Boston Capital

Warren was better choice

By Steven Syre
Globe Columnist / July 19, 2011

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President Obama certainly knows how to talk a woman up as he’s dropping her off at the curb.

The president was effusive in his praise of Elizabeth Warren over the weekend, when it became clear his administration intended to nominate former Ohio attorney general Richard Cordray to lead the new Consumer Financial Protection Bureau that will be up and running this week.

Cordray wasn’t picked so much as Warren was passed over. The Harvard Law School professor who conceived of the consumer watchdog agency from the start, helped shepherd it through Congress as part of the legislation overhauling financial regulation, and then built it from scratch, wanted to run the place. She campaigned hard for the job. But too many people were lined up against her and that’s a shame.

It’s easy to conclude that the president did Warren a favor, removing her from a process that would have been long and fruitless. Another Cambridge academic with good intentions, MIT’s Peter Diamond, went through something just like that when the president nominated him as a Federal Reserve governor. The Nobel Prize winning economist was sent home and told he wasn’t qualified. But the experiences of Warren and Diamond are two different stories.

Warren is many things Republicans don’t like. Most of all, she is virtually the mother of new business regulation in Washington and a de facto lightening rod. She even looks like a librarian set to scold you for an overdue book.

But Warren is also a relentless and articulate advocate for average consumers. Among Obama administration insiders who work on financial issues, she is one of the few (along with FDIC chief Sheila Bair) who do not reflexively side with bankers. These are all fine qualities in my book and seem like qualifications to head a consumer protection bureau.

That watchdog agency was and remains a worthwhile idea. It has endured years of attacks from bankers motivated by money and Republicans moved by ideology. But the basic premise of protecting consumers from real abuses is hard to refute.

Perhaps the Cordray selection is part of some larger strategy, setting Warren up to run for the US Senate against Scott Brown next year. Some Democrats in Washington like that plan on paper. Real life here in Massachusetts may disappoint them.

The president would have done better simply by nominating Warren to run the national consumer agency she invented. He should have done exactly that months ago, instead of naming Warren as an assistant to the president and a special adviser to Treasury Secretary Timothy Geithner. What did that accomplish?

It’s really not important that she would have never been confirmed by the Senate because Cordray - an aggressive consumer advocate in his own right - won’t be approved, either. I’m not sure who could win confirmation for that job today.

As the nominee, Warren would have been in a position to continue to defend the agency she invented in the earliest months of its existence. She could speak to consumer issues and people would listen. How many people will pay attention when she is writing and speaking from Cambridge at the start of the fall semester?

It is a thankless job stumping for the agency you will probably never run. But Warren has been nothing if not a tireless advocate and true believer. She also appears to have thick skin, which helps.

Remaining in the Washington spotlight, Warren could have done more than anyone to help defend the agency from persistent attacks on its authority and funding. Critics would still like to eliminate the director’s job entirely, handing bureau authority instead to a commission that would presumably do much less, if anything.

The president would have helped himself by nominating Warren, too. Standing up for consumers by nominating an able watchdog chief opposed by a wall of bankers is a good political alternative to what the president actually did - choosing someone else in an apparent concession.

“This agency was Elizabeth’s idea and, through sheer force of will, intelligence, and a bottomless well of energy, she has made and will continue to make a profound and positive difference for our country,’’ Obama said yesterday while he was not nominating Warren to the job.

Elizabeth Warren really does have all those qualities. Too bad they weren’t enough.

Steven Syre is a Globe columnist. He can be reached at