Larry Summers Helped Torpedo Elizabeth Warren CFPB Nomination
Former Obama administration economic adviser Larry Summers helped torpedo a bid from current Sen. Elizabeth Warren (D-Mass.) to head the Consumer Financial Protection Bureau in the summer of 2010.
The Summers-Warren conflict was reported by The Boston Globe and confirmed to The Huffington Post by two former Obama administration officials.
The Globe story builds on reporting from Ron Suskind's book on the Obama administration's economic management, Confidence Men, revealing that while Summers publicly praised Warren as an excellent candidate to head the CFPB in July, he in fact opposed appointing to her director of the new regulatory agency when he served as director of the president's National Economic Council. Although Summers had been an early advocate of Warren's idea to establish a consumer regulator to deal with abusive lending, he was rankled by the support she received from other administration officials, particularly Christina Romer, who chaired Obama's Council of Economic Advisers. Summers and Romer repeatedly clashed on policy matters, with Summers infamously blocking Romer from presenting an analysis to Obama, revealing an economic need for a stimulus package much larger than $800 billion.
Although a coalition of consumer advocates and progressive interest groups supported Warren's nomination as CFPB director with a full five-year term, Obama instead named her to a temporary post running the new agency.
More: http://www.huffingtonpost.com/2013/08/07/larry-summers-elizabeth-warren_n_3720533.html
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From the Boston Globe article:
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On the Fed pick, Obama and White House officials are said to be leaning toward Summers, who helped guide Obama out of the depths of the 2008 recession. But the appointment is far from secured, given the enthusiastic support some Democratic senators, Warren among them, are generating for Yellen.
Both Summers and Warren declined requests for an interview. At the root of their disagreements is a fundamental difference in approach to economic regulation, with Warren placing far more emphasis on everyday taxpayers. Summers has maintained stronger Wall Street ties and has worked as a paid consultant at Citigroup since 2012, the banking company confirmed last month.
As treasury secretary under President Clinton, Summers worked to repeal the Glass-Steagall Act, dismantling the wall between commercial banks and many investment activities. Warren and many other observers contend the repeal contributed to the 2008 financial collapse and now, as senator, she is spearheading legislation for a new version of Glass-Steagall.
“She just tends to see things through Main Street and he sees things through Wall Street,” Sheila Bair, a former FDIC chairwoman, said.
“Elizabeth is wary of large institutions and their financial power, and Larry views them as necessary,” she added. “She fears that their market power [risks hurting] the economy.”
More http://www.bostonglobe.com/news/politics/2013/08/06/battle-over-fed-chairmanship-adds-new-complexity-relationship-larry-summers-and-elizabeth-warren/bX36xfpxP4YkTLCE1PCRkN/story.html
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