Elizabeth Warren Scares Bankers

By Kevin Roose, New York Magazine

16 February 13

his video of Senator Elizabeth Warren putting the hurt on a bunch of regulators in her first hearing on the Senate Banking Committee is pretty amusing. I'm a big fan of the clip that starts at about 2:30, when Warren asks Tom Curry, who heads a little regulatory agency called the Office of the Comptroller of the Currency, why the OCC hasn't taken more Wall Street banks to trial, rather than settling out of court and getting them to pay a penalty when they break the law, and Curry hems and haws and can't really answer, so he basically goes full Milton from Office Space and then just kind of trails off and sulks.

Even though Wall Street bankers weren't the target of Warren's interrogation yesterday - the regulators who oversee them were - the financial industry is apparently freaking out about the hearing, on the theory that it augurs a tough road for them ahead in dealing with Warren as a senator. Ben White got some quotes from scared financial industry executives who called her performance "shameless grandstanding" and accused her of competing with Ted Cruz for the title of "most extreme fringe freshman senator."

Which raises the question: Are these people kidding?

Elizabeth Warren did not end up in the Senate despite taking a hard-line approach to Wall Street; she was elected almost entirely because of it. I'd wager that people outside Massachusetts who donated money to Warren's campaign or otherwise supported her run for office can't tell you anything about her political platform except that she is tough on Wall Street.

Sure, there was always the possibility that she would mellow out once elected. Keep her head down, be a workhorse instead of a show pony, and all of that. But that was always wishful thinking from the financial industry and its lobbyists. As any web editor with access to traffic stats could tell you, people love when Warren squares off on Wall Street. It delights them, the sight of a bespectacled middle-aged professor absolutely hammering suit-clad financiers, refusing to slip into the numbing jargon of the industry (note, in the video, how she translates Tom Curry's "enforcement actions" back into "settlements," a concept more normal people can immediately understand), and generally being possessed of enough specific industry knowledge that she is impossible to steamroll with technicalities.

Yes, Warren is a populist. Yes, some of her views seem reflexive and could be harmful if implemented. (Charging banks with lots of crimes, for example, would likely have the unintended consumer-unfriendly result of putting a lot of them out of business.) And yes, she sometimes misfires - aiming her wrath at, say, a panel of regulators who can only bring civil suits in the first place, rather than officials in the Justice Department like Lanny Breuer, who could actually have pressed criminal charges against banks but chose not to.

But she is also talking to Wall Street in a way it's not used to hearing from elected officials, and it's making her a rising star in the Democratic Party. Bankers should probably stop griping, and start getting used to it.