After a single anonymous source told the Huffington Post that Tim Geithner is trying to block Elizabeth Warren's potential nomination to head the Consumer Financial Protection Bureau, critics are teeing off on the Treasury Department.
While there is some tension between the two arising from Warren's job overseeing the TARP program, this story is being overblown. For instance, this item tries to catch the White House in some kind of "cleanup" operation resulting from the story, but all those on-the-record quotes complimenting Warren -- from the administration's regulatory point man, Assistant Secretary Michael Barr and White House communications guru David Axelrod -- are commonly expressed by government officials. Regardless of the rumors, keep these two facts in mind:
- This isn't Geithner's decision. It's President Obama's call, and more than any other official in government, he's been the driving force behind the administration's consumer push. He's a personal fan of Warren's, and she in turn has good relationships with White House staff. White House officials understand the history-making nature of this appointment and want someone who will leave a mark. Democrats think appointing Warren is good politics.
- The Bair Comparison. There have been comparisons between this conflict and Geithner's tensions with FDIC Chair Sheila Bair. For all the attention on that feud, Bair and Geithner have a strong working relationship, and Geithner has been criticized by reformers for supporting Bair's ideas on foreclosure prevention and echoing her concerns about various parts of the financial-reform bill. That doesn't mean that Treasury and the FDIC don't have their disagreements, but the personal aspects of these conflicts are often way overstated and have more to do with people's institutional roles.
Since I am mentioned in this post, and apparently have a faction now, I'd just note that after Treasury officials, including Geithner, spent 18 months working, often in concert with Warren, to create this new agency, it's foolish to take one anonymous report as a sign that Treasury isn't "in any way interested in fundamentally changing the balance of power between Wall Street and consumers."
If Geithner has reservations about Warren's ability to manage the complex bureaucratic process necessary to create the CFPB, the only serious reservation I've heard about appointing her, that can be solved by appointing experienced deputies. Whether or not Geithner wants Warren to head the agency -- I'm not sure where he stands and don't intend to speculate -- she is still the front-runner for the job. As someone who has long been an advocate of Warren's work -- I first profiled her for TAP last year -- I think that's great news.
-- Tim Fernholz
