David Coates

The Twenty Reports of Elizabeth Warren

Reports have circulated widely this week about unease in senior administration and Democratic Party circles – unease about the possibility of Elizabeth Warren heading the new Consumer Financial Protection Agency. Senator Chris Dodd has wondered publicly and aloud about her confirmability by the Senate;[1] and Treasury Secretary Timothy Geitner, when given an opportunity to support her possible nomination, visibly declined to take it. He chose to name instead other suitable candidates.[2]

So why is the possible appointment of Elizabeth Warren to head the agency whose creation she championed now causing such waves? What unwritten codes might Elizabeth Warren inadvertently have broken?

Could it be that the Obama administration privately subscribes to the new and untested rule that you should never appoint anyone to head an agency which they were the first to propose? Or is it that the White House privately subscribes to the old and very well-tested rule that sensible administrations only appoint to senior positions in any regulatory institution that oversees Goldman Sachs, people whose resume actually includes working for Goldman Sachs![3] Or is it simply that Elizabeth Warren keeps writing reports, and that the Obama administration has an aversion to reports?

Elizabeth Warren certainly keeps writing reports.

As chair of the Congressional panel charged with the oversight of the use of TARP money, she and her colleagues have so far produced 20 reports – one a month indeed since the Panel began its work at the end of 2008.[4]

I thought there might be value in examining those reports – particularly the recent ones – the ones reporting on TARP in full flow. Perhaps Elizabeth Warren keeps writing and saying things there that are too controversial for leading Democrats or that are a matter of concern to Secretary Geitner. Perhaps she keeps speaking out of turn!

It may be so: for what she and the reports have regularly said, broadly speaking, is that the administration has not used, and is not using, TARP money as effectively as it might. Elizabeth Warren has become, and remains, a thorn in the side of those in the administration who favor a softly-softly approach to the regulation of financial institutions and the deployment of public funds.  She concedes that TARP saved us from an even deeper recession, but she presses continually for a fuller use of that money now to move us more quickly out of the recession from which TARP did not rescue us. Thank goodness for Elizabeth Warren.

  • Take for example the December 2009 report Taking Stock: What has the Troubled Asset Relief Program Achieved? According to the Congressional Oversight Panel, TARP had definitely helped avert a deeper crisis – Elizabeth Warren called that the good news – but in doing so it had also created an implicit guarantee of bailout for big financial institutions, a guarantee that might yet encourage them to riskier actions still. In her video introduction to this report, Elizabeth Warren spoke of her great concern that the ultimate destination of so much taxpayer money remained unknown: and that “the availability of credit, the lifeblood of the economy, remains low…bank failures continue at a nearly unprecedented rate…toxic assets remain on the balance sheets of many large banks…the foreclosure crisis continues to grow…job losses continue to grow.”  “Treasury transparency and accountability,”[5]as the report put it, remain in short supply.
  • Or the April 2010 report Evaluating Progress on TARP Foreclosure Mitigation Programs. This was the widely-publicized report that praised the Treasury for picking up some of the Panel’s earlier suggestions (made in October 2009) on how best to respond to the foreclosure crisis, but still heavily criticized the Treasury for a “response [which] continues to lag well behind the pace of the crisis.” Unimpressed by what one panel member called the administration’s “tepid performance”, the report raised “concerns about the timeliness of Treasury’s response to the foreclosure crisis, the sustainability of mortgage modifications, and the accountability of Treasury’s foreclosure programs.” As the Panel put it on its website when launching the report, “even when HAMP[6] is fully operational”, its assistance “will not reach the overwhelming majority of homeowners in trouble.”[7]
  • Or the latest report, Small Banks in the Capital Purchase Program, which noted the heavy concentration of TARP’s $205 billion Capital Purchase Program on 17 of the 19 largest banks. Large banks absorbed 81% of the funds, with the rest going to only 690 of the nation’s 7,891 small banks. These smaller banks, the report concluded, “experienced a much longer and more stringent evaluation, and many are now struggling to meet their obligations to the taxpayers”; and because they are, “their lending to customers – especially to small business – will remain constricted and will have a dampening effect on any economic recovery.”As Elizabeth Warren put it in her video introduction to the report, “after close examination, our panel concluded that the [capital purchase] program served Wall Street much better than anyone else.[8]

Then, of course, there is the small additional matter of those four Congressional hearings – moments when Treasury Secretary Geitner and Chairwoman Warren sparred in public on the adequacy of the Treasury’s implementation of its responsibilities under the Emergency Economic Stabilization Act. The spirit of those exchanges was well captured in this PBS interview of Elizabeth Warren by PBS’s Judy Woodruff, referencing the June 22, 2010 grilling of the Treasury Secretary by the Oversight Panel.

JUDY WOODRUFF: Well, let me ask you about the home mortgage foreclosures. You had a very animated exchange with the secretary over that question.


JUDY WOODRUFF: He says the success, as we heard him say, can be measured family by family, that it was never intended to help everybody.

ELIZABETH WARREN: Well, you know, no one disputes that. Of course it was never intended to help everybody. But it was intended to help somebody. The problem we have got — let me put it this way. This is a program that is saving a tiny number of people, ultimately, by getting them into affordable mortgages that the estimates are they will be able to sustain over time. And for every one of those families that goes in, there are many, many more families who never make it. And the kinds of numbers we’re looking at, we’re looking at mortgage foreclosures that stay well over a million families this year, next year, the year after that, the year after that. That has implications, not only for those families, but for the financial institutions that are holding those mortgages, for the construction industry, for our overall economy. We have a serious problem and a limited amount of time to get ahead of it. HAMP is not getting ahead of it.

JUDY WOODRUFF: And what’s your understanding of why the government — why the administration, why the Treasury Department isn’t doing more?

ELIZABETH WARREN: It is — it’s as if we had a boat that’s taking on gallons of water, and they’re trying to bail it with a teaspoon.[9]

Throughout 2009 and the first half of 2010, Elizabeth Warren’s Congressional Oversight Panel kept saying things that Wall Street insiders presumably did not want to hear. They presumably did not want to know that, in the Panel’s view, in its bailout of AIG “the government [had] failed to exhaust all options before committing $85 billion in taxpayer funds.”  They presumably did not wish to be told that “the rescue of AIG distorted the marketplace by transforming highly risky derivative bets into fully guaranteed payment obligations”: let alone that “throughout its rescue of AIG, the government [had] failed to address perceived conflicts of interest;” such that “even at this late stage, it remains unclear whether taxpayers will ever be repaid in full” from actions which “continue to have a poisonous effect on the marketplace.”[10] Nor can Geitner, Summers and co. have much enjoyed reading, as they could in the Panel’s March 2010 report, that in using TARP money to bailout GMAC, “Treasury missed opportunities to increase accountability and better protect taxpayers’ money.” “More than a year has elapsed since the government first bailed out GMAC,” the Panel reported in March, “and it is long past time for taxpayers to have a clear view of the road ahead.”[11] The tone of official reports doesn’t often get much sharper than that. Little wonder then that there is no love lost between a Treasury so censored and a Panel so willing to censor.

What does this tell us?

It tells us that Elizabeth Warren has proved over and over again that she will fight for the full implementation of programs designed to promote the health of Main Street, not just that of Wall Street. It tells us that in 2009 she had both the capacity and the courage to turn a small but empowered Oversight Panel into a major watchdog for the interests of ordinary Americans. It tells us that, since she has performed that task once, she can legitimately be expected to do it again.

There is no gain in giving teeth to a watch-dog if the watch-dog will not bite. Elizabeth Warren clearly bites. It is not much fun for those being bitten, but then they shouldn’t have needed biting in the first place. Biting is good when the cause is right. Tim Geitner might not want Elizabeth Warren to head up the Consumer Financial Protection Agency; but the rest of us definitely should.

[1] See Katrina vanden Heuvel, “The Case for Elizabeth Warren”, The Nation, July 20, 2010: available at http://www.thenation.com/blog/37743/case-elizabeth-warren

[2] Dan Fromkin, “Geitner Refuses To Say Whether He’d Be Happy With Warren Leading Consumer Agency”, posted on HuffPost, July 22, 2010: available at http://www.huffingtonpost.com/2010/07/22/geithner-refuses-to-say-w_n_655579.html

[3] The general case is persuasively made by David Sirota, “Unless You’re a Shrill for Banks and Big Business, the Washington Elites Will Call You Controversial”, posted on alternet.org July 23, 2010: available at http://www.alternet.org/economy/147594/unless_you%27re_a_shill_for_banks_and_big_business%2C_the_washington_elites_will_call_you_controversial/

[4] All available at http://cop.senate.gov/reports

[5] The executive summary, from which this is taken, the full report, Elizabeth Warren’s video introduction, and various dissenting notes from panel members, are all available at http://cop.senate.gov/reports/library/report-120909-cop.cfm.

The full 181-paqe report is a remarkable document – both a detailed study of the financial crisis and policy response and a site on which differing views are clearly laid out. The Republican case for ending TARP is laid out at length in an Appendix to the report.

[6] HAMP is the acronym for the foreclosure relief program announced by President Obama in February 2009 (the Home Affordable Modification Program).

[7] The executive summary, from which this is taken, the full report, Elizabeth Warren’s video introduction, and various dissenting notes from panel members, are all available at


The ‘additional views’ section of this report is notably for the clarity of the disagreement (and thus the policy choice) between two panel members: one arguing for a stronger level of support for homeowners in trouble, the better to help the rest of us; the other putting the moral hazard case against the provision of that support in spite of his sympathy for those in trouble.

[8] The executive summary, from which this is taken, the full report, Elizabeth Warren’s video introduction, and various dissenting notes from panel members, are all available at http://cop.senate.gov/reports/library/report-071410-cop.cfm . In her video introduction, Elizabeth Warren began with this observation. “In newspapers and on television you will hear the Troubled Assets Relief Programme  called by its nickname – the Wall Street bailout: and with good reason. TARP pumped hundreds of billions of dollars into Wall Street, in some cases saving huge banks that otherwise would have collapsed. But Congress never intended TARP as a bailout for Wall Street. It was intended to support the whole economy: home prices, retirement savings, and banks in every county in the country.”

[9] The full interview is at


[10] This in the June 2010 report, The AIG Rescue, Its Impact on Markets, and the Government’s Exit Strategy, The executive summary, from which this is taken, and the full report, are available at:


[11] The executive summary, from which this is taken, and the full report, are available at: http://cop.senate.gov/reports/library/report-031110-cop.cfm

David Coates holds the Worrell Chair in Anglo-American Studies at Wake Forest University. He is the author of Answering Back: Liberal Responses to Conservative Arguments, New York: Continuum Books, 2010.

He writes here in a personal capacity.

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