Today's Warren appointment was roundly praised by consumer advocates. Simon Johnson calls it "the right appointment at the right time:"

The case for appointing Elizabeth Warren to set up the new Consumer Financial Protection Bureau (CFPB) was, at the end of the day, overwhelming. She had the original idea, she helped build political support, and her own credentials have been only strengthened by her work as head of the Congressional Oversight Panel for TARP. On Friday, the president will reportedly appoint Professor Warren as an assistant to the president and special adviser to the Treasury Secretary, with the task of setting up and initially running the CFPB.

Some of Ms. Warren’s supporters think this move is something of a half-measure – they would have preferred a conventional nomination, with all the fanfare of a classic confirmation battle in the Senate. There is something to be said for that, but the interim appointment route is by far the best way forward for three reasons.

First, this form of appointment puts Elizabeth Warren to work right away – on the issues of consumer protection that are first order both for ordinary families and for the macroeconomy. You really cannot build a sustainable economic recovery on the back of exploitative or abusive behavior by the financial sector. These issues are urgent and need resolution as soon as possible.

Second, the president finally has an adviser who understands the financial sector and who has healthy skepticism about its intentions and actions. As we documented at length in 13 Bankers, too many top policy people – both in this administration and all its recent predecessors – have been overly inclined to accommodate the interests of finance, particularly the big banks. In this regard, putting Ms. Warren directly into the White House with the highest possible level of access is exactly the right thing to do – much better, for example, than making her purely a Treasury appointment.

Third, this step does not avoid a debate in the Senate – it merely postpones it to a more advantageous moment. Presuming that Ms. Warren is nominated as for a five year term as head of the CFPB, she would go before the Senate Banking Committee with a real track record of achievement as interim head. The debate would not be about what the agency could do, but rather what it has already done – and what it is set up to do next. These are exactly the right terms on which to bring out into the open all those who think that the financial sector only ever behaves well – or that enforcing sensible rules on lenders would somehow bring the economy to its knees.

Mike Lux calls it a "a home run for our side:"

I am more than a little biased, because Elizabeth has become a good friend over the past few years, and because I have rarely seen the kinds of guts and tough bargaining strategy that I watched her show during the financial reform fight and the TARP oversight work. She publicly and repeatedly faced down Tim Geithner on a series of major issues around TARP and the overall handling of the financial crisis. She privately went nose to nose with Barney Frank and Chris Dodd and Treasury during negotiations over the financial reform bill. She had to time and again back Dodd down when he was getting ready to make bad compromises on the consumer agency. (Why do you think Dodd has fought so hard to keep Warren from being nominated?) She is the real deal, a fighter for middle class and poor families through and through.

And, Robert Kuttner calls it "a huge win:"

The early Administration leaks about Elizabeth Warren serving as an "interim" appointee to set up the Consumer Financial Protection Bureau were equivocal. In one version of the story, she would be a counselor to Treasury Secretary Tim Geithner. In others, this appointment would be an alternative to her even being considered for the job on a permanent basis -- a wink and a nod to the financial industry.

But that scenario turned out to be wrong, and underestimated Warren's own tenacity. It is now clear that the indefatigable Warren will be both a senior presidential adviser with direct access to Obama when she needs it, as well as a Treasury employee. In an administration dominated by Rubinistas, Warren will literally be the first financial progressive with both a personal connection to the president as well as an independent power base.

This strategy is a win-win, on several grounds. It gives Warren full authority to set up the agency, without having to run the gantlet of confirmation hearings and a likely Republican filibuster.

This way, Warren will be able to get the agency quickly up and running in a manner that serves both consumers and progressive politics. Early directives to bring greater simplicity and transparency to credit documents will be extremely popular. Politically, the carping by the banking industry and its Republican allies will remind the public which side the GOP is on.

We did it. We were united. We were relentless. And, we won - big time.

Expect light posting over the next few weeks.

Thanks so much for reading!

Reuters describes Elizabeth Warren as Wall Street's worst nightmare:

Elizabeth Warren is folksy and plain-spoken and favors cardigans over Washington power suits. Many on Wall Street view her as their worst nightmare but she is a hero to liberal activists and consumer groups...

On Wall Street, "there is very strong dislike of her and what she might do," said Bert Ely, a banking consultant in Alexandria, Virginia.

The banksters are against Elizabeth Warren because they know she'll stand up to their excesses and hold them accountable. Even the conservative, Rupert Murdoch-owned New York Post concedes that Warren is the one for the job:

So far, Warren's detractors are finding it difficult to identify anyone more viable than the 61-year-old scholar. She is chairwoman of the Congressional Oversight Panel -- a five-member Washington agency charged with reviewing how effectively the US Treasury and other government agencies allocated the taxpayer-funded rescue packages.

Where do you stand? Do you stand with the banksters? Or, do you want a powerful watchdog looking out for our interests at the CFPA?

So reports the New York Times:

Having passed the Dodd-Frank Act earlier this summer, the bill that aspires to reorder our financial universe in the wake of the most serious economic crisis in generations, Congress has moved on to other matters. Regulators are left to write the rules that will make financial reform a reality — or not — and are beginning that laborious process. ..

The question is this: Will regulators give Wall Street’s big dealers what they want in a second bite of the apple?

There is no doubt that regulating the freewheeling derivatives market is important work. If done right, heightened scrutiny could well eliminate the potential for another disastrous bank run like the one that threatened world markets in September 2008 when the American International Group imploded. The insurer had written insurance on mortgage securities— a derivative known as a credit default swap — and almost collapsed after, among other things, onerous collateral calls from its trading partners drained its cash...

“It is again going back to the battlefield, and this is a much more complicated battlefield...”

“There is going to be so much pressure from the biggest financial institutions not to have limits,” said Heather Slavkin, senior policy adviser of the A.F.L.-C.I.O.’s Office of Investment and a participant in the Aug. 20 meeting. “Regulators are going to be very much focused on what types of swaps get cleared, so the governance and ownership aspects that are just as important may not get the attention they deserve.”

It's not over yet. We must continue to hold the regulators accountable and ensure that they follow both the letter and the spirit of the Wall Street Reform law.

Another powerful voice for Elizabeth Warren. This time, it's noted Law Professor Norm Silber of Hofstra and Yale Law Schools. Professor Silber also holds a Ph.D in history and is a specialist in the history of the consumer movement. Professor Silber:

The tone reflected by the news stories proceeded much like this:

Landmark legislation can finally protect the public from hidden dangers which might happen to any of us any day. For the first time we have the real prospect that products will be safer and that we will know more about the dangers in store. But this can happen only if the new Agency has an independent and assertive start under an experienced leader with loyalties that run toward the public interest, and not toward special interests who have from the start tried to kill the new authority. The new director will, for better or worse, personify the strength of this new effort. There can hardly be any doubt about who the head of the new agency should be. The question is who will it actually be?

This might sound like today’s debate over the choice of the new director of the Bureau of Consumer Financial Protection—but it is a more accurate reflection of the drama that played out a century ago, in 1906, when the first director of what became the Food and Drug Administration was selected by President Teddy Roosevelt.

The obvious best choice was the famous chemist Dr. Harvey W. Wiley. Beginning in 1882, Dr. Wiley opened up the fight for a Pure Food and Drug Law. Wiley and his “poison squad” of employee-volunteers at the Bureau of Chemistry, in the Agriculture Department, served as “human guinea pigs,” by eating canned soups and preserved meats, publicizing their frequently dangerous ingredients in news stories and scientific journals. By 1906 public respect for Wiley’s qualifications and for his independence from the prepared food manufacturers distinguished him. Congress turned to this chemist in the Agriculture Department to become the first official responsible for enforcing the Pure Food and Drug Law.

Although Dr. Wiley lost a number of battles—and over the years was charged by opponents with biases of his own—he built a skilled and independent, empirically oriented staff. During the crucial initial years, in particular, he built a strong foundation for a great agency that sustained it for the twentieth century. Only in more recent years, as drug companies have exercised greater influence over appointments and the agency’s budget, have questions about the FDA’s independence begun to stick.

Last month, Congress created an independent regulatory body within the Federal Reserve System, a body designed to address consumer financial products. The near-collapse of the banking system, and the economic and human devastation resulting from a dysfunctional lending market,precipitated this reform.

Echoes of the Wiley drama resound in this modern controversy. The question today is whether Professor Elizabeth Warren of the Harvard Law School and Chair of the TARP Congressional Oversight Panel should be appointed (by the President, with the advice and consent of the Senate) as the first Director of the new Bureau of Consumer Financial Protection.

In Wiley’s tradition, Professor Warren conducted empirical research and policy-oriented scholarship to demonstrate the consequences of defective products and deficient regulation. She appeared in documentary films about personal tragedies hastened by under-regulated credit card agreements, and conceived of the new consumer agency to address the matter. She criticized the insufficient use of TARP funds to help homeowners directly. She encouraged legislators to retain the new Bureau as part of the financial reform package.

A comparison between these two reform efforts, a century apart, leads us to consider what skills and qualities a first director should have; and what role those who stand to be regulated should play in the process of choosing their own regulator.

Would the launch of the new Bureau be enhanced by choosing one who helped define its mission and regulatory objectives? Would public confidence be diminished irretrievably if the director is chosen by the affected industry or its allies? Has devotion to the creation of this Bureau compromised Warren because of doubt cast on her detachment and objectivity?

The choice of Wiley greatly enhanced the profile of the FDA as it began its life. Blocking Wiley’s appointment—even if it had led to another, excellent and independent voice—would have demonstrated the persistent muscle of the affected industries, and would have suggested that enforcement and rulemaking authority also would be subject to interference. How much less effective a century of food and drug regulation probably would have been if the food industry played a major role, or exercised a veto, in selecting the first head.

Wiley was perceived as holding a special “bias”. He appeared to care more for the safety of the food supply than for extending product shelf-life of food or the profits of industry. When the manufacturers of such preservatives as borax or additives such as benzoate of soda cried out about economic realities, Wiley typically countered by discussing the danger to one’s kidneys or liver. His response was not perceived as being biased—it just seemed he had a more balanced set of priorities. Today when the economic importance of such innovations as credit card teaser rates have been pled, Professor Warren has countered by addressing the impact of particular debt arrangements and fees on the financial survival and confusion of individual consumers.

In short, there is no substitute for leaving the launch of a new Agency in the hands of those who understand the importance of its mission and care for its future. If the Bureau of Consumer Financial Protection is to be what most of the public hopes for, it should get off to an independent start with a director who is chosen without an industry-encouraged compromise and who is broadly identified with its crucial mission.

This is an historic agency. And, we need to launch it with an historic leader. That leader should be Elizabeth Warren.