Is Elizabeth Warren Up To The Job?

Elizabeth Warren, the new interim head of the Consumer Financial Protection Bureau (CFPB), is by all accounts a brilliant and likable woman.   She may regret getting the job she campaigned so hard to get.

The problem is not her familiarity with the issues.  It’s scant experience doing anything like running a huge bureaucracy. Activists such as Warren don’t always make good managers.  Her background as a professor of law at Harvard University and as the head of the Congressional Oversight Panel may not have adequately prepare her for the challenges of running a federal agency created under the Financial Reform bill with broad powers, hundreds of employees and a budget of about $500 million.

Turf battles are inevitable as other federal agencies jealously guard their long-held prerogatives against the upstart CFPB.  These will require the skills of a diplomat not an activist.  Warren will also have to find a way to reach some accommodation with the banks who argued vociferously that the last thing that they needed was another federal agency overseeing consumer protection.   Then there the state attorneys general.  Two of them,  New York’s Andrew Cuomo and Connecticut’s Richard Blumenthal, are running for higher office (Cuomo for governor and Blumenthal for the U.S. senate) based on their track records fighting for consumers.  They are going to need to be consulted on major policy matters.

There is the political reality.  Republicans are steamed at President Obama for appointing her on an interim basis to avoid a pointless confirmation battle.  Warren, though, will need to win over her critics if she hopes to do more than issue sharply worded press releases.    The late Sen. Edward Kennedy (D-MA) was a master at building bipartisan consensus. He managed to get quite a lot done in his storied career because he figured out how to get things done.  Warren should learn from Kennedy’s example.

Finally, there are the mundane details.  Warren will soon be making a huge numbers of decisions such as hiring employees, leasing equipment and office space and developing internal policies.  She will also have two bosses: her friend  The President and a sometimes-adversary Treasury Secretary Timothy Geithner.  To be successful,  Warren will need to settle her differences with Geithner rather than run to the President to intervene on her behalf after every disagreement.

Some may argue that running the CFPB is such a vast and complicated undertaking that even an experienced bureaucrat such as the FDIC’s Sheila Bair would find it a challenge.   That job seems to require an activist’s passion, a  saint’s patience, and a marathon runner’s resilience,  qualities that few people posses in tandem.

Warren may be one of the few who can change Washington without being changed by it.  The odds against her are daunting.

–Jonathan Berr