Reid appointee focus of fight

A woman U.S. Sen. Harry Reid appointed to a key federal panel is the center of a below-the-radar battle in New York and Washington, D.C.

As part of the passage by Congress of the Bush bailouts of Wall Street firms in 2008, a Congressional Oversight Panel was created to police the process. Reid got one appointment on the panel, and he chose Elizabeth Warren, an expert on bankruptcy law who had reportedly been recommended to Reid by Edward Kennedy. She became chair of the panel.

Now, with the passage of changes in financial regulation, Warren is being mentioned as a candidate to lead the new Bureau of Consumer Financial Protection created by the bill—the new sheriff of Wall Street, as one website described it. But Treasury Secretary Timothy Geithner, former president of the New York Federal Reserve, is reportedly opposed to her appointment by President Obama. As a result, a campaign for her opponent has been going on among groups like her former students and economic populist figures. Websites have been started, and newspapers have taken editorial stances. Reid’s office did not say whether he supports Warren for the new post.

Warren’s stance on the bailouts and regulation of Wall Street can be seen in her comments to author Robert Kuttner in his new book, Presidency in Peril:

“For years large companies tried to argue that they were indispensable and tried to get government aid. But for the most part, government held the line. The Chrysler bailout of 1979 was a breach, but it was not repeated. … In the 1990s, Enron went crazy looking for a bailout. They dominated futures markets in electricity. They argued that, ‘If we go down, the lights will go out.’ But government said no. Then along came Bear Stearns, which got direct government help. We pinned five dollars to the dog’s collar and hoped that somebody would take him.”

Warren is coauthor of the book The Two-Income Trap/Why Middle-Class Mothers and Fathers are Going Broke.