Commentary Magazine


Topic: Wall Street

Welcome to the NFL, Elizabeth Warren

Elizabeth Warren’s meteoric rise among Democrats has demonstrated one thing time and again: her real talent is in getting the mainstream media to act as her personal publicity agents. And today’s raft of stories, which focus on Warren claiming her first political scalp (sorry, couldn’t resist), are no different. In fact, Warren just outsmarted herself, got outmaneuvered by the White House, and further empowered Mitch McConnell and his Republican Senate majority. But you wouldn’t know it from most of the coverage, which hews obediently to the existing narrative of Warren’s influence.

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Elizabeth Warren’s meteoric rise among Democrats has demonstrated one thing time and again: her real talent is in getting the mainstream media to act as her personal publicity agents. And today’s raft of stories, which focus on Warren claiming her first political scalp (sorry, couldn’t resist), are no different. In fact, Warren just outsmarted herself, got outmaneuvered by the White House, and further empowered Mitch McConnell and his Republican Senate majority. But you wouldn’t know it from most of the coverage, which hews obediently to the existing narrative of Warren’s influence.

Last year, President Obama chose Antonio Weiss to be an under secretary at the Treasury Department. Warren vehemently opposed the nomination. Warren’s play was smart: no one outside of the Senate or Wall Street (Weiss works in investment banking) knew who he was, and no one really cared. And though Warren’s objections to Weiss were based on her ignorance of investment banking, tax law, and corporate economics, she had an advantage: her ignorance is shared by her political base.

She was striking a pose for her populist supporters, as I wrote in December, and they wouldn’t know that she was speaking gibberish. Warren is a demagogue in the classic mold: she distorts the truth to play on the fears of her followers in a bid to accrue political power–which she then has been known to abuse. True populists should be horrified by Senator Warren.

But it hasn’t caught up with her yet because the left doesn’t really have true populists. It has authoritarian mobs of conspiracy theorists with populist pretensions. So Warren’s influence grew, and we now learn that Weiss has withdrawn his name from consideration.

But why Weiss withdrew, and what he’ll do instead, are two crucial elements of the full picture, which doesn’t flatter Warren nearly as much as she thinks. First, from Bloomberg, here’s why he stepped back from the nomination:

Curiously, the Republican gains in the midterm election strengthened Warren’s personal power, even as they weakened her party. As one bitter Weiss ally pointed out, Harry Reid could have schedule a quick confirmation vote and likely prevailed if Democrats still controlled the Senate. The new Republican leader, Mitch McConnell, on the other hand, would relish dragging out Weiss’s confirmation hearing for months as Democrats tore each other to shreds. That same dynamic will obtain for at least the next two years for any nominee that Warren cares to target.

Right: Warren’s power comes from the Republicans, who don’t mind seeing Democrats fight it out amongst themselves. A more powerful Democratic Party means a less powerful Elizabeth Warren, because Harry Reid would run circles around Warren if he were the majority leader and a nominee really needed to get through. Procedurally, Warren’s shenanigans are only possible because the Republicans are letting her get away with it. If Republicans didn’t want her to have this power, she wouldn’t have it. Bloomberg’s headline is “Queen Elizabeth,” but of course she’s merely a pawn in a Senate-White House procedural chess match.

But even more important is what Weiss will be doing instead. Here’s Politico:

But the Lazard banker will still join the administration in the position of counselor to Treasury Secretary Jack Lew, which does not require Senate confirmation. …

Instead, Weiss has accepted the position advising Lew on domestic and international issues, which “will allow me to begin serving immediately in support of the Administration’s efforts to foster broad-based economic growth and ensure financial reform that protects consumers and reduces the likelihood of future financial crises,” he wrote.

Weiss will join the Treasury anyway, and give the same advice, not be much undercut by whoever eventually fills the under secretary seat. It may take a while to get a new nominee through the process, and in the interim Weiss will be establishing his place advising Lew. Additionally, the person who takes the under secretary spot will have the title but will be undermined by the fact that not only is he or she the second choice, but that the first choice still works in the building and has Lew’s ear.

Warren’s victory is, then, entirely symbolic. It will have no effect on policy. All it will do is act as an implicit threat to future nominees, pour encourager les autres. But it also raises a point of great irony. Warren’s attempt at governance is being undone here by the very administrative state whose power she has dedicated her political career to increasing. The big-government Frankenstein’s monster is turning on its masters.

The left has gone to great lengths to ensure that their preferred policies can be carried out without much interference from the democratic process. They expend much effort in removing accountability by empowering bureaucracies whose liberal crusades can survive electoral defeats precisely because they don’t answer to the people. Warren herself was supposed to lead one such agency. Republicans blocked her nomination to it, but weren’t able to stop the actual bureaucracy from being created.

Warren opposed Antonio Weiss. The Obama administration will get to hire him anyway. And Warren will continue fighting for the administrative state, completely oblivious to the irony.

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The Jobs Report

The July jobs report came in this morning a little below expectations. That’s a good thing for Wall Street. It tumbled 318 points yesterday because of the rebound in GDP to 4 percent for the second quarter reported on Wednesday. The stock market has been doing so well lately (it has more than doubled since its recession low in March 2009) because the Federal Reserve has been keeping interest rates near zero to bolster the economy. With bonds paying so little, equities have been the only game in town. But with a stronger economy, the Fed will begin to raise rates and money would begin shifting out of stocks and into other investments. So right now, good news is bad news on Wall Street.

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The July jobs report came in this morning a little below expectations. That’s a good thing for Wall Street. It tumbled 318 points yesterday because of the rebound in GDP to 4 percent for the second quarter reported on Wednesday. The stock market has been doing so well lately (it has more than doubled since its recession low in March 2009) because the Federal Reserve has been keeping interest rates near zero to bolster the economy. With bonds paying so little, equities have been the only game in town. But with a stronger economy, the Fed will begin to raise rates and money would begin shifting out of stocks and into other investments. So right now, good news is bad news on Wall Street.

The economy added 209,000 jobs last month, down from June’s 298,000 (revised upwards in the latest report). Unemployment ticked up to 6.2 percent from 6.1 last month. Job growth has been above 200,000 a month for the last six months, the first time that has happened since 1997. The participation rate went up, but only a single notch, from 62.8 percent to 62.9.

But black unemployment rose from 10.7 percent to 11.4, while black youth unemployment went from 33.4 percent to 34.9. Both these numbers tend to be volatile, but they are still dismal. The number of people working part time for lack of full-time jobs was unchanged at 7.5 million; 3.2 million people have been unemployed for six months or longer, almost one-third of all unemployed.

In all, another so-so jobs report, typical of the Obama recovery.

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Ryan Unleashes Liberal Incivility

With the heightened focus on the Republican vice presidential candidate, it was only natural that the Democratic incumbent in that office would say something to get a little attention for himself. Vice President Joseph Biden, the gift that keeps giving to Republicans, wasn’t content to merely criticize Republican policies at a campaign appearance in Danville, Virginia; he claimed the GOP would revive slavery. As the Weekly Standard noted, affecting a drawl for the benefit of his south Virginia audience, Biden lambasted the idea that Mitt Romney and Paul Ryan would free up Wall Street to create more prosperity:

“Look at their budget, and what they are proposing,” Biden said. “Romney wants to let–he said in the first hundred days, he’s going to let the big banks once again write their own rules. Unchain Wall Street. They going to put y’all back in chains.”

While Democrats may defend this as just another Biden exaggeration, this is a clear-cut case of racial incitement. After all, unless he is referring to Jews being returned to slavery some 3,500 years after the Exodus from Egypt, the only possible allusion here is to the enslavement of African Americans in the south. This is more than just garden-variety political hyperbole. It is an unfortunate example of just how desperate Democrats are to scare voters into backing the president’s re-election.

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With the heightened focus on the Republican vice presidential candidate, it was only natural that the Democratic incumbent in that office would say something to get a little attention for himself. Vice President Joseph Biden, the gift that keeps giving to Republicans, wasn’t content to merely criticize Republican policies at a campaign appearance in Danville, Virginia; he claimed the GOP would revive slavery. As the Weekly Standard noted, affecting a drawl for the benefit of his south Virginia audience, Biden lambasted the idea that Mitt Romney and Paul Ryan would free up Wall Street to create more prosperity:

“Look at their budget, and what they are proposing,” Biden said. “Romney wants to let–he said in the first hundred days, he’s going to let the big banks once again write their own rules. Unchain Wall Street. They going to put y’all back in chains.”

While Democrats may defend this as just another Biden exaggeration, this is a clear-cut case of racial incitement. After all, unless he is referring to Jews being returned to slavery some 3,500 years after the Exodus from Egypt, the only possible allusion here is to the enslavement of African Americans in the south. This is more than just garden-variety political hyperbole. It is an unfortunate example of just how desperate Democrats are to scare voters into backing the president’s re-election.

We can expect Democratic spin masters to excuse this as merely Joe being Joe, the crazy uncle of our political system whose excesses should be tolerated if not smiled at. But what is on display in this video is a willingness to demonize opponents that eclipses the routine nastiness we’ve become accustomed to during elections. Biden’s comment is at the level of 9/11 truther–let alone an Obama birther. But this is more than just another example of how hypocritical mainstream liberal complaints are about civility in politics.

The Biden blast shows that in this election, there is literally nothing to which the Obama campaign would not stoop in order to besmirch their opponents. If, as Seth wrote earlier today, liberals are prepared to call Romney and Ryan “murderers,” why wouldn’t they claim the GOP is in favor of slavery?

While some conservatives are guilty of uncivil behavior, the Biden gaffe (and it will be interesting to see if liberals are prepared to admit it was a gaffe rather than a justified comment) points out commentator Dennis Prager’s insight about the difference between the left and the right. Most conservatives merely think liberals are wrong. Most liberals really believe most conservatives are evil.

While it is possible to disagree without being disagreeable — a character trait for which Ryan is well-known — to expect civility from someone who thinks his opponent is beyond the pale is to demand more than a partisan such as Biden can manage. As long as liberals are prepared to demonize Republicans in this manner, we must expect more of this kind of despicable behavior from Democrats this fall–if not far worse.

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