How Do You Solve a Problem Like Gretchen Morgenson? (And Other Thoughts)

Gretchen Morgenson, a New York Times business columnist, has been on her best behavior for so long that I’d nearly forgotten how much of a shameless liar she is. That is, until last week’s meandering column, in which she counted the so-called “toxic twins” — Freddie Mac and Fannie Mae — among the year’s economic woes, right up there with Greece’s potential default and Countrywide’s discriminatory mortgage standards. For Morgenson, even the relentless campaign by Republicans to get government out of the housing market isn’t proceeding rapidly enough. “It looks as if these taxpayer-owned zombies, which did so much damage to our economy, are poised to live on and on,” she writes, peddling the same falsehoods that fellow Times columnists Paul Krugman and Joe Nocera have worked so hard to refute. The “Big Lie,” in a nutshell, is that the 2008 financial crisis was caused not by Wall Street’s shady lending practices or exotic (and ultimately worthless) financial instruments but by Fannie Mae and Freddie Mac, which were forced by the government’s expansive housing policy to make riskier and riskier loans. Because it conveniently lays the blame for the recession at the feet of the government, the Big Lie is a conservative favorite. The problem is, it’s not remotely supported by facts. Morgenson finds it ironic that “Washington’s push to increase homeownership opened the door for companies to sell poisonous and tricky loans that have now imperiled many of the most vulnerable,” yet private lenders were the ones to pioneer these poisonous loans, and made more of them than Fannie or Freddie ever did. Joe Nocera, a colleague of Morgenson’s at the Times who got his start as a business reporter, summed it up quite nicely on Dec. 23 when he stated that conservative scholar Peter Wallison “almost single-handedly created the myth that Fannie Mae and Freddie Mac caused the financial crisis.” Almost, because Wallison had a passel of partners in crime, including the Wall Street Journal editorial page, Congressional Republicans looking for any excuse to attack Fannie and Freddie, and — though he doesn’t mention her — Gretchen Morgenson herself. The Times evidently has a policy against speaking ill of one’s co-workers, as demonstrated by Paul Krugman’s wink-wink-nod criticism of David Brooks’ economic ignorance (“as some pundits have said . . . .”), but Morgenson and her bestselling book Reckless Endangerment are pretty hard to overlook. Reckless Endangerment is the Big Lie writ large — 352 pages large — and has been parroted as gospel by the news media despite an overwhelming consensus by mainstream economists that federal housing policy had almost nothing to do with the financial crisis. The Washington Post named it a “notable non-fiction book for 2011.” USA Today, entranced by Morgenson’s sparkly Pulitzer, repeated the book’s conclusions as if they were fact:

The mortgage crisis started with the “housers” — President Clinton and others who pushed for creative mortgage financing because they believed more Americans should own their own homes. Then quasi-public Fannie Mae and Freddie Mac did away with their traditional underwriting criteria . . . . Then private mortgage execs took cues from Fannie and Freddie and wrote loans for individuals who would not have been deemed creditworthy a few years earlier.

Morgenson could hardly have delivered the GOP a more perfect narrative. Not only were Fannie and Freddie complicit in the mortgage meltdown, but the whole scandal started with Bill Clinton. Could it get any better than this?

But while conservatives like Newt Gingrich (who was all too happy to take $1.6 million from Freddie as a “historian”) and Paul Ryan have latched onto this theory, Morgenson’s government-as-villain narrative has been widely discredited. The Post’s own Barry Ritholz, who coined the phrase “Big Lie,” along with studies by the Federal Reserve and an analysis of subprime mortgages by McClatchy News, have refuted it. In October, the New York Review of Books published an excellent takedown of the book, accusing Morgenson and her co-author of “misleading analysis and over-the-top rhetoric” and tartly observing that “claims that . . . Fannie Mae caused the 2007-2008 crisis by meeting affordable lending goals that were first established and had primary effect in the 1990s are so far-fetched that they require time travel.” Furthermore, “the key point—which is largely missing from Reckless Endangerment —is that private lenders made far riskier loans than GSEs bought or guaranteed, especially during the 1990s, when subprimes issued to borrowers with low income and poor credit were relatively new.”

Given that Morgenson is on record as supporting a scenario that the Times’ own news accounts — not just its editorial board — refute, what happens next? The paper is in an awkward situation; on one hand, Morgenson is a columnist, not a reporter, and her extra-curricular publishing activities are separate from her day job. On the other hand, Morgenson is something of an embarrassment. Her views would not be out of place at the Wall Street Journal or Forbes magazine, where she was once an editor, but they strike a dissonant note at a newspaper that clearly does not believe in the “time travel” required to substantiate a timeline in which Fannie and Freddie blazed the trail of high-risk lending. As the Times’ overview of the two GSEs states, “But as the mortgage market exploded in the middle of the decade, they found themselves losing market share to the more aggressive private lenders, and made a fateful decision to expand their lending to keep up.” Though the paper acknowledges that “the role of Fannie and Freddie in the housing bubble and bust has been hotly debated,” it also points out that the Republican who dissented from the majority conclusion of the Financial Crisis Inquiry Commission included none other than Peter Wallison, the conservative scholar lambasted in Joe Nocera’s “Big Lie” column.

Though the Times has never addressed the situation, I suspect it would defend itself by pointing to the division between its editorial and news pages. Columnists are certainly not expected to toe the newspaper’s editorial line; indeed, the gulf between the paper’s reliably progressive stance and the conservative, traditionalist views of Ross Douhat and David Brooks are on display every week. But it would be disingenuous to suggest that a writer, once elevated to a columnist and given free rein to explore controversial topics, can never be held accountable by his or her employers. There is a limit to free speech even in the halls of a First Amendment defender. To use an extreme example, no newspaper is going to tolerate a columnist preaching the virtues of white supremacy or advocating the return of public executions. Obviously Morgenson is not shilling for the KKK. So the question becomes, at what point does a newspaper censure an op-ed writer? Morgenson’s sin, if indeed the Times considers the “Big Lie” a sin, is apparently minor enough to be ignored. It’s worth noting that there is no indication that the Gray Lady even has a problem with Morgenson. Given that its publishing imprint, Times Books, is responsible for Reckless Endangerment, her editor is hardly likely to raise an eyebrow at a pejorative like “toxic twins.”

Curiously enough for a left-leaning outlet that has provided a platform for Paul Krugman and Joe Nocera to make their case against the Bie Lie, the writers enlisted by the Times to review Morgenson’s book both praise it. Though it is true that the reviews were written in June, before Nocera and other popular bloggers honed in on the deliberateness of the conservative obfuscation surrounding Fannie and Freddie, I nevertheless find it surprising that Robert Reich, a reliably liberal political economist, found so little to criticize in Morgenson’s work. Reich strikes me as someone who keeps up with Paul Krugman’s work, and Krugman has been warning since 2010 about the Republican quest for “a cover story saying that it was all the government’s fault.” Some of Reich’s plaudits are deserved; the book raises valid points — corruption and self-enrichment were rife among the GSE’s top officials —  that readers of any political stripe would deem wrong. But, as Krugman reminds us, “there’s no contradiction between the assertion that F&F were bad institutions run by bad people, and the assertion that they played no important role in creating the financial crisis.”

The problem with Morgenson is that she is more than a vocal columnist. If her role was confined to an opinion writer, the situation would be different. Op-ed pages court controversy by design; newspapers compete with Gawker and the Daily Beast for clicks, and when the Huffington Post can slap up an attention-grabbing headline like “FAIL: Worst Debate Ever!”, it helps to hire bomb-throwers like Charles Krauthammer and Jonah Goldberg. Unlike Goldberg, who rails against the Smithsonian for collecting “some genuine Occupier scat to be preserved next to the alleged specimens from the Yeti and Sasquatch” and regularly deploys invective against “liberals” that verges on hate speech, Morgenson is an awkward reporter-columnist hybrid. Though she is best known for her weekly “Fair Game” column, which is written in first-person and invariably castigates regulators or banks for what she sees as shady practices, her byline also appears on straight news articles. On Dec. 1, her story about the Massachusetts attorney general suing five major mortgage lenders ran in Business Day. With reporter Louise Story, she co-wrote a lengthy Nov. 22 article about an IndyMac executive who blamed federal regulators for pushing him to cover up financial weaknesses. The story reads no differently than any other news piece, but a reader familiar with Morgenson’s anti-GSE philosophy finds himself skeptical of her objectivity.

Bias can manifest itself in a thousand insidious ways; most are not obvious — e.g. “regulators are crooks” — but subtle, surfacing in how a reporter frames the story, which details she chooses to report, and whether she believes a certain subject rises to the level of newsworthiness at all. Would a reporter with less of an axe to grind with the government’s handling of the financial crisis have dedicated four pages to regulatory malfeasance? It’s impossible to know. The story probably received attention from financial publications, but mainstream outlets like the AP and the Washington Post didn’t feature it. When Morgenson writes that “the IndyMac collapse, with its multibillion-dollar cost to the Federal Deposit Insurance Corporation fund, highlights the role played by federal overseers of financial companies in the years leading up to the crisis,” is this a reflection of her low regard for agencies like Fannie and Freddie, which she likewise blames for wasting taxpayer dollars? The tension arises not because Morgenson has an opinion — indeed, it would require a certain degree of naivete to report on the financial crisis without being appalled by its instigators — but because she regularly expresses it in the same pages in which she is expected to be a neutral observer. It is precisely for this reason that most columnists do not write for the news section as well. He or she may be perfectly capable of keeping his personal beliefs out of an article, but even the appearance of mixing opinion and news makes readers wary. Just as elected officials are meant to avoid not only impropriety but the appearance of impropriety, columnists like Thomas Friedman do not moonlight as international correspondents for a reason. Once Friedman tells readers that he is skeptical of the ability of Egypt’s Islamist parties to govern fairly, the objective nature of his reporting from that country would come into question.

Reporters are not automatons, of course, and every human being has his or her own way of seeing the world. Is Morgenson, by telegraphing her own biases through her columns, perhaps being more honest by dispensing with the myth of objectivity? I don’t believe so. True objectivity may be a myth, but is an important myth, and a crucial if unattainable standard. Newspapers do not always practice the even-handed evaluation that they preach, but the fact that they keep trying instills confidence in their readers. When a reporter’s neutrality is questioned — one case at the Times that comes to mind is that of Middle East correspondent, Ethan Bronner, who evidently has family ties to the settler movement and the Israeli military — detractors come out of the woodwork to slam even run-of-the-mill articles as propaganda. It’s unfair, especially considering the Times’ otherwise “anti-Israel” reputation among rightwing pundits, but it’s also distracting and best avoided.

Ultimately, the problem may lie less with the conflict between Morgenson’s book and her reporting and more with the conflict between her two roles at the Times itself. Plenty of reporters write books; just this week, Times reporter Jodi Kantor released The Obamas, which details the first couple’s adjustment to the strains of the presidency. It is not a particularly political account in the sense of approaching its topic from a liberal or conservative perspective, yet it received considerable pushback from the White House, with spokesman Eric Schultz calling it “an overdramatization of old news.” Yet Kantor continues to cover politics for the Times without any noticeable pushback. Though she has made some odd statements to the press about her supposedly “intense” relationship with the Obamas — a claim seemingly undermined by their refusal to be interviewed for the book — I don’t see the tell-all as threatening her career. Readers (and editors) are able to separate a reporter’s daily work from what she writes to win a fat book deal; it is more difficult to see a bright line between opinion and news pieces published in the same media outlet. Books and newspapers are clearly separate media, while a Times article is a Times article, regardless of whether it is technically labeled a column or a news story. All that matters is the byline, and as long as it is Morgenson’s, readers will be skeptical that there is any daylight between her opinion and her facts.

In the end, the problem with Morgenson may not be as unique as it seems, as reporter-subject relationships have grown more incestuous with the arrival of such Fox News commentators-cum-politicians as Sarah Palin and Mike Huckabee. Indeed, the tension between Morgenson’s personal views and professional neutrality likely preceded the publication of Reckless Endangerment. Even if her book had not promoted a widely discredited version of the financial collapse, Morgenson’s dual role at the Times should have raised eyebrows. When she is interviewed on NPR, she is introduced as “an assistant business and financial editor and a columnist for The New York Times” or even just as “Gretchen Morgenson of The New York Times” — technically accurate, but the first description conflates her editorial and reportorial roles, and the second leads the audience to assume she is an average reporter. Obviously Morgenson is entitled to her credentials, but she should be clear that she is speaking as an author and an opinion writer; I doubt she could produce a piece of straight reporting from the Times that attributes the financial crisis to Fannie and Freddie.

It seems fairly straightforward to conclude that Morgenson should not be working both sides of the news-opinion divide. Her value to the Times is as a columnist; the paper does not suffer from a lack of qualified business reporters. Even if Morgenson were limited to her “Fair Game” column, however, the sticky situation of a representative of the Times essentially putting its brand behind a controversial argument persists. The conflict of interest, if one indeed exists, seems to occur less frequently at the Times than at other publications, such as the Washington Post, that have more bombastic and radical opinion-writers. The Times’ stable of columnists is fairly moderate; they differ in philosophy and politics but never venture too far from the mainstream. Yes, David Brooks is conservative, but he is a Mitt Romney conservative, not a libertarian Ron Paul conservative. Only Ross Douhat and Maureen Dowd occasionally veer toward the deliberately inflammatory rhetoric and ad hominem attacks typical of Post columnist George Will, who not only criticizes his opponents but demonizes them. There is a thin line between disapproving of an opponent’s beliefs and claiming that those beliefs make the opponent a bad or evil person, and the Times should be commended for staying on the right side of that line. Enough hate speech and holier-than-thou denunciations are spewed out by talk radio without newspapers jumping into the game. The Post is apparently comfortable with giving its columnists a wide berth to kick the hornet’s nest; Will titled his most recent column “Suddenly, a fun candidate,” then launched into what he presumably considered a “fun” description of the procedure Republicans call “partial-birth” abortion. He writes of “the baby to be killed,” knowing full well that both the word “baby” and the word “killed” are considered propaganda terms by anyone who objects to his anti-choice stance. The paragraph on abortion is ridiculous precisely because it is so obviously intended to provoke; there are plenty of ways to discuss Santorum’s position on abortion without tossing red meat to conservative readers. It is the job of a columnist writing for a mainstream publication to argue a point, but Will is less interested in laying out the argument for his position than in presenting anyone who disagrees as an immoral baby-killer. Pandering to the Republican base is fine for Jonah Goldberg, because he writes for a magazine, the National Review, that caters to the Republican base. The Post’s audience, however, is broader, and Will seems unable to use language that would speak to or attempt to convince that broader audience. Likewise, when Will pretends to understand “liberals” better than they understand themselves — he states that the objective of progressivism is “to weave a web of dependency, increasingly entangling individuals and industries in government supervision” — he merely proves that he probably hasn’t spoken to a real, live progressive since 1980. (As it happens, I’m apparently not the only one who thinks Will is going off the rails. Jonathan Chait at New York Magazine had a post on Jan. 4 titled “George Will Is Actually Kind of a Madman.”)

George Will is an excellent example of everything a columnist for the New York Times is not. Its writers are opinionated but, for the most part, respectful. What gets an editor’s OK at the Post would not pass muster with the Times. For this reason, Morgenson’s deviation — albeit a mild deviation when compared with Will’s bluster — is perhaps a bigger deal at the Times than it would be at another newspaper. I am not suggesting that Morgenson’s minor apostasy presents anywhere near the moral dilemma that bomb-throwing language like Will’s would pose to the Times. I do think, however, it demonstrates what a homogeneous stable of columnists the paper employs. Whether the tendency of Times writers to stay relatively close to the party line is a function of editorial control or self-selection (how many arch-conservatives dream of a job at a liberal rag?), it serves to further highlight the few columnists who do venture beyond the fold.

Will is an instructive comparison for another reason as well: as a climate-change denier, he espouses an anti-fact position akin to Morgenson’s insistence, despite chronological and statistic evidence to the contrary, that Fannie and Freddie precipitated the 2008 financial crisis. That global warming is considered a hoax by a large percentage of conservatives does not make climate-change denial a mainstream position; it simply shows how far to the right the Republican party has shifted. (Denying gravity doesn’t make Isaac Newton wrong; it just makes the deniers ridiculous.) The goal of journalism should be to report facts, not to give equal time to disproportionately viable sides of an argument, though certainly plenty of reporters are guilty of false equivalencies (I’m talking to you, Thomas Friedman). There is a good reason the Times’ science section does not pair every story on evolution with a creationist rebuttal; to do so would be to abandon the ideal of reporting the truth. Frankly, despite the freedom a columnist must be given to express his or her own opinions, the Washington Post should be ashamed to publish George Will’s global-warming-is-a-lie drivel. Reasonable people can disagree on many things, but some stories do not have two sides. Americans still argue over the merits of universal healthcare and correct amount of government regulation, but they do not argue over whether the Earth is round or flat. No newspaper should interpret a columnist’s discretion as a requirement that the paper publish lies. If Will continues to use the Post as a platform for climate-change denial, he should be fired. The question I find myself asking is whether Morgenson’s advocacy of a blame-Fannie narrative is likewise unacceptable. When she uses the pages of the Times to claim that government lending policies created the financial crisis, is that a deal-breaker?

After spending so many words pontificating (and digressing) on Morgenson’s situation, it seems a waste of breath for me to answer in the negative. Yet I have to acknowledge that there is a difference between denying climate change and painting the GSEs as “toxic twins.” There is an overwhelming scientific consensus about global warming, while the culpability of Fannie and Freddie is a more politicized and objective issue. As Paul Krugman points out, the GSEs employed their share of bad apples, and no one denies that their leaders acted inappropriately. Though that’s a long way from single-handedly sparking the 2008 recession, some of Morgenson’s criticism is undoubtedly warranted. If I were her editor, I would be tempted to tell her to tone it down, but perhaps I would be the one in the wrong. Just because Times columnists are not known for stirring up trouble does not mean that a difference of opinion is untenable. It can be unpleasant and embarrassing, as evidenced by the Washington Post, but that doesn’t make it a crime. In the end, Morgenson will probably keep writing her anti-Freddie screeds. The easiest solution, I suppose, is for me to simply stop reading them.

The War on Elizabeth Warren

Whom Are You Calling a Grandmother? (Photo via cnn.com)

UPDATE – 7/15/11: President Obama’s Grow-a-Spine miracle tablets have apparently not worked. Bloomberg News reports that he “has chosen a candidate other than Elizabeth Warren as director of the new Consumer Financial Protection Bureau, according to a person briefed on the matter.” Maybe it just fit with the “Let’s Cave to the GOP” theme of the recent debt ceiling negotiations. Or maybe, as Stephen Colbert suggested the other day, the Republicans have taken America hostage and are holding a gun to its head . . . . Keep it there long enough and perhaps the country will get Stockholm Syndrome.

“Elizabeth Warren, Champion of Consumer Financial Protection” (Businessweek, 7/7/11)

“An Agency Builder, but Not Yet Its Leader” (NYT, 7/4/11)

“Director or No, Wall Street’s Newest Cop Is Ready for Duty” (NYT, 6/20/11)

“The Bank Lobby Steps Up Its Attack on Elizabeth Warren” (The Nation, 6/20/11)

“Blocking Elizabeth Warren” (NYT, 6/10/11)

With July 21, the official debut date of the Consumer Financial Protection Bureau, just around the corner, Elizabeth Warren is getting a lot of press. The bureau is Warren’s brainchild, but though she has dedicated the past year to getting the agency up and running, President Obama has not nominated her as its director. Opposition by Senate Republicans would likely make her confirmation impossible, and the Times reports that “it is conventional wisdom in this town that the first director of the new Consumer Financial Protection Bureau will be anyone but Elizabeth Warren.”

Whether or not Warren is actually named head of the bureau, her part in its creation has ensured her legacy will be indelible. Businessweek devoted its July 7 cover story to the woman it calls the “Champion of Consumer Financial Protection.” The title is unwieldy, but the article makes the case that, regardless of Warren’s political future, she has already been the midwife of lasting change to the banking world.

Media coverage of Warren traffics in cliché, and Drake Bennett’s sharply-written Businessweek profile goes out of its way to puncture such stereotypes. “Warren is a grandma from Oklahoma in roughly the same way Ralph Nader is a pensioner with a thing about cars,” he notes. Indeed, The Times repeatedly makes the grayhair characterization, referring to Warren as “a driven, sometimes blunt 62-year-old grandmother” in much the same way that the cache of bin Laden documents is always a “trove” and the latest dismal job numbers are always a “speed bump” on the road to economic recovery. Bennett is not taken in by the passionate-yet-controlled hand gestures or the intent gravity that reporters typically observe in a Warren interview. He writes that she is prone to expressions like “Holy guacamole!” but adds that “it’s difficult to tell whether these are spontaneous or deliberately deployed to soften her imposing professorial mien.”

Less insightful, however, is Bennett’s celebratory tone. He lauds Warren for her contributions, making her out to be the savior of the banking world. (Sheila Bair, whose serious face graces the cover of this week’s Times Magazine and whose op-ed manifesto was recently published by the Washington Post, might have a thing or two to say about that.) He describes the broad powers the CFPB will assume on July 21: “It will supervise not only banks and credit unions but credit-card companies, mortgage servicers, credit bureaus, debt collectors, payday lenders and check-cashing shops. Dozens of researchers will track trends in the lending market and keep an eye on new products.”

Warren’s accomplishments are myriad; she is “not waiting for permission to do the job she may never get.” In Bennett’s telling, whether Warren receives an official appointment is almost immaterial, as she has already “hired hundreds of people,” including “several top hires from outside the federal government.” When the bureau opens, it will apparently run like clockwork, as “teams of analysts will follow various markets — credit cards, mortgages, student loans — to spot trends and examine new products.” Bennett has a high degree of faith in the agency’s ability to be everything to everyone; his laundry lists of the agency’s many duties support the opinions of Raj Date, Warren’s deputy at the CFPB, whose name has also been floated for the top position. Date’s take on the agency is predictably laudatory. “If the bureau and its market research teams had been in place five years ago,” Bennett paraphrases Date as saying, “they would have spotted evidence of the coming mortgage meltdown and could have coordinated with the bureau’s enforcement division to head it off.” One suspects that such grandiose proclamations were also made at the creation of the SEC and the FDIC (certainly Sheila Bair has laid out similarly lofty goals for her agency), and one only has to consider Lehman Brothers or AIG to see how effective those regulators were in avoiding the crisis of 2008. Granted, the purpose of the CFPB is to step in where the other cops on the block have failed, but anything billed as the be-all-end-all of financial regulation is bound to be oversold.

By burying Warren with praise, Bennett obscures the true challenges facing the CFPB and commits the sin that, just last week, I commended Businessweek for avoiding: He gives the business community a pass. In its examination of Transocean’s complete abrogation of responsibility for the Deepwater Horizon oil spill in the Gulf, the magazine painted a picture of a soulless, mean-spirited corporation that didn’t toe the usual Chamber of Commerce political line. This week, however, Bennett performs a delicate two-step. He pretends to slap the wrists of Warren’s Republican detractors while surreptitiously giving big business a pat on the back.

How does Bennett accomplish this? First, he minimizes the threats to the CFPB (and to the Dodd-Frank legislation as a whole) by overstating Warren’s accomplishments. He devotes a massive, thirteen-line paragraph to what the bureau can do, come July 21, then spends only four lines on what the bureau will not be able to do. It’s a caveat worth mentioning; in fact, it’s one that has been the topic of numerous concerned editorials and articles. Without a director, the CFPB is not completely toothless, but neither is it the long-armed rule-making body that Bennett proclaims it to be.  The Times writes that the lack of leadership will leave the bureau’s powers “muted.” Reporter Ben Protess continues:

Absent a director, the bureau doesn’t have the authority to oversee payday lenders, mortgage brokers and other nonbank lenders, according to an interpretation of the statute by Treasury and Fed inspectors general. Ms. Warren is not even allowed to identify the nonbank financial firms she plans to regulate.

An article in The Nation addresses the very real stumbling blocks that the new agency will face. The Republican-led House Financial Services Committee has passed bills aiming to strip the CFBP of a single director altogether, replacing Warren (or, presumably, a more benign alternative) with a five-person commission. For a party that talks so much about eliminating sprawling bureaucracy, the GOP has sure worked hard to hamstring Warren’s agency by . . . adding bureaucrats. The proposed “bipartisan” commission seems to be modeled on the perpetually-deadlocked FEC, where the conflict between Republican and Democratic commissioners has ground the business of election regulation to a halt. Ari Berman, writing for The Nation, notes that “in a rather stunning bit of hostage taking, forty-four Senate Republicans recently announced they would not approve any nominee for the CFBP unless the GOP proposals were implemented.”

The Nation is certainly not an unbiased news source, and the article devotes a mind-numbing amount of space to the money spent by the financial sector to lobby Washington and line the pockets of Republican politicians (mores specifically, the three Republican politicians who just happened to sponsor the anti-CFPB bills). Surely the millions spent by the banks on lobbyists is a problem, but reeling off the dollar amounts hardly helps the reader to understand the specific threats facing Elizabeth Warren’s brainchild. The money is not the issue; what that money buys is, and by listing campaign contributions, The Nation manages to stoke outrage without linking those contributions to particular dangers.

The crucial pieces of information in Berman’s article are less sensational. Undermining Businessweek’s assertion that the CFBP will have the authority to rein in sketchy banking practices, Berman reveals that, “despite claims about its unlimited power, the CFPB is the only banking regulator whose budget will be capped (for now, at 12 percent of the total Fed budget) and whose rules can be overturned (by a two-thirds vote from the Financial Stability Oversight Council, a new group of top federal economic policy-makers).” The power of the CFPB is hardly as unchecked as Republicans like Rep. Jed Hensarling, who calls the agency “one of the greatest assaults on economic liberty in my lifetime,” have claimed.

The threats to the CFBP are real, and they are vastly larger than Businessweek gives them credit for. On top of the bills passed in the House, Republicans have “tried unsuccessfully to cut the CFPB’s budget earlier this year and succeeded in mandating two audits of the bureau per year.” Berman writes that Warren’s “associates” quote her as describing Republican efforts as an attempt to “pull the arms and the legs off the agency.” And though Bennett asserts that “few Cabinet secretaries can claim to have left as indelible a mark on the departments they lead as Elizabeth Warren has already left on the one she doesn’t,” it is not enough that “Warren has built the CFPB largely to her specs.” It doesn’t matter how the CFPB is constructed or how talented its employees if its budget is eviscerated and its enforcement powers are curtailed. It wasn’t a lack of regulatory agencies that enabled the financial crisis but the toothlessness of the agencies that did exist.

Bennett’s claim that Warren’s development of the CFPB has been “almost entirely free of interference from Congress and the Administration” is patently false. The creation of the CFPB is not finished until it goes live on July 21, and possibly not until it assumes its full powers under a permanent director. The efforts by Republicans, on behalf of the banking industry, constitute nothing if not interference. In The Nation, Berman points out that the lobbying push has been partly successful. So far, the CFPB is “focusing on low-hanging fruit, such as clearer mortgage disclosure forms, that can draw consensus among consumer advocates and industry groups. Everyone agrees the real fights are yet to come, once the CFPB goes live and begins tackling difficult issues like policing scams in the credit and mortgage markets, and cracking down on overdraft lending fees and shady prepaid credit cards.”

This is a sharp contrast from the Businessweek paradigm, in which the CFPB is prepared to spring forth fully formed, Athena-style, from the head of Elizabeth Warren. Businessweek’s willful ignorance of the challenges facing the CFPB is dangerous because it suggests that the battle to police Wall Street has already been won. For the magazine’s wealthy, business-class audience, this is good news. Bennett allows his reader to feel warm and fuzzy about Warren’s success without challenging the status quo. A hard-hitting, take-no-prisoners approach to the topic would surely have alienated a portion of Bennett’s audience, but it would be more honest than the article he produced. He goes beyond simply not demonizing the Republican opposition to the CFPB; in fact, conservatives come off as just another thorn in Warren’s side: irritating, but not life-threatening. Instead of holding the business community’s feet to the fire, pushing Businessweek’s corner-office readers to question their complicity in the anti-CFPB lobbying efforts, Bennett gives them a pass. He doesn’t mention that the Chamber of Commerce, which The Nation reports has “a dozen lobbyists focused on the CFPB alone,” spent $17 million on federal lobbying in the first quarter of 2011. He doesn’t point out that the Chamber’s senior director has admitted that “we’re fundamentally trying to kill this.” He also neglects to list the numerous industry groups, from the American Bankers Association to the National Association of Federal Credit Unions, that have lined up to fight the establishment of Warren’s agency.

Businesspeople are, as the term suggests, people too – and it is not impossible that a few, after learning the true extent of the threats to an agency designed to protect consumers, would emerge dissatisfied with the business community’s unholy alliance with the GOP. But Bennett is only tossing softballs. Both Businessweek and The Nation quote Senator Richard Shelby, who, as the ranking member of the Senate Banking Committee, will be instrumental in confirming (or not confirming) the eventual nominee to head the CFPB. However, while Ari Berman writes that “Shelby has said that a Warren recess appointment would be ‘dangerous to the American economy,’” the nastiest remark Bennett includes is tame to the point of ridiculousness: “She’s a professor and all this,” he quotes Shelby as saying, “in a tone that makes it clear he is not paying her a compliment.”  In case even that is too harsh,  Shelby is also given the chance to opine, “She’s probably a nice person, as far as I know.”

As if he is looking for a cherry to top of his deliberate misunderstanding of the existential threats the CFPB faces, Benett concludes with another sop to Warren’s dogged, straight-shooting personality. Her future is bright, he implies, writing that “Warren gives the distinct impression that she will not suffer long if the President passes her over . . . . Whether the story ends with her confirmation or being driven from town, it’s almost certain that the character of Elizabeth Warren will come out looking just fine.” The statement is offensive in more ways than one; for starters, it’s not Warren that will suffer if President Obama caves to conservative pressure and opts for a less experienced, and perhaps less passionate, nominee. No – it’s the consumers, whom the bureau is charged with protecting, that will suffer. No one, not even Obama, is particularly concerned with Elizabeth Warren’s bruised feelings. Warren was not pushing for herself when she wrote, in her oft-quoted 2007 article in the journal Democracy, that “It is impossible to buy a toaster that has a one-in-five chance of bursting into flames and burning down your house. But it is possible to refinance an existing home with a mortgage that has the same one-in-five chance of putting the family out on the street – and the mortgage won’t even carry a disclosure of that fact to the homeowner.”

Unaddressed in Bennett’s article is what happens if the push to neuter the CFBP succeeds. If Warren is indeed “driven from town,” does that mean the banking industry and their GOP mouthpieces will have turned the CFBP into just another toothless bureaucracy? Joe Nocera, in an op-ed column for The New York Times, writes that, though Warren may not be able to win confirmation, it is a fight worth having, and not one that Obama should shrink from. Nocera concludes:

In politics, there are certainly times when compromise is the right approach. But this is not one of those times. The agency needs to begin its life unafraid to do its job, which won’t happen if the White House backs down now. By contrast, nominating Elizabeth Warren, who is nothing if not unafraid, would send exactly the right signal.