What is it about Elizabeth Warren that drives the Wall Street Journal so crazy? This is the third negative editorial in the last 2 weeks. The latest attack shows both desperation and a poor command of the facts. Recently they tried to portray her as "rogue bureaucrat." Now, they're calling her a liar:
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Regarding Constraints on the CFPB's Authority
First, Warren told Congress that the CFPB is "the only agency whose rules can be overruled, obliterated, wiped out, negated by other agencies." This is true. But the Wall St. Journal says this is “exaggerating.” Why? Because the other agencies will be too afraid to overrule the CFPB for fear of being accused of “protecting the big banks.”
Clearly the Journal would like the CFPB to be even more beholden to the other, more bank-friendly agencies like the OCC and the Fed, but all Warren has done is point out – truthfully, mind you – that Congress designed the CFPB to be constrained in ways that other agencies are not. This is a fact. If the Journal has a problem with Congress, that’s fine. But going after Warren herself in this instance just makes the Journal look foolish, if not partisan.
On The CFPB's Budget
Ms. Warren’s second supposed lie concerns the new agency’s budget. In response to a question from Rep. McCotter (R-MI), Warren pointed out in her Congressional testimony that other bank regulators, such as the Fed and the FDIC, can set their own budgets, whereas the CFPB’s budget is capped as a percentage of the Fed’s income. The Journal tries to construe this as some kind of lie (calling it “another beauty”), but we just don’t see it. The Journal may be scandalized that the director of the CFPB decide how it's budget is spent, but there's no lie here from Ms. Warren. Again, this just looks desperate.
On The CFPB And the Fraudclosure Settlement
Warren’s third supposed lie concerns her role in the settlement talks between the state AG’s and the banks and mortgage servicers. Warren has said that she and others associated with the development of the new Bureau have been asked for “advice” by the DOJ and the Treasury, but have not been party to any negotiations. As far as all the world, including the Wall St. Journal, knows, this is completely, 100% true. There is ZERO evidence that Ms. Warren has done anything other than what she says she has done -- offer advice when asked for it. If there were evidence to the contrary, the Journal would already have published it. We’re calling their bluff on this one.
Still, the Journal calls Ms. Warren’s statements “disingenuous,” claiming that “Everyone knows that Ms. Warren and a handful of state attorneys general are driving this settlement to punish the banks and reward voters with mortgage principal writedowns.”
Here's what the Journal’s crusade against Ms. Warren has been reduced to – pure, baseless rhetoric. “Everyone knows”? Excuse us for pointing it out, but “everyone” does NOT know, including the Wall St. Journal. If the Journal claims to “know,” then we think they should pony up the evidence. It’s called “Put up or shut up.” But again, they don’t have any such evidence. They’ve got nothing on Elizabeth Warren so they’ve been reduced to blowing hot air as they do here, flippantly claiming that “everyone knows.” If anyone is weaving tales here, it's the Wall St. Journal.
The Journal Overlooks Basic Facts
Last, the Journal refers to Warren’s defenders as her “media idolators,” claiming that they “want to punish the banks one more time and grab another $20 billion to redistribute to voters before 2012.” What a freaking joke. The Wall St. Journal is so far behind the eight-ball on this, they don’t even understand that the proposed settlement is designed to absolve the banks of punishment. The Journal has gotten this issue completely backwards before and we wrote about it extensively here. Yves Smith has written about it here. And by the way, when were the banks "punished" the first time?
Contrary to the Journal’s woefully misinformed claims, the proposed settlement could be a gift to the banks. In fact, that’s why in the last couple of days several more state AG’s, not just the Republican ones who made such a splash recently, have withdrawn their support for the settlement. See here. And not because it punishes the banks too hard, but because the settlement is yet another attempt by the Obama administration to shield the banks (and servicers) from any and all accountability. The Journal has been so wrapped up in their narrative of Elizabeth Warren the “rogue bureaucrat,” that they’ve totally missed the basic implications of the proposed settlement, as well as the likely motivations of the other players involved. As journalists, they should be embarrassed for getting this so wrong.
Poor Reporting
Finally, some have speculated that the Wall St. Journal is telling deliberate falsehoods just to smear Ms. Warren on behalf of the large banks. We don’t see any hard evidence of that. Instead, we see plain old ignorance and incompetence. The Journal has flubbed this issue from the start, and because of their vendetta against Elizabeth Warren they continue to flub it. Nonetheless, if they decide they want to admit to being shameless shills for the banking industry, we’ll keep an open mind.