The Sandbagging of Elizabeth Warren : Naked Capitalism

Yves Smith:I don’t know who is pulling the strings, but any objective look at the so called mortgage settlement negotiations shows that a lot of people are being played for fools. Precisely because Elizabeth Warren is being attacked so forcefully by the Wall Street Journal and other banking industry loyalists, too many of her erstwhile defenders are giving a free pass to the fact that the Administration itself is undermining her, and with her, any attorneys general who sign up for the settlement, assuming it ever sees the light of day.
Recall the Team Obama modus operandi: getting something done, no matter how lame, compromised, or even counterproductive it is, is considered to progress because it presumably can be swaddled in enough propaganda to be made attractive to a presumed to be chump public. Never mind that Obama’s flagging poll ratings and the abysmal mid-term Congressional results, where the Blue Dogs, the Democrats philosophically most aligned with Obama, were mowed down, show that that strategy is becoming less and less effective. Recall in the runup to the mid-terms how many Democratic Congressional candidates were straining to distance themselves from Obama.
The Democratic state attorneys general have even less to gain by playing nice with this Administration. Some are from states that are solidly liberal and/or so hard hit by the mortgage meltdown that being seen to be soft on banks would be political suicide.
Obama himself is clearly enamored with the theatrics of governance. And why not? His assumption is that as long as he looks meaningfully less conservative than the Republicans (which now can be plenty conservative), big swathes of the country will vote for him by default. And now that the Supreme Court Citizens United decision has raised the likely cost of winning the presidency to $1 billion, currying favor with big corporate donors, which of course includes banks, is of paramount importance. So any roughing up is a staged affair.
We have long been of the view that for Elizabeth Warren to think she could make any lasting headway inside with an Administration fundamentally opposed to what she stands for was wishful thinking. Now I have no doubt that this wishful thinking has not developed in a vacuum, that she has been, ahem, encouraged to be unduly hopeful about the odds of her getting the nod as the first head of the Consumer Financial Protection Bureau.
But as with General Petraeus, the move to bring her into the tent was all about keeping the Administration’s enemies closer. It has been particularly keen about neutering critics on the left. Early on, it cut off institutional funding of liberal interest groups that failed to maintain message discipline. Our DC contacts tells us the Obama has now moved up the food chain and is working to defund think tanks deemed to be too pinko (for instance, we were told of one, with all the particulars, that was dumped by a longstanding $1 million a year donor).
Even though Geithner might make a show of considering Warren’s views, he and she are philosophically 180 degrees apart.. (more at link and source material)
http://www.youtube.com/watch?v=xyew29DsxRc