Elizabeth Warren grills banking regulators on trials for big banks

February 16, 2013 5:39 PM

Elizabeth Warren, in her new role as a member of the Senate banking committee, asks banking regulators: when did you last take a big Wall St bank to trial? (SLYT)
posted by shivohum (91 comments total)

suck it, SEC
posted by rebent at 5:45 PM on February 16, 2013 [1 favorite]

That was really satisfying.
posted by migurski at 5:46 PM on February 16, 2013 [8 favorites]

<3
posted by ChuraChura at 5:47 PM on February 16, 2013 [2 favorites]

I saw this earlier and had mixed feelings about it. Not that I don't agree with everything she said and the need to say it, and not that I wouldn't like to see those that orchestrated the mess they created shut away in a dark, damp cell, but, in the end, it felt like a bit of a stunt on her part. I guess the question is, did she do it to facilitate change or attract attention to herself? Could she have used that intelligence and focused performance and energy in a forum that would have more clout...We'll probably never know.
posted by HuronBob at 5:49 PM on February 16, 2013 [3 favorites]

Elizabeth Warren's Aggressive Questioning Prompts Anger From Wall Street
posted by homunculus at 5:52 PM on February 16, 2013 [1 favorite]

I'm just glad that someone said it in that forum. If it was stunty it sucks, but even those words being strung together in that order in that room is progress, sad to say.
posted by nevercalm at 5:53 PM on February 16, 2013 [5 favorites]

Aaron Swartz Memorial On Capitol Hill Draws Darrell Issa, Elizabeth Warren
posted by homunculus at 5:53 PM on February 16, 2013 [1 favorite]

A Tale Of Two Senators
posted by homunculus at 5:54 PM on February 16, 2013

She could have maybe pushed the SEC on this behind the scenes, sure. But that would be basically like settling with the giant banks instead of taking them to trial --- it would be to ignore the value of publicly setting the agenda and drawing attention to the issue.

We should be utilitarian about this. Who cares if it was a stunt? She's asking the right questions and pushing on the right people.
posted by voltairemodern at 5:55 PM on February 16, 2013 [57 favorites]

This is even more satisfying considering her history with the Consumer Federal Protection Bureau.

They worked so hard to keep her out and she came back as a fucking Senator on the fucking Banking Committee where she will be able to inflict 100x more damage than she ever could on a barely-funded government agency that almost no one has heard of.
posted by Room 641-A at 6:03 PM on February 16, 2013 [68 favorites]

Nobody has been asking this question for years and it's about time somebody did. Could be the first rock that starts a long-overdue avalanche. These people deserve jail time, not bonuses.
posted by fifteen schnitzengruben is my limit at 6:05 PM on February 16, 2013 [10 favorites]

I LOVE ELIZABETH WARREN! WARREN FOR PRESIDENT 2016!
posted by QueerAngel28 at 6:07 PM on February 16, 2013 [30 favorites]

I guess the question is, did she do it to facilitate change or attract attention to herself? Could she have used that intelligence and focused performance and energy in a forum that would have more clout...We'll probably never know.

And what forum besides the Senate Banking Committee would you suggest for a Senator to question regulators?

Bankers and other members of the finance community have opposed Warren as she rose from being a Harvard University law school professor to a Massachusetts senator. They opposed her permanent nomination to head the Consumer Financial Protection Bureau, which she created. After Senate Republicans said that they would filibuster her nomination, she ran for Senate in Massachusetts. Wall Street donated heavily to her opponent, former Sen. Scott Brown (R-Mass.), but she won the seat. Warren became a member of the Senate Banking Committee, despite further heavy opposition from banking lobbyists.

In the face of that kind of opposition, what do you want her to do? Send them a strongly worded greeting card? Wall Street wants absolute control of your government and your future. In my opinion, being openly hostile to bullshit responses to important questions is the minimum we should expect from every member of the Banking Committee.
posted by tripping daisy at 6:11 PM on February 16, 2013 [130 favorites]

HuronBob: Could she have used that intelligence and focused performance and energy in a forum that would have more clout...We'll probably never know.

Are you trying to be sarcastic? I'm wondering, because the rest of your comment sounds serious, and then you say this? She's the chairman of the Senate Banking Committee, the people that ultimately oversee banks in this country.

What possible place on the entire planet could she ask those questions that would be better? What other forum would have more clout? That's as bigtime as it gets.
posted by Malor at 6:13 PM on February 16, 2013 [34 favorites]

If they're getting all these "landmark" settlements, why can't they afford trials?
posted by Brocktoon at 6:13 PM on February 16, 2013 [2 favorites]

Of course it was a stunt. Everyone knows that it was a stunt. So what? The real question is whether the stunt will work. If stunts like this increase the probability that banks get taken to trial (at least sometimes) when they break the law, then good. Stunt away.
posted by Jonathan Livengood at 6:15 PM on February 16, 2013 [6 favorites]

Wall Street Bankers Surprised That Senator Elected to Hate Them Hates Them
posted by Rustic Etruscan at 6:23 PM on February 16, 2013 [6 favorites]

A stunt? Ted Cruz's attacks on Chuck Hagel was a stunt.

Have we moved so far from "a government by the people, for the people" that a Senator on the Banking Committee asking a very simple, legitimate, and long over-due question is considered a stunt?
posted by Room 641-A at 6:24 PM on February 16, 2013 [75 favorites]

that a Senator on the Banking Committee asking a very simple, legitimate, and long over-due question is considered a stunt?

Exactly. This could be an Onion article.

Although the comparison with Ted Cruz is interesting. Both are brilliant, have amazing pedigree -- Cruz was a former Supreme Court clerk and Harvard Law School alum and Warren of course was a professor there herself -- and are fierce opposites ideologically.
posted by shivohum at 6:30 PM on February 16, 2013 [1 favorite]

The SEC exists to stabilize the banking and finance system. Are they doing that? No, they are not.
posted by seanmpuckett at 6:37 PM on February 16, 2013

but, in the end, it felt like a bit of a stunt on her part

~ Welcome to politics! ~
posted by JHarris at 6:44 PM on February 16, 2013 [6 favorites]

Sounds like legitimate questions. I'm sorry, how is this a stunt?


Given how hard the banking lobby has worked to try and sideline Warren I'm actually somewhat amused at their bluster now. ''How dare this woman we spent millions to suppress dislike us. Now we must say -more- bad things about her!!!"
posted by edgeways at 7:01 PM on February 16, 2013 [2 favorites]

If you think this was a stunt, I refer you to (random example) pages 117 through 119 of the report "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History", issued last July by the Senate's Permanent Subcommittee on Investigations. It contains this impressive-sounding quote:

"In recent years, a number of large, international banks have been prosecuted for systematically violating OFAC [Office of Foreign Asset Control] prohibitions. In most cases, the violations involved the practice of stripping information from wire transfer documentation to hide the participation of a prohibited person or country, and executing the prohibited transaction through a U.S. dollar account at a U.S. financial institution."

After then describing how banks processed large amounts of money for countries like Iran, Cuba, Burma, and Libya, the report presents a litany of cases that did not result in the above-mentioned prosecutions.

So yeah, I think it's nice that Elizabeth Warren is asking these questions, because apparently some people have different ideas about what is meant by the word "prosecution".
posted by compartment at 7:03 PM on February 16, 2013 [3 favorites]

Oh, Liz, I think I love you.
posted by evilDoug at 7:09 PM on February 16, 2013 [2 favorites]

This is even more satisfying considering her history with the Consumer Federal Protection Bureau.

Warren Calls on Republicans to End Block of Consumer Agency Vote
posted by homunculus at 7:10 PM on February 16, 2013 [1 favorite]

I refer you to (random example) pages 117 through 119 of the report "U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History"

Gangster Bankers: Too Big to Jail. How HSBC hooked up with drug traffickers and terrorists. And got away with it
posted by homunculus at 7:14 PM on February 16, 2013 [1 favorite]

In the meantime, don't blink, or you'll miss another bailout.
posted by Vibrissae at 7:15 PM on February 16, 2013 [2 favorites]

did she do it to facilitate change or attract attention to herself?

Both, I hope. I'd like see that woman re-elected three more times (I hope she'll still be strong and healthy when she's 80), and to do that she needs to be have the political savvy to do good stuff while making sure she gets the credit for it as well.
posted by straight at 7:17 PM on February 16, 2013 [1 favorite]

And in other news, this week her recent election opponent, Scott Brown, joined Fox News. (And, apparently, looked very pretty doing so. Yeesh.)
posted by benito.strauss at 7:21 PM on February 16, 2013

where she will be able to inflict 100x more damage than she ever could on a barely-funded government agency that almost no one has heard of.

This is demonstrably wrong. Being the confirmed head of the CFPB is a far more powerful position with an incredible tool set to make change - plus the early heads get to recruit senior and junior staff who can have a huge impact for many years. That position may not be publicly visible but it has way more ability to change the banking industry.
posted by allen.spaulding at 7:25 PM on February 16, 2013 [1 favorite]

This was a stunt, and a potentially catastrophic one. Warren should be smarter than this. For example,

"When did you last go to trial?"
"I have not gone to trial. You know why? It's because of a shitty legal system overseen by Senators just like you. You think you're a crusader now? *I'm* the one trying to do right by the people by seeking cost-effective resolutions in a fucked up system. Not you, Captain Grandstander, asking questions you already know the answer to. Why don't you stop playing to the C-Span cameras and help us fix the system? Isn't that what the people of your state sent you here to do, Senator?"

Of course, none of these regulators would do that, because they're cowards, too.
posted by Cool Papa Bell at 7:27 PM on February 16, 2013 [2 favorites]

I mean, seriously, Elizabeth? Taking potshots at career bureaucrats just doing their jobs? Why don't you go find a barrel, see if you can shoot some fish?
posted by Cool Papa Bell at 7:30 PM on February 16, 2013

"I have not gone to trial. You know why? It's because of a shitty legal system overseen by Senators just like you. You think you're a crusader now? *I'm* the one trying to do right by the people by seeking cost-effective resolutions in a fucked up system. Not you, Captain Grandstander, asking questions you already know the answer to. Why don't you stop playing to the C-Span cameras and help us fix the system? Isn't that what the people of your state sent you here to do, Senator?"

I know. That's why the DOJ settles with pot growers and crack dealers for $500 fines. They just want to get those cases cheaply off their plate and institute some vaguely punitive measures that might discourage said behavior in future but still lets them make a profit.
posted by Talez at 7:34 PM on February 16, 2013 [39 favorites]

Taking potshots at career bureaucrats just doing their jobs?

So the problem is that the OCC has not been doing its job in forever and the not-dearly-enough departed OTS was just a clusterfuck of incompetence. And yes, Tom Curry just got there (and Warren noted this) he's not defending himself but the record of the previous comptroller.

The OTS believed that the banks, and not the public, were their clients - and they behaved as such. Settlements were rarely used to deter behavior but to pre-empt aggressive efforts by state AGs who wanted actual justice. And there's a long paper trail of the OTS and OCC hesitating to even bother with any enforcement at all.

There's no reason to think that the OCC will do its job any time soon - unless there's some pressure placed on it by the governing body that is assigned to do it. Senator Warren is actually doing her job here.

Here's a shortlist of entities the OTS supervised: [IndyMac, AIG, Washington Mutual]. Here's a shortlist of Senators on the Banking Committee in the 2000s who aggressively went after the OTS to make sure it was doing the right thing: []
posted by allen.spaulding at 7:39 PM on February 16, 2013 [15 favorites]

Taking potshots at career bureaucrats just doing their jobs?

...because just like in the private sector, occasionally you need to light a fire under people's asses to get a job done properly.
posted by bonobothegreat at 7:39 PM on February 16, 2013 [10 favorites]

Taking potshots at career bureaucrats just doing their jobs?

Why is it taking potshots? Most people don't realize that the banks are so rarely taken to trial, and that trial has real value: as a way to increase the value of settlements (you have more leverage in a negotiation if the other side knows you're really prepared to walk away and have in the past), to get reams of public testimony from executives under subpoena and see what's really going inside these institutions, and to go against the public perception that the big players are above the law and have bought off government, among other excellent reasons.

So Warren wanted to remark on the mysterious absence of trials, something which the bureaucrats couldn't justify very well. Seems like a really necessary point.
posted by shivohum at 7:41 PM on February 16, 2013 [23 favorites]

Who cares if it was a stunt?

I don't! There is nothing wrong with a stunt per se. If it makes people think, then good.

If regulators start to worry about Senator Warren asking the same question every time they have to testify before the Senate Finance Committee, that might encourage them to develop a backbone with the big banks. I, for one, would like that very much.
posted by ambrosia at 7:42 PM on February 16, 2013 [4 favorites]

Are people seriously making a tone argument about how she said this? She's not saying this in "the right way" or the "right place"?

More importantly; would her "aggression" and "calling attention to herself" bother you if she was a dude?

Because there's a history of that kind of thing, and it's not pretty.
posted by emjaybee at 8:10 PM on February 16, 2013 [53 favorites]

homunculus: "Elizabeth Warren's Aggressive Questioning Prompts Anger From Wall Street"

Good! Fuck 'em!
posted by notsnot at 8:11 PM on February 16, 2013 [17 favorites]

Now this is a Warren commission I can get behind.
posted by cmoj at 8:16 PM on February 16, 2013 [11 favorites]

Sure, this might have been just a political stunt... but who cares? It was awesome! Somebody definitely needed to ask those questions, and the fact that it was done in such an attention-grabbing way means that it will get more people thinking about these issues - which is important since thought eventually translates to action.
posted by wolfdreams01 at 8:27 PM on February 16, 2013 [1 favorite]

I understand that sometimes it's not just about what you want, but how you get it. And sometimes it really is important to get what you want the right way.

But are we really going to complain that Elizabeth Warren just gave us exactly what we want in slightly the wrong way? How would you rather she do her job?
posted by Peevish at 8:35 PM on February 16, 2013 [1 favorite]

I know it's a stunt, and I know it's grandstanding, and I know that ultimately, the people being called out here are not really the ones that need blame, as the entire system is corrupt and damaged.

I know all that, and yet, I'm still going to be very, very satisfied when I eventually get to cast my ballot for her for president.

Because she is the closest I have seen to what I really want in a leader; someone on the left who is smart, capable, and unafraid to be unpopular to make a point.
posted by quin at 8:41 PM on February 16, 2013 [12 favorites]

Now it's time for bed, but tomorrow morning I'm going to look up the SEC's web site, and send them a little e-mail about how Aunt Liz was right, and the citizens of the United States are real disappointed in them, but they can make it better by sending some bank fraudsters to jail.
posted by tommyD at 9:02 PM on February 16, 2013

Pretty tacky having the water bottle labels facing the camera like Gatorades after a football game.
posted by El Mariachi at 9:02 PM on February 16, 2013 [7 favorites]

El Mariachi nailed it. And that scares the crap out of me.
posted by HuronBob at 9:06 PM on February 16, 2013 [1 favorite]

I don't know nearly enough about the law to know about whether a credible case could have been made against large banks, but I do know a bit about finance, and her argument that most companies have a market to book ratio greater than one but banks don't therefore banks' balance sheets are fraudulent is definitely wrong--there are many reasons this might not hold, chief among them most companies aren't generally marking their assets to market. GAAP has moved in that direction in general but is not there (nor is it clear it is desirable to do so). I'm not even sure it's true--at least as far as I can tell, of S&P 500 financial services' companies, the market/book ratio isn't less than one.
posted by dsfan at 9:07 PM on February 16, 2013

dsfan: Here's a chart of Bank of America's Market to Book ratio, currently .59, not above 1 since 2009.
Here's JPM Chase, currently .95
Citibank: .68

Those are the three largest banks in America by assets. There are some big banks that have ratios above 1, but what's getting skewing the S&P is the 42% that are financial services (specifically something like Visa, which is a payment network not a bank).

Senator Warren isn't wrong on that fact.
posted by allen.spaulding at 9:22 PM on February 16, 2013

dsfan: Here's a chart of Bank of America's Market to Book ratio, currently .59, not above 1 since 2009.
Here's JPM Chase, currently .95
Citibank: .68

Those are the three largest banks in America by assets. There are some big banks that have ratios above 1, but what's getting skewing the S&P is the 42% that are financial services (specifically something like Visa, which is a payment network not a bank).

Senator Warren isn't wrong on that fact.

You think 0.95 is evidence of fraud?
posted by dsfan at 9:29 PM on February 16, 2013 [1 favorite]

This isn't a stunt, this is democracy. A lot of ordinary people, people like myself, who don't understand many of the finer points of banking and finance, we see ourselves losing our homes, we see trillions of our tax dollars going to support this system and we see those responsible rich as ever, none the worse. We have valid questions and we expect our representatives to put our questions to those responsible and to those who should have the power to prevent or rectify the situation.

It's taken six years, and millions of dollars of campaign spending to get *one* person in there, to a legitimate government forum, to put these questions directly to the faces of the people whose salaries we pay.

To call this a political stunt to advance Ms. Warren's career is cynical in the extreme and that cynicism would be much better placed questioning how our democracy is so broken that we haven't seen a lot more of this.

yeah, I realize she isn't the only one in there doing this, but she's the most high profile outspoken person who ran largely on promises to represent her constituents on this matter
posted by Slarty Bartfast at 9:53 PM on February 16, 2013 [46 favorites]

Well, I should say in fairness she also said it could be that the banks are unmanageable--the problem there is, it's not very clear why that would manifest itself in such a way that JPM is close to immune while Citi's stock is "punished" in the stock market.

The next two largest bank holding companies by assets, incidentally, are Wells (1.27) and Goldman (1.11). So you have, of the five largest bank holding companies by assets, two that trade well below, two that trade well above, and one that trades slightly below book.

I think there is some weirdness in BAC and C myself, by the way, but I think her case about "Wall Street" in general is somewhat overstated.
posted by dsfan at 9:54 PM on February 16, 2013 [1 favorite]

Who says Democrats aren't tough on crime?
posted by Homeboy Trouble at 10:40 PM on February 16, 2013 [2 favorites]

I have been a fan of hers since watching this, The Coming Collapse of the Middle Class from a 2008, UC Berkeley Graduate Council Lecture.
I was overjoyed when she decided to run for the Senate and ecstatic when she took out that douchebag Scott Brown.
Go Elizabeth Warren!
posted by dougzilla at 10:44 PM on February 16, 2013 [3 favorites]

someone on the left who is smart, capable, and unafraid to be unpopular to make a point.

Unafraid to be unpopular? Big banks are about as popular as an open MRSA sore on your groin. Attacking them is wildly popular.

Most Congress people are likely too in the banks' pocket to do that, of course, but that's a different question entirely. Going after banks isn't unpopular, just unprofitable.
posted by Justinian at 10:57 PM on February 16, 2013

Taking potshots at career bureaucrats just doing their jobs?

They aren't doing their jobs. Regulatory capture, it's a thing.
posted by kenko at 11:47 PM on February 16, 2013 [11 favorites]

The best part of the whole thing is how she bats down, over and over again, the long streams of bullshit that these people try to spew. "yeah, yeah, we know that, everyone does that, but what about…". Straight up, no nonsense. Watch the old movie "Maxed Out". That's where I was introduced to Ms. Warren and immediately fell in love. She's the real deal.
posted by readyfreddy at 12:38 AM on February 17, 2013

You think 0.95 is evidence of fraud?

I think the enormous amounts of evidence of fraud is the evidence of fraud. We're just wondering why there seems to be no repercussions for said fraud save a few percentage points off the top of the take.
posted by fullerine at 12:40 AM on February 17, 2013 [5 favorites]

Could someone explain what the Market to Book ratio is?
posted by colfax at 2:18 AM on February 17, 2013 [1 favorite]

This isn't a stunt, this is democracy.

I can't say it any better. I suspect unconscious misogyny in those who complain of her "aggression", and of stunting. She knows what she's talking about, she is honest and courageous, and she is doing exactly what she was elected to do.
Man, I sure hope that comment about attacking helpless bureaucrats was sarcasm, 'cause otherwise: wow!
posted by Hobgoblin at 5:28 AM on February 17, 2013 [9 favorites]

That was really pretty great. I was a bit disappointed that she didn't go one by one and get each individual on the record as saying "duh, uh, nobody told me there would be hard questions".

Go Liz!
posted by sammyo at 5:35 AM on February 17, 2013

[...] these people are still a part of that system and that makes them our enemy. You have to understand, most of these people are not ready to be unplugged. And many of them are so inured, so hopelessly dependent on the system, that they will fight to protect it.

- Sen. Elizabeth Warren
posted by 1adam12 at 5:50 AM on February 17, 2013 [2 favorites]

What saddens me is this is what many people wanted Obama to do when they elected him. Create real change and shake up the status quo of malfeasance and incompetence. Maybe we were being unrealistic because being President requires more nuance, but it's nice to see someone in the government ask the common sense questions we've ALL been asking for years.
posted by zooropa at 5:54 AM on February 17, 2013 [3 favorites]

Could someone explain what the Market to Book ratio is?

When you take the assets of a company and subtract the liability you get the net asset value. The outstanding shares multiplied by the share price gives the market cap (value) of the company. Sometimes the market will think the value of the company is less than the net asset value of the balance sheet.

This is usually because:
1) The market is being stupid and spooked by something.
2) The market thinks the balance sheet is full of shit and the assets are way overvalued.

The argument is that the biggest financial services players have been consistently trading below book value for an extended period of time. The market knows these guys are full of shit because they've been full of shit about their asset prices before. Something fishy is still going on and the alphabet soup of agencies need to get to the bottom of this and find out where that dead fish smell is coming from before this all blows up again.
posted by Talez at 6:23 AM on February 17, 2013 [10 favorites]

You think 0.95 is evidence of fraud?

I didn't say she's drawing the right conclusions - but rather than she's right that the largest banks are exhibiting this behavior. And it's worth asking, given the nature of the industry and given historic trends.

People, this is one of the exact purposes of the Senate Banking Committee - to ensure that regulators are doing their jobs.
posted by allen.spaulding at 7:17 AM on February 17, 2013 [3 favorites]

I guess the question is, did she do it to facilitate change or attract attention to herself?

The best possible thing Warren can do is draw attention to herself. Because that's how we get more Congress-people to act like her.

The more visibile she is, the more liked she is, the more seen she is, the more her fellow Senators (and other elected officials) will act like her. It's the essence of leadership.

I hope she pulls this kind of 'stunt' every chance she gets.
posted by Frayed Knot at 9:13 AM on February 17, 2013 [18 favorites]

I LOVE ELIZABETH WARREN! WARREN FOR PRESIDENT 2016!
posted by QueerAngel28 at 9:07 PM on February 16

This. Exactly this. THIS is what I thought when I heard Obama's speech at the 2004 DNC.
posted by yoga at 9:30 AM on February 17, 2013 [2 favorites]

I guess the question is, did she do it to facilitate change or attract attention to herself?

I think the question is, how can you even ask this question?

She is a national figure, a US Senator. Before that she was a Harvard law professor and consumer protection advocate whose efforts resulted in the establishment of a new federal agency. She is an author and a frequently interviewed expert on personal finances and the economy. She was chair of the Congressional Oversight Panel that was created to oversee TARP. She is an influential public policy figure and a rising star in the Democratic Party.

It is not her freaking job (or her purpose) to be modest and retiring.
posted by caryatid at 10:22 AM on February 17, 2013 [22 favorites]

As a career govt employee I freaking wish more questions like this got asked. Most of the questions we get from politicians amount to "why you so mean to my friends???!?" This has been going on for so long that most upper level govt bureaucrats are spineless yes (wo)men. Because that's what's been rewarded for the past 30 years. Rewarding regulatory agencies for kicking pass and taking names is just a foreign, but extremely welcome, concept to your average bureaucrat.
posted by fshgrl at 10:59 AM on February 17, 2013 [2 favorites]

What saddens me is this is what many people wanted Obama to do when they elected him.

Obama's been everything I reasonably expected. The thing is, you have enough Obamas, you start getting a few Warrens. You get enough Warrens in there, who knows what doors open. We might even end up with some kind of representative democracy.
posted by Slarty Bartfast at 4:07 PM on February 17, 2013 [15 favorites]

Cool Papa Bell: "Taking potshots at career bureaucrats just doing their jobs?"

Wrong. These were not career bureaucrats. These were all political appointees, nominated by the President and confirmed by the Senate, just the opposite of career bureaucrats. These political appointees come from the revolving door between bank lobbyists and political jobs. They start in the banking industry, do a few years in Washington, and then go back to the banking industry. They have no motivation to muss the feathers of their past and future employers. Someone needs to hold their feet to the fire.
posted by JackFlash at 6:40 PM on February 17, 2013 [14 favorites]

Was it a stunt? I.e., did she know the answer before she asked the question, and she asked the question for effect? I sure hope so. It was extremely effective. It's appalling that bankers are not held accountable for their actions.

Wall Street angry? awww, too bad. I'll bet they're not half as angry as I am. I'd feel better if they were scared.
posted by theora55 at 8:30 PM on February 17, 2013 [1 favorite]

Was it a stunt? I.e., did she know the answer before she asked the question, and she asked the question for effect? I sure hope so. It was extremely effective. It's appalling that bankers are not held accountable for their actions.

Lawyers never ask public questions they don't know the answer to.
posted by jaduncan at 3:31 AM on February 18, 2013 [3 favorites]

If I had a magic wand, we would have an Elizabeth Warren/Cory Booker ticket in 2016.
posted by jbickers at 6:06 AM on February 18, 2013

What about Barney Frank? Can we have Co-VPs?
posted by seanmpuckett at 7:37 AM on February 18, 2013 [1 favorite]

From the comments above I expected her to be much more aggressive in her manner, for it to be described as a "stunt" I mean.

The well being of the US economy, and therefore a large part of the North American economy, is directly linked to the behaviour of these large financial institutions. The fact that they have not, in any significant way, ever had to answer for the mismanagement of their affairs is mindboggling.

And now that AIG is thinking about suing the government for the bailout conditions is further evidence that these large financial institutions no longer respect the government or fear its reprisal. That a Senator is at least asking the right questions to the regulators is, to me, a ray of hope.

Anyways, I hope this "stunt" is just the beginning...
posted by Vindaloo at 9:44 AM on February 18, 2013

Hey, my new favourite American. Go Liz!
posted by turgid dahlia 2 at 6:04 PM on February 18, 2013

It's kind of interesting to see how things are playing out in this thread, because, to me, it's illustrative of what's happened to American democracy.

I mean, the framing of this as a stunt, the digressions into minutae of percentages and indicators, the talking about her image...this is what all of these banks would prefer you be talking about. Anything at all except the actual questions that Elizabeth Warren actually asked.

Because she asked the obvious questions, and the thing about the obvious questions is that there is an entire media apparatus devoted to making good and sure those questions don't get asked. At least not anywhere public. Or by anyone photogenic.

It's not coincidence that Elizabeth Warren's credibility is such an enormous, repeated target. Because that's the only way left for the banks to defang her. It fits a pattern, too: Obama's been a pain in their ass, but not nearly as punitive as he could have been. And that's because they're pouring tremendous amounts of money into making sure he's distracted by other fights.

Well, Elizabeth Warren doesn't have other fights. This is her fight. This. Right here. It's why she set up the CFPB, it's why she ran, it is what she cares about to the bottom of her soul. And the banks know that. It doesn't matter what they try to do to her; Scott Brown already did all the oppo there is to do, and he found nothing. So, short of killing her, they've got no way to shut her up.

And the key thing is that Elizabeth Warren is not, emphatically, a Scary Black Man or a Wise Latina or an Envirofascist or any of those tried-and-true caricatures. She's a grandmotherly white woman. It's going to be really damn hard to trash her, because she's an archetype. Hillary Clinton, you can get away with calling her a bitch, because Hillary Clinton has a habit of letting her total contempt for stupidity show. Plus, you know, it's Hillary Clinton.

Not Elizabeth Warren, though. Her image appears to be robustly immune to that kind of stuff. That scares the living shit out of the banks, because, again, short of killing her, they're tapped. And here she comes, asking the obvious questions that have been successfully buried for years by the most successful public relations management campaign the world's ever seen.
posted by scrump at 5:01 PM on February 19, 2013 [9 favorites]

I'm with early posters. A stunt. She's got a 2016 POTUS run to think about, if she actually gets bankers to trial, not even to prison, I'd be shocked.
posted by 922257033c4a0f3cecdbd819a46d626999d1af4a at 5:48 PM on February 19, 2013

[crosses fingers]
posted by bonobothegreat at 6:51 PM on February 19, 2013

Stunts are important. In fact, it seems these days like only stunts get media attention. The question is, is it only a stunt?
posted by JHarris at 10:02 PM on February 19, 2013 [2 favorites]

Weeeeeeell, you could also say that the Woolworths Lunch Counter was a stunt. There is also evidence that Rosa Parks was putting herself up as a stunt on the bus. And John Scopes teaching evolution was definitely a stunt.

But those stunts sure led to getting things accomplished, didn't they?

...No joke - when I first read about this, I spent a good ten minutes looking into how I could realistically have 1-800 flowers deliver Elizabeth Warren a thank-you bouquet. I realized that by the time it got through security it'd be dead, but I tried to find a way because man, she deserves it...
posted by EmpressCallipygos at 8:58 AM on February 20, 2013 [4 favorites]

The main thing that is stunty is that she is phrasing a critique in the form of a question. I think she really knows that trials just haven't happened, and her point on leverage is excellent -- that banks *should* be put on trial, that it is ridiculous to fine a bank out of the profits that they make breaking the law.

I'm not sure if this was a result of procedure -- that this was really meant to be the kind of session where the regulators were supposed to have been questioned rather than told, "We're not happy with what you're doing." even though of course this is probably effectively what a lot of these sessions add up to.

And of course if you look at how the first response comes, it's clear that under his answer he's communicating, "I'm not really willing to address the point that you've made. I'm going to focus on terminology and processes rather than address the larger issue of whether or not we exert sufficient power as a regulatory body." I liked the second response in so far as she acknowledged the limitations she had in place and seemed open to further discussion.

In an ideal world, it might have been better if Warren could have said something along the lines of,

It seems to me that you consistently settle with banks rather than bring them to trial. In fact I'm not aware of the last time you brought a large Wall Street bank to trial. This is really problematic for me because without the threat of trial there really won't be any incentive for banks to follow the laws, especially when the terms of settlement mean that the profits they can get by breaking the law exceed the cost of the fines. So I guess my question is what can we do, Congress and regulators, to ensure that going forward we actually see more and more cases go to trial. And what can we do to ensure that the punishments that banks face for illegal behaviors *exceed* the potential profits. Otherwise there's no effective disincentive here.

Her later point -- that DAs seem perfectly willing to make an example of ordinary citizens -- is pretty interesting because I think actually it's the most disenfranchised that are prone to settle because they don't have access to good counsel. So they end up serving much longer sentences than individuals who have the resources to go to trial. The difference is that big banks know that they have a lot more power in this relationship, and so can absolutely do something like hold out for a better settlement offer in the way that your average low-level drug dealer can't.

My hunch would be that these regulatory bodies really aren't interested in trials at all and avoid them if at all possible. For them it's much easier to regard these interactions with large banks as almost a kind of financial or legal transaction. Not only can trials be costly and so on, but the benefit of settlements is you can just look up the infraction in a book somewhere, apply some sort of metric, and spit out a number that equals the number of dollars the bank has to pay. This is a much easier task than doing the necessary research, establishing a case, making the necessary arguments before a court, and then waiting on a decision.
posted by Deathalicious at 10:03 AM on February 20, 2013

Not that it would ever happen, but as long as we're talking "magic wands" here, I'd love to see an independent Elizabeth Warren/Colin Powell ticket. I'd totally "throw my vote away" on that.
posted by wolfdreams01 at 10:49 AM on February 20, 2013 [1 favorite]

Just to be a killjoy (since I thought about this the other day and checked the numbers):

It might be offset by women's longer life expectancy but we've only had 2 presidents take office when they were as old as Warren will be in 2016. She will be 67 (as a sidenote Hilary Clinton will be 69). Only Reagan and Harrison were older and Harrison died a month into his term.
posted by Wretch729 at 8:50 AM on February 21, 2013

If a discussion of the hearing on CNN had devoted this much attention to the question of "was this a stunt?", this thread would be full of complaints about the idiotic media, and how easily they're distracted from the real issues into talking about some insubstantial fluff.
posted by logopetria at 1:22 AM on February 22, 2013 [2 favorites]

Senator Warren: Why Isn’t Wall Street Paying Back Taxpayers For Being ‘Too Big To Fail’?
posted by homunculus at 11:23 AM on February 27, 2013 [1 favorite]

Jamie Dimon Dong-Slaps Inquisitive Analyst in Hilarious Exchange
posted by homunculus at 6:10 PM on February 27, 2013

From homunculus's latest link:

"And the 'That's why I'm richer than you' line is a perfect example of how these guys think. Question: You say two plus two is six, but sir, isn't it really four? Answer: No, because I have a huge cock. [Unzips.] [Raucous laughter.] That's really the level these guys think at. If Dimon was reading this joke right now, he wouldn't even be offended, he'd be flattered, that's how fucking stupid these people are."

The key words in that joke are "raucous laughter." I'm assuming Question and Answer are in a group with Statement, Interjection, et cetera.
posted by Rustic Etruscan at 6:24 PM on February 27, 2013

Fallout from 'Untouchables' Documentary: Another Wall Street Whistleblower Gets Reamed

Previously.
posted by homunculus at 12:30 PM on March 7, 2013

Warren: Drug possession warrants jail time but laundering cartel money doesn’t?
posted by homunculus at 11:40 PM on March 7, 2013

And The Banks Get Off Easy
posted by homunculus at 2:05 PM on March 13, 2013