To say any candidate, or either party, has a monopoly on distortions and hypocrisies in a campaign as fractious as this one would do a grave disservice to the spinmeisters on the other side of the aisle. But for bankers, the claims that Elizabeth Warren floated during her turn in the spotlight at the recent Democratic Convention deserve special scrutiny.
Warren, of course, is the Senate candidate from Massachusetts and self-described mother of the Consumer Financial Protection Bureau, who rarely passes up a chance to wag her finger at the financial industry. She certainly wasted no time on the convention podium lighting into bankers for all manner of alleged misdeeds.
Here are a few of the curious and/or spurious accusations Warren leveled during her warm-up act for the president that are particularly pertinent to bankers:
Warren: "The system is rigged. Look around. Oil companies guzzle down billions in subsidies. Billionaires pay lower tax rates than their secretaries. Wall Street CEOs—the same ones who wrecked our economy and destroyed millions of jobs—still strut around Congress, no shame, demanding favors, and acting like we should thank them."
Reality check: Demanding favors? Like the labor unions that helped push General Motors and Chrysler over the brink and then got the president to help cut in front of bondholders during a taxpayer-funded bailout? Or the class action lawyers who get rich suing job-creating corporations and then funnel some of the spoils to the Democratic Party?
Warren: "President Obama gets it because he's spent his life fighting for the middle class. And now he's fighting to level that playing field."
Reality check: Obama fighting to level the playing field? With a Fed chairman whose near-zero interest rate policy is hurting retirees and other savers while rewarding the profligate—most notably Uncle Sam? Even Neil Barofsky, the former Tarp Special Inspector General who is quite fond of Liz Warren, has blasted the Obama White House and Treasury Secretary for lying to the American people and disguising a giant-bank bailout as a homeowner rescue.
Warren: "Mitt Romney's the guy who said corporations are people."
Reality Check: This ploy must have come from a Political Dirty Tricks 101 class back at Harvard. As this video shows, Romney made the comment in a good-natured response to hecklers. Here's the full text of what he said: "Corporations are people, my friend. Of course they are. Everything they make ultimately goes to people. Where do you think it goes? Whose pockets? Whose pockets? People's pockets."
FYI, Ms. Warren, a lot of the people Romney referred to are the teachers and firefighters whose taxpayer-insured pensions are invested in—horror of horrors—corporations.
Warren: "After the financial crisis, President Obama knew that we had to clean up Wall Street."
Reality Check: Obama's cleaned up Wall Street? Who's gone to jail, Ms. Warren? In the wake of the tech bust a decade ago, George W. Bush's Justice Department went after the deposed bosses at Enron, WorldCom and Tyco and put them in jail. President Obama's Justice Department has taken a pass on the likes of Jon Corzine of MF Global, Angelo Mozilo of Countrywide Financial and the boatload of cads who ran places like AIG, Bear Stearns and Lehman Brothers. Or, as Neil Barofsky said to me recently, given the "trillions and trillions of dollars of value that have been wiped out … it certainly seems like there should have been a rampant area for potential fraud cases."
Warren: "I had an idea for a consumer financial protection agency to stop the rip-offs. The big banks sure didn't like it, and they marshaled one of the biggest lobbying forces on earth to destroy the agency before it ever saw the light of day. American families didn't have an army of lobbyists on our side, but what we had was a president—President Obama leading the way. And when the lobbyists were closing in for the kill, Barack Obama squared his shoulders, planted his feet, and stood firm. And that's how we won."
Reality Check: Sure, the big banks didn't like it, and you're right that plenty of sleazy practices flourished. But there are more than 7,000 banks in the U.S. And the Dodd-Frank Act that your bureaucracy is a part of has done tremendous collateral damage to thousands of banks that were innocent. Whether you realize it or not, that means it's also hurting millions of the small businesses and people you claim to represent.
Neil Weinberg is the editor in chief of American Banker. The views expressed are his own.