Bank Lawyer's Blog

Waters Attacked By Sudden Fit Of Reason

This past weekend, The New York Times set out to rehabilitate in the minds of community bankers the image of a woman whose performance in a congressional hearing was once described by The Atlantic's Megan McArdle as "like watching your crazy aunt challenge your boyfriend to prove that fairies aren't real." That's right, you guessed it: Maxine Waters.

The reporter describes a meeting between Mad Max(ine) and community bankers in her district in which Rep. Waters was feeling the pain of the bankers like she was channeling the mojo of William Jefferson Clinton.

“We’ve heard they chase down silly stuff,” Ms. Waters said, referring to regulators and shaking her head in disapproval. “I’m willing to take a hit” to help lower the capital requirements, she said. She even suggested the bankers hire new lobbyists to better represent them. “Influence us,” Ms. Waters said softly, reminding them of her new role as the ranking Democrat on the House Financial Services Committee. “Help us understand the intricacies of your business.”

[...]

As for Dodd-Frank, Ms. Waters said she stood ready to defend the law, but also instructed the bankers to compile a “laundry list” of their concerns. “I don’t want you to look at this as being impossible to tweak,” she said.

After an hour of swiveling nervously in their chairs, the bankers broke into grins. One executive slapped Ms. Waters a high-five. Another embraced her.

“You’ve softened,” Paul C. Hudson, the chairman of Broadway Federal Bank, teased Ms. Waters. “I love the new Maxine.”

What's up with this? Is it simply when Attila The Hun decides to ease up and only lop off the heads of the aged and infirm and spare the able-bodied, the populace reacts with an exaggerated feeling of appreciation born of a profound sense of relief, or is there something more going on here? If you need an objective analysis of a liberal icon, what better source to turn to than the notoriously fair and balanced Pravda New York Times?

The Times claims that in large part her "softening" not only toward community bankers, but toward some of the Wall Street big bankers she used to grill like burgers on a George Foreman 144-incher, is a result of her elevation to the position of ranking Democrat on the House Financial Services Committee, now that Barney Frank has retired. You'd think that circumstance might have the opposite effect: making her feel the need to out-Barney Barney in poking sticks in the eyes of bankers everywhere. After all, the opposition, which controls the committee, is traditionally a lot more pro-banker than is Ms. Waters. She might just as likely feel compelled to carry an even bigger torch for the anti-banker crowd.

The Times posits some theories.

A softer touch with the nation’s biggest banks could allow her to score points — and campaign donations — from an industry unhappy with her previous approach. And being more willing to compromise could also afford her new credibility on Capitol Hill to press her central focus — the cause of consumers.

Or maybe, as she ages, she's found that being a 24/7/365 whirling dervish of a whack job simply taxes her psyche and physique beyond human endurance.

On the down side, Ms. Waters' new-found reasonableness carries the risk of blow-back from the usual suspects.

“She should be shoring up regulators’ spines, not clipping their wings,” said Jeff Connaughton, a former lobbyist and Congressional staff member who recently wrote a book entitled “The Payoff: Why Wall Street Always Wins.” Bartlett Naylor, a policy advocate at Public Citizen, a consumer rights group, called the derivatives letter [in which Waters urged the CFTC to delay derivatives trading rules for six months] “troubling,” adding that Ms. Waters “needn’t add her voice to the cacophony from antireform Wall Street apologists.”

Yes, that's right: if you're not adhering to the politically correct ideological line, you're obviously in desperate need of internment in a re-education camp. We get it.

Finally, however, the reporter begins to get to the nub.

The ranking member on the Financial Services Committee typically takes in millions in donations from the financial services industry. As of now, Ms. Waters has received few dollars from the banking industry. Other than a recent $2,500 donation from Goldman Sachs’s political action committee, her coffers are largely stocked with money from unions and other liberal causes.

I suppose the risk of alienating donations from consumer advocates is not so large when one considers how much more scratch Wall Street can cough up. $2,500 wouldn't cover coffee and a danish at Norma's, so you know that the Goldman Sachs of the world have a lot more largesse to spread on Maxine if she just continues to "listen to reason."

This may or may not be a trend. This may or may not be real. Whatever it is, it's entertaining.

The CU-Bank War Is Getting Ugly

Crying "The Time Is Right To Tax," commercial bankers are upping the thermostat on state and federal regulators to "level the playing field" by eliminating the tax exempt status of credit unions. According to the ABA Banking Journal, in a recent panel discussion at the American Bankers Association's 2013 Government Relations Summit, bankers of all stripes, including a CEO of a bank that was once a credit union, took the position that in this time when Congress and just about every state legislature is looking for ways to raise revenues without raising tax rates, the opportunity exists to convince legislators that tax exempt status for the credit union industry is an idea whose time has passed.

Panel member Ken Kies, managing director of the Federal Policy Group lobbying consultancy, spent years in Washington tax-writing roles, and believes banks could pursue a change.

"Frankly," said Kies, who's working with ABA, "I'm not sure that the environment has ever been better than it is today."

Kies indicated that no one should think that "not taxed" means "never to be taxed." History has not only seen many attempts to subject tax-exempt organizations to federal tax, but success in those attempts. Today's congressional urge towards tax reform, even on a revenue-neutral basis, could be the factor that pushes credit union taxation into reality.

In 1986, tax legislation pulled Blue Cross and Blue Shield organizations under the tax umbrella, reflected Kies. And a year later, the TIAA/CREF benefits organization likewise got shifted. And savings institutions lost their tax-favored status decades ago, and remain a viable part of the financial services business.

Mr. Kies also mentions the fact that there's a trillion dollar federal deficit that makes this the best time to press the case. However, he does not mention by how much that deficit would be reduced by taxing credit unions, which ought to show up somewhere in the argument if it's to survive counter attacks. 

Meanwhile, In Illinois, the hate-fest between banks and credit unions rages on.

Linda Koch, CEO of the Illinois Bankers Association, wrote an op-ed piece for The State-Journal Register in that state's capitol city, in which she sang the same tune as the ABA panelists.

She took the additional step of citing the CBO to the effect that CU tax exemption costs the federal government $2 billion a year in "lost revenue" and the state of Illinois $25 million. I don 't know what the state of Illinois's budget deficit is, but I do know that $2 billion in additional tax revenue is a drop from an eye dropper in a Pacific ocean of federal spending that, according to the Heritage Foundation, reached $3.6 trillion in 2012 and is expected to reach $5.5 trillion by 2022. To me, contributing such relatively small amounts to the black hole of government spending is an argument that lacks weight. I'd prefer that banks stick to the fact that if credit unions want to be "more like banks" (in other words, make commercial loans), they can pay the same freight that goes with that business model, including income taxes. You want to waddle, quack, and fly like a duck, but be pampered like a golden goose. Sorry, leveling the playing field on the powers side ought to come with a leveling of the playing field on the taxation side. Otherwise, you really are gaining an unfair competitive advantage.

The CEO of the Illinois Credit Union League, Dan Plauda, responded to Ms. Koch with the argument that tax revenues from credit unions in Illinois won't solve Illinois' revenue shortfalls. That's most likely very true. However, he also alleges that taxing credit unions will hurt their members, who rely on deposit rates that are much higher than banks pay and consumer loan rates that are much lower than those charged by banks. To me, that makes the banks' case, that tax exemption gives credit unions an unfair competitive advantage on the same deposits and loans that banks fight for. It seems to weaken the case for credit unions to intrude further into the commercial banks' sacred ground of commercial lending.

Mr. Plauda talks about how credit unions are member owned, "democratically controlled," and manned by volunteers. He also alleges that all "excess revenues" are plowed back into the credit union. By "excess revenues, he means what would otherwise be deemed "profits." I started out my career as a bank lawyer in-house for a large mutual savings bank. The only practical difference between a stock-owned commercial bank and a member-owned mutual is that, by soliciting proxies from members who don't give a rip about anything other than services and rates, management of a mutual is, in many cases, able to "rest easy" from all those pesky shareholders who demand the distribution of "profits" either in the form of higher stock prices, dividends, or both. At the same time, there's not exactly a lot of oversight on salaries and cash bonuses that are deducted from gross revenues before the "excess revenues" are calculated.

Mr. Plauda finished his piece with a flourish.

This “people helping people” approach to financial services helps explain why credit unions have become so popular in recent years. As new bank fees have proliferated, for instance, Americans have moved to credit unions in droves. Last year alone, credit unions nationwide added more than 2 million net new members — the biggest annual net member growth in 15 years.

Today, more than 96 million people belong to credit unions.

If anyone seriously thinks that folks flocked to credit unions because credit union members feel like they are part of a movement of "people helping people," as opposed to the financial incentives of lower loan rates and higher deposit rates, both possible because of CU's tax exempt status, that person needs a reality transplant. It just seems to me that responding to banks' call for the end of credit union tax exempt status by taunting banks with the line "we're stealing your customers by the boxcar-load" is going to make even the densest legislator wake up and smell the coffee, eventually.

Both sides of this debate need to sharpen their arguments. If they're able to do so, that is.

Thanks to a loyal reader from Illinois for links to the Illinois op-ed pieces

A Bad Idea That Refuses To Die

Even though municipalities like San Bernardino have come to their senses and dropped a make-your-investment-banker-rich-quick scheme to seize underwater mortgages from mortgage lenders and wrote down the principal balances, the scheme refuses to completely die. I guess we'll have to use holy water, garlic, mirrors, fire, crucifixes and wooden stakes to stamp it out. In the interim, SIFMA continues to publicly pummel it.

In a recent post on its Pennsylvania + Wall blog, SIFMA's Timothy Cameron reiterates why those municipalities still considering this likely unconstitutional scheme to abandon it.

The proposals being touted target a very narrow slice of homeowners – those that are in private-label MBS and who are current on their existing mortgages, have good credit, and ideally don’t have existing home equity loans or other liens on the property. Those who are behind on their mortgage payments or have poor credit (which is the vast majority of homeowners needing help) will get no relief.

Within the small pool of qualifying homeowners, the proposal, on its face, will substantially undervalue their homes. In one example, the mortgage that investors would get paid $160,000 for is refinanced shortly thereafter for $190,000, with much of the additional $30,000 going to the plan’s backers after costs and a kickback to the municipality are accounted for. This is not fair compensation, since the amount paid is well below the face value of the taken note, and significant profits accrue to private parties.

In addition to the legal issues, the use of eminent domain will also be immensely destructive to U.S. mortgage markets in general and to specific communities using eminent domain, in particular. If the sanctity of the contractual relationship between a borrower and a creditor is undermined by the use of eminent domain, both lenders and investors will be reluctant to provide funding in the future. The result will be a significant contraction of credit availability, particularly in communities that have exercised eminent domain to seize loans. It will be much harder to get a loan: any loans that are granted will likely require much larger down payments, stronger credit scores and higher interest rates to compensate for this new and unprecedented risk. This contraction of credit availability would likely serve to halt any recovery in the municipality’s housing market, and could further depress housing values in the cities using eminent domain.

The last reason may be the most telling. Good luck with the future availability of affordable residential mortgage credit in your soon-to-be dustbowl of a community if you enact this scheme. The investment fund gets wealthy, of course, which is the impetus for this half-baked plan. All to help, but not so much, a narrow slice of the community.

Bad ideas never die. They never seem to fade away, either, unfortunately.

Second-Guessing the Second Guessers

Every once in awhile, the blustering blunderbuss known as Senator Liz ("She-Reams-For-Sport") Warren fires a scattershot salvo that strikes a worthy target. You know, like when Dick Cheney shot a lawyer in the face.

The other day, Princess Rides-Bankers-Like-A-Burro was grilling some representatives of the big-time independent foreclosure review firms at a hearing that only Democrats attended (so you know it wasn't going to be pro-banker) and, as related by Larry Doyle, she struck oil.

Senator Warren: I just want to take a look at the Independent Foreclosure Review Payment Agreement details. I think you’ve probably all seen this one page agreement that lists all of the things that the banks did wrong and then boxes for how many people fall into each category and how much money they’re going to be paid. Is that right? You’ve all seen this? [Panel indicates they have seen it.]

And this was put out – who put this out? I think this is put out by the OCC and Federal Reserve. Is that right? As part of the settlement details. So I just want to ask you about this.

It has some pretty amazing categories here. The first category is about service members who were protected by Federal law whose homes were unlawfully foreclosed. It’s got people who were current on their payments whose homes were foreclosed. It’s got people who were performing all of the requirements under a modification who lost their homes to foreclosure.

And it tells how many people fall into each category and how much money the people in that category will receive. And, it ultimately resolves what will happen to 3,949,896 families.

So the question I have is having resolved this nearly 4 million families, who put the people, the families, into each of these boxes. Is that what your firms did. Mr. Ryan?

Owen Ryan, Partner, Deloitte & Touche LLP: No, Senator, we did not.

Senator Warren: So who put them in.

Ryan: I’m not sure how that schedule is prepared. I saw it for the first time yesterday.

Senator Warren: Mr. Flanagan?

James Flanagan, Leader, U.S. Financial Services Practice, Pricewaterhouse Coopers LLP: Same response. We were not involved in the accumulation of that information.

Senator Warren: Mr. Alt?

Konrad Alt, Managing Director, Promontory Financial Group: Senator, I’ve seen the schedule but I’m not familiar with the basis for its preparation.

Senator Warren: So let me understand this. You ran the independent reviews, right. That’s what you got paid to do. And yet, I presume, the only one left is the banks must have put them in these boxes and you made no independent review of their going into these boxes. You were not asked to do that? Mr. Alt.

Alt: No Senator, we were not asked to do that.

Senator Warren: Mr. Flanagan. 

Flanagan: No we were not.

Senator Warren: Mr. Ryan.

Ryan: We were not Senator.

Senator Warren: So that leaves us with the banks that broke the law were then the banks that decided how many people lost their homes because of their lawbreaking. And, as a result, how many people would collect money in each of these categories. Is that right Mr. Alt?

Alt: Senator, I’m not familiar with the basis for the scheduling. 

Senator Warren: So far as you know, there’s no independent review of the banks’ analysis…you looked at 100,000 cases and the banks have now put 4 million people into categories and resolved finally how much they will get from this review by the OCC and the Federal Reserve.

Sweet!

As Mr. Doyle put it, "Bang up job on behalf of the American taxpayer from these individuals and their firms charged with an independent review of this settlement process. NOT!!"

But here's a word in defense of the consulting firms: when Mr. Alt said that it wasn't in the scope of their duties, he was not kidding. As one of my readers, a bank lawyer, advised me, the entire review process was FUBAR from the get-go.

I saw it up close and it was an absolute Rube Goldberg process with the scope, criteria and objectives changing constantly. Regulatory example 1001 of do as I say, not as I do.

It's always easy to use 20/20 hindsight to bash people, of course. However, since the regulators love to do it to bankers, I guess turnabout is fair play.

Time Out

Thankfully for me (and for the haters of this blog), I'm on vacation this week and intend to devote more attention to Jack Daniels Black, Hennesy XO, and the blackjack tables at The Bellagio, than to anything related to banks or to law. However, to send you off into the hiatus with a bang rather than a whimper, with the side benefit of irritating my progressive friends, I'll leave you with a link to a post from my friend Emily Zanotti Skyles' Naked DC blog about one of our favorite topics. Here's an excerpt:

Elizabeth Warren is for many things. Unrealistic bank prosecutions that the administration has no intention of following up on. State and Federal minimum wages that only large corporations can afford to pay, thus ensuring that Wal-Mart corners the market of unskilled laborers and college drop-outs. Expansion of collegiate affirmative action programs to include white females who claim to be Native American so as to take advantage of the increased hiring rates.

You get the drift.

Enjoy.

Republicans to Cordray: We Like You But We're Still Going to Kill You

Friends and colleagues from Ohio, including some bank regulators, have been beating me about the head and shoulders (with wet noodles, but it's still annoying) for the past couple of years about how I'm too tough on Recess Richie Cordray. They tell me he's a smart guy (no debate from me) and, more critically, a reasonable guy, who isn't going to push an ideological agenda to the point that certain other "committed" (unnamed) alternative Directors might be eager to do. As the crowning argument, they all point out that he's never claimed to be the "real" Last of the Mohicans.

Now that even die-hard opponents of the CFPB have blown air kisses to the Director, maintaining utter snarkery towards Cordray has become nearly impossible. Thus, I'll concede that the man is no Tin Lizzie.

[Lightning Bolt Sheers Sky Over North Texas]

Whew, that was close.

At this point, however, the fact that some influential Republicans think that Cordray is doing a good job as Director of the CFPB seems to be irrelevant to Cordray's future as head of the Bureau. Those same Republicans still want to drive a stake through the heart of the CFPB or, failing that, hobble it to the point that they can reduce its potential for "mischief" (as they define it). Cherokee Princess "She-Who-Bites-Ankles" would describe their desire as being one that seeks to turn a stallion into a gelding, but why quibble over the finer points? Republican Senators have stated that they will continue to block confirmation Cordray's appointment as Director until "structural changes" are made to the Bureau. The Obama administration currently predicts that it will agree to such changes on the day that Megan Fox stars as Ophelia in the next film version of "Hamlet" directed by Kenneth Branagh.

Given the ongoing litigation concerning Cordray's recess appointment, and the potential uncertainty over the effect of the recent D.C. Circuit Court of Appeals decision on Obama's NLRB recess appointments on the legitimacy of Cordray's recess appointment, this drama has a long way to go before it's played out. In the interim, however, even CFPB's opponents admit that Recess Richie is a good egg.

For all the good that will do him.

Some Mighty Small Shoes To Fill

Maxine Waters gave her first interview (paid subscritption required) since assuming the chair of the House Financial Services Committee and spilled the beans on who she intends to model her behavior as chair person: Barney ("I Love You, You Love Me") Frank.

Waters contends that she's up to the challenge, saying she learned a lot from watching the Massachusetts Democrat work and plans to follow in his footsteps — including defending the financial reform bill that bears his name.

"Barney Frank has led us to understand that which we have to fight for," said Waters. "The basic idea of Dodd-Frank and what it will do for the financial services industry and the consumers of this country is what we really have to stand up for."

Barney "has led us to understand that which we have to fight for." Grammatically awkward, no? That which we have to fight for is apparently 2300 pages of goo.

Barney has taught Maxine more than the critical importance of the monstrosity legislation that bears (part of) his name. He's also taught her that unlike a good burger, the sausage made by Congress is not discovered at any old In-N-Out.

"You have to put in a lot of time. You're going to have to read, you're going to have to listen. It becomes a real part of your life. It's not like many issues of Congress where you can get in and out."

Yes, unlike most issues, where members of Congress phone it in and sort of understand a little bit about the surface portion of a sound bite of issues of critical importance to the future of this nation, on banking matters, you've got to pay attention for at least five minutes at a stretch before you start thinking about sex. It takes some time for Congress to screw up the banking business as badly as bankers screw it up, so you've got to pay your dues. Apparently, up to now, Maxine, as merely one member of the committee but not its chair, has been doing her nails and reading Marvel comics instead of reading and listening. From here on in, that's all going to have to wait until the 9:45 am coffee break.

Sure, Maxine might have started off a little behind the curve.

Waters acknowledges that she joined the committee with "not a lot of knowledge," except what she had picked up in the state legislature, where she led efforts to divest state pension funds from companies doing business in South Africa.

Yeah, that subject might not have been the best primer for banking law. Nevertheless, she's learned a thing or two since her rookie year. Like how to derail an ethics investigation into your alleged pressuring of federal regulators to give some TARP to a bank in which your husband owns stock. In addition, she learned the hard way about the difference between "socializing" and "nationalizing" in the course of threatening oil company executives who had the temerity to point out that prices rise when demand is high and supply is limited.

You can't make this stuff up. Luckily, for the next four years, I won't have to. Rep. Waters will be the gift that keeps on giving.

Memories, Like The Corners Of My Mind

Yesterday's post prompted a couple of quick responses from regular readers. One asked me if I had noticed who applauded Senator Chingachgook's question about taking big banks to trial. I had not noticed. My correspondent alleged that they were wearing NACA logos on their shirts. That explained much.

NACA is one of the non-profit organizations that was a prime player in the DAP debacle, which cost HUD a bundle of loot due to the fact that the percentage of borrowers under that program who defaulted on their loans far exceeded the percentage of borrowers who did not participate in the program. NACA also tried to convince various legislatures to enact foreclosure moratoriums, alleging that they were aghast that mortgage servicers were handling foreclosures in-house (The horror! The horror!). Finally, NACA was also one of the pre-Occupy-This-Or-That activist organizations that staged mock foreclosures at the homes of bank executives, prompting me to suggest that the way to combat those non-legal foreclosures might be with extra-legal firepower. As usual, cooler heads prevailed.

Of course the applause came from NACAites. Liz is their kind of pol.

Another reader reminded me that Senator Magua's habit of dramatic overstatement and misdirection was highlighted by me before the CFPB was even a gleam in the eye of either Dodd or Frank. That post featured the fevered dream of then-blogger Lie-awatha that national banks who were loan servicers were trying to preempt all state foreclosure laws. I think she might have thought that what national banks wanted more than life itself was to be able to move a battalion of dozers through poor neighborhoods with impunity, crushing homes like piles of matchsticks, just because they're all evil and that's what evildoers do. I'd forgotten about that post, but my elephant-minded reader had filed it away in his mental chest of fond memories.

I'm pleased that some readers pay more attention to what I write than I do. It saves time and effort to be resupplied in a timely fashion by others when the snark train needs another shovel-full of coal to keep steam in the boiler.

Full speed ahead.

Missing The Mark

In her attempt to grandstand at a Senate Banking Committee hearing last Thursday, Liz Warren screwed up the chance to make a valid point. The freshman Senator and veteran ideologue tried to beat up the federal banking regulators who were arrayed before the committee over their supposed reluctance "to take Wall Street banks to trial." You can watch her performance in the linked video, starting at approximately the 1 hour, 34 minute mark.

Although her opening question as to how tough the regulators were was never actually answered, I'm surprised that not one of the regulators answered "Tough enough to take anything a punk like you can throw at me without blinking, Running Joke." Instead, when she followed up by asking when was the last time any of the regulatory agencies took a Wall Street bank to trial, the least likely of all contenders stepped into the ring and counterpunched with a deft lesson in basic administrative law that sailed over the head of She Will Sioux (and over the heads of those droolers who applauded her).

Curry's point was that the OCC doesn't need to sue because it twists arms effectively enough in almost all cases to achieve its supervisory goals through consent orders, without commencing litigation. Warren's follow up, to the effect that she knows that the OCC doesn't have to bring banks to trial but when was the last time it brought a bank to (an unnecessary?) trial, caused Curry to again state that it doesn't have to sue banks (actually, commence an administrative enforcement action) to achieve its supervisory goals. Liz moved on to her next victim, who needed to check her facts and get back to the Senator at a later date.

Liz then got to the impetus for her initial inquiry, and it turns out to be a valid point that was made, unfortunately, before the wrong audience. She claimed that US attorneys throughout the country were taking "ordinary citizens" to trial all the time and "squeezing them" (and not like your main squeeze squeezes you, either), but were not taking Wall Street banks to trial. There's a case to be made that she's right about that. If there had been an actual US Attorney on the panel before her, that point would have been telling. Instead, those testifying were FEDERAL BANKING REGULATORS. THEY CAN'T BRING CRIMINAL CHARGES AGAINST ANYONE, LIZZIE. ONLY A US ATTORNEY CAN DO THAT AT THE FEDERAL LEVEL!

Sorry to monetarily channel the spirit of the late Sam Kinison, but Liz was a celebrated (for her "diversity") member of the Harvard Law School faculty, who made her bones by taking shots at banks, and who also birthed the concept of the CFPB. God forbid she should actually understand that when you're chapped at federal officials for not bringing big banks and bankers to trial on criminal charges, the federal officials you want in the room are those who have the power to bring people to trial on criminal charges.

If Liz actually knew something about the subject matter at hand (which would have made her unique among her compatriots in the US Senate), she might have realized that Comptroller Curry's agency could be criticized for persecuting the little guys, while being strangely passive with respect to some Masters of the Universe. At least, you seldom, if ever, hear about the "hot pursuit" by the OCC of executives at Chase, Bank of America, or Wells Fargo. 

Some of you may remember Patrick Adams, the former bank president who fought the OCC to clear his name and who was backed by a federal administrative law judge, who recommended that all charges against him be dismissed by the Comptroller of the Currency. Instead of dropping the case, rumor has it that the OCC has objected to the ALJ's decision and has urged the Comptroller not to follow the recommendation of the ALJ. Had she been aware of what is actually what, Ms. Warren might have asked the Comptroller why the OCC fights to the bitter end to pursue charges against folks like Mr. Adams, and whether it also aggressively pursues Wall Street bankers with the same zeal. She might have asked Curry to name the last time the OCC tried to overturn an ALJ's recommendation to drop charges against a Wall Street banker. Curry would have suffered instant aphasia, but it would have been a useful line of questioning to those of us who understand the difference between a criminal trial and a civil administrative enforcement proceeding.

But, no, Liz played to the cheap seats, including her acolytes in the trade press, and got her round of cheap applause from her targeted audience.

The Eye Of The Beholder

BLB favorite Lizzie Warren may be only 1/32nd Cherokee, but she's 100% certain that she can judge right from wrong, and she held a press conference today to tell the world that Republican senators are "fundamentally wrong" to oppose Recess Richie Cordray's nomination as Czar Director of the CFPB.

At a news conference today on Capitol Hill, Warren — who as a White House official designed the bureau in 2010 — said that Cordray has “done a great job’’ at the agency since last year when President Barack Obama used a recess appointment to install the former Ohio attorney general as director.

“Rich has proven what he can do,’’ Warren told reporters. “This agency has proven what it can do. The agency has been signed into law. And the notion that a minority (of the Senate) can hold up the laws of the United States by using a filibuster on an appointment is fundamentally wrong.’’

[...]

Warren was joined at the news conference by Sen. Sherrod Brown, D-Ohio, who warned about “the precedent this sets in the United States Senate,’’ declaring that if lawmakers do not like an agency they can “refuse to confirm’’ anyone to run it.

The hypocrisy of Warren, Brown, and their ilk would not be so hard to stomach if it weren't for the fact that those two clowns are merely the latest in a long line of hypocrites in both parties on this issue. As Guardian columnist Megan Carpentier, certainly no friend of "The Right," pointed out a couple of years ago, when the Republicans controlled the Senate, the Democrats repeatedly used the filibuster to thwart Republican appointments, and Republicans made the same bombastic allegations regarding the nefarious effects of the filibuster and the need for "the nuclear option" (eliminating the right to filibuster). The tables are now turned and so are the positions of the parties. Carpentier also pointed out how the Republicans and Democrats resolved the earlier filibuster logjam: they compromised by selecting more moderate candidates. Today, apparently there's no desire to seek "moderation," just to wage complete ideological warfare to the bitter end. Neither side is without blame.

She may be a "newbie," but in an environment where intellectual dishonesty is the hallmark of success, you can rest assured that Liz is destined to rise to the top, in the way that cream always rises to the top. Or, as anyone who's ever seen a stagnant pond can attest, other stuff.