The Rise of Elizabeth Warren

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As the months passed, it became increasingly clear that Elizabeth Warren would never pass through a Senate nomination process. Her polarizing testimony in front on Congress, coupled with her “hero status” among liberals and the President all but assured that she would never be able to head the agency she spent so many years of her life working for.

Warren was brought on to the Obama Administration in a position that did not require confirmation, her main goal being to get a fledgling new agency, the Consumer Financial Protection Bureau, up and running.

Progressives knew that Warren would never be confirmed through a staunchly conservative Senate, a Senate that does not even recognize the existence of the Consumer Financial Protection Bureau. According to Politico,

When Obama authorized Warren to get the bureau up and running a year ago, “I asked Elizabeth to find the best possible choice to lead the bureau,” he said in a brief Rose Garden statement, flanked by Warren, Cordray and Treasury Secretary Timothy Geithner. “And that’s what we’ve found in Richard Cordray.”

So, just three days before the CFPB is set to open its doors, President Obama nominated Richard Corday to head the agency. The president said Cordray, currently serving as the CFPB’s director of enforcement, has been a staunch consumer advocate in Ohio, helping to step up enforcement of the state’s consumer fraud laws and identifying what eventually became the national mortgage foreclosure crisis. “He took this job, which meant being away from his wife and 12-year-old twins in Ohio, because he believed so deeply in the mission of the bureau,” Obama said.

Despite his solidly liberal status, and his work as the director of enforcement at the CFPB, liberals saw the nomination as a major let-down: It had championed Warren — a plain-spoken Harvard Law professor and a folk hero to the left — to head the bureau that she had built up from nothing.

Who is Elizabeth Warren?

Supporters of Warren will often tout her as a 62-year-old Grandmother from Oklahoma. This is technically true, but it’s also what many might call “posturing.” Warren is a Harvard professor and one of the country’s foremost experts on bankruptcy law. Over the past four years, Warren has stoked an intense, largely partisan debate over the government’s role in protecting its citizens from overly zealous lenders, banks, and financial institutions. While doing this, she also strategically positioned herself to oversee the new federal agency that she dreamed of creating in hopes of rewriting the rules of lending. Businessweek provides perhaps the best analogy, saying that

“Warren is a grandma from Oklahoma the same way Ralph Nader is a pensioner with a thing about cars.”

She has also become an extremely polarizing figure in the political arena. Warren has a way of always putting herself smack dab in the middle of polarizing arguments. She has testified in front of Congress more than half a dozen times (her testimony always riddled with sarcastic retorts to overly aggressive questions with congressman) and has come to be revered by progressives and despised by conservatives.

Warren has often said that she had a precise moment of clarity in which she realized that changing the way the banks lend was going to require a new federal bureaucracy – and that it was solely on her shoulder to build support, create, and establish the rules with which it worked. That agency became known as the Consumer Financial Protection Bureau, or CFPB, and it was finally created as a part of the Dodd-Frank financial reform bill that passed in the wake of the 2008 financial crisis.

What is the CFPB?

According to the organization’s website,

The Bureau of Consumer Financial Protection (CFPB) is a new federal regulator created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (PL 111-203) that President Obama signed into law on July 21st, 2010. It is an independent Bureau housed in the Federal Reserve (the Fed) that will be charged with regulating consumer financial products. In large part, the authorities granted to existing federal regulators to regulate consumer financial products will be transferred (although not necessarily consolidated) to the CFPB.

Essentially, Warren argues that the agency is created to be a watchdog against banks and other financial institutions that have regularly promoted predatory lending in the past. Warren has long said that predatory lending was the main cause of the economic crisis in 2008 (in fact, it is what caused the housing crisis). So, Warren wanted to create an agency that had the power to reign in those types of overly greedy bankers. Republicans have argued that this type of "burdensome" regulation would put a strain on small businesses and kill thousands of jobs in the process. You be the judge on that one.

Google Images: Progressives are lining up to "draft" Elizabeth Warren to run against Scott Brown in 2012. 

Analysis: Warren For Senate? 

While Warren has been leading the fledgling CFPB, a number of political commentators have insinuated that Warren herself knew that she had very little chance of being nominated to head the agency. Thus, many have speculated that Warren has been exploring option B, which would be to run against Senator Scott Brown in her home state of Massachusetts (she is being urged to run by a number of high-profile Democratic officials).

The prospect of a Warren run terrifies Republicans, who have, at least in public, carefully attempted to tone down their cushy relationship with Wall Street in a calculated move to reassure independents that Republicans are working for Middle America. But Warren has taken to calling out Republicans every chance she gets, saying that they are figureheads controlled by powerful Wall Street billionaires. Robert Kuttner at the American Prospect explains,

Warren has been a particular bete noir for the right, because she has been so effective in reminding the public that Republicans, despite their posturing, are shills for the financial industry that caused the collapse. For this, she gets termed in news coverage as a “polarizer.” Presumably, anybody who wants to rein in the excesses that caused the collapse and cost consumers trillions of dollars is a polarizer. Score one for the right’s capture of media language. 

In Massachusetts, the Democratic field right now is stunningly weak, and Warren is the one candidate who can galvanize voters and take back the seat formerly held by Ted Kennedy. The two most visible contenders in the race, Seti Warren, mayor of suburban Newton, and Alan Khazei, a good-government reformer associated with City Year, who finished a distant third in the Democratic primary pack last time. Neither would stand a prayer against Scott Brown.

Warren also has the political strategy on her side. A large group of wealthy progressives have held back from endorsing anyone thus far in the campaign. Many have said that they are waiting to see if Warren will declare; if she does, it seems extremely like that she would have their strong support. Even more important, a number of the state’s most experienced and strong campaign operatives have not yet committed to any campaign, and in all likelihood would back Warren. Warren definitely has the resources on her side – she is sure to raise hundreds of thousands of dollars from donors all across America (her cult status among progressives will help with fundraising and name recognition) and a number of top political strategists have held out waiting for her.

Warren is also the only viable candidate at this point to beat Scott Brown. Brown, surprisingly popular in a state that was once home to the original progressive icon, Ted Kennedy, has become an extremely powerful member of the Senate, being courted by both the left and the right on decisive and key legislation. But Democrats think that, with the right candidate, they have a really positive chance to beat him in 2012. 

While many liberals are extremely excited about the prospects of Warren running for elected office, progressives need to be realistic in their assessment: Warren has not decided to run yet, and while many signs point towards go, if Warren decides not to run, this could spell disaster for Democrats in Massachusetts from the very start. Hear me out: The Senate seat in Massachusetts, a seat that Democrats believe that they have fairly good prospects of winning, is vital to Democrats maintaining and possibly extending their slim advantage in the Senate. With key political strategists watching from the sidelines, if Warren does not run, any future candidate who will ultimately run against Brown will be severely handicapped from the beginning, with a core group of lackluster donors and an unloyal group of strategists. If Warren decides not to run for the Senate seat, victory for Scott Brown is all but guaranteed.

But hey, here’s to hoping!