate her to lead the Bureau, it will be a clear sign that the Bureau will be a champion for the American consumer, will stand up to unscrupulous actors and will not shrink from...fulfilling its mission under pressure."

Then there was this argument in her favor:

She is an enormously effective advocate for reform. Probably the most effective advocate for consumer protection in the country. She has huge credibility and she played a decisive role in helping make the public case for reform and she was early on this, way ahead of everybody else.

That, as it happens, was Treasury Secretary Tim Geithner, speaking Sunday on ABC's This Week. So why has Geithner stopped short of endorsing Warren (and, indeed, privately argued against her)? And why, as HuffPost's Jason Linkins put it, is the White House still "hesitating, looking for all the world like it is going to veer away from tapping Warren for the sort of job she was born to do?"

Fear. You know what they say: give a man some fear, and you make him fearful for a day -- teach a man to scare himself, and you make him fearful for life. The administration has taken the lesson to heart.

And the courage-killing virus isn't confined just to one end of Pennsylvania Avenue. Sen. Chris Dodd told NPR's Diane Rehm, "The question is, 'is she confirmable?' And there's a serious question about it." And today he challenged Robert Gibbs' assertion that Warren is "very confirmable": "How does he know that?" Dodd said to TPM.

Nothing fortifies your opponents like signaling your willingness to surrender. A different approach would be to do the right thing, welcome the fight, and make your case to the American people. "Are the Republicans, when we bring her name up, going to argue that she shouldn't be confirmed because she's too tough on the big banks and too tough on the financial industry?" asked Sen. Tom Harkin. "Boy, that'll get them a lot of votes in November!"

And if Senate Democrats don't have the stomach for the fight, there is a provision in the financial reform bill the president signed into law last week that allows the Treasury Secretary to name someone to head the Consumer Bureau until the Senate confirms a presidential nominee. And there is no clear deadline on how long the Secretary's appointee may serve. "The statute gives the Treasury Secretary the obligation to get it done, but doesn't tell him how to get it done," says Gail Hillebrand of the Consumers Union. "Consumers have been waiting a long time. The sooner we can get it off the ground the better."

So the administration has no excuses left for not nominating Warren -- including the threat of a Republican filibuster.

And given that her opponents, shameless though they are, can't just come out and say, "We're against her just because we're doing the banks' biding," what argument can they make? One currently being test-marketed is that because Warren is such a zealous advocate for consumers she would somehow be bad for "innovation." You know, the kind of innovation that brought us credit default swaps, teaser rates, 600 percent payday loan rates, and that led to widespread foreclosures and bankruptcies. This line of reasoning is akin to saying that we don't want our police force to be very vigilant, lest it diminish criminal innovation. Warren herself addressed this ludicrous claim in a paper in 2008:

Thanks to effective regulation, innovation in the market for physical products has led to greater safety and more consumer-friendly features. By comparison, innovation in financial products has produced incomprehensible terms and sharp practices that have left families at the mercy of those who write the contracts.

Which, of course, is exactly why the Consumer Financial Protection Bureau was created in the first place. If someone with Warren's skill set and perspective isn't named to head it, why even bother creating it? Just so another banking industry shill has a place to cool his heels before adding a few zeros to his salary when he quits and joins the companies he was ostensibly regulating? Given that this is the usual M.O. of how regulatory agencies in Washington work, it's all the more important to name Warren so she can start the Consumer Bureau off on the right foot -- as a true voice for the people.

So which way will Obama go? If he makes his decision on the merits, Elizabeth Warren will be the first head of the Consumer Bureau. If he makes his decision out of fear, she won't be. For guidance, he should listen carefully to these words:

All too often -- our government made decisions based upon fear rather than foresight, and all too often trimmed facts and evidence to fit ideological predispositions. Instead of strategically applying our power and our principles, we too often set those principles aside as luxuries that we could no longer afford. And in this season of fear, too many of us -- Democrats and Republicans; politicians, journalists and citizens -- fell silent... if we continue to make decisions from within a climate of fear, we will make more mistakes.

That was Barack Obama in May of last year, talking about the Bush administration's approach to national security in the wake of 9/11. As he finds himself in a different kind of "season of fear," will he use his insights as a guide to his decision?

Appointing Elizabeth Warren will demonstrate that the detour his administration took to Feartown with Shirley Sherrod was a lesson learned.

P.S. Check out this post by HuffPost's Social News editor Adam Clark Estes, to learn all about our new pairing with Meetup that, as Adam puts it, aims "to turn the conversations about the news on our site into face-to-face encounters."

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