Such are the victories available to the hardcore wing of the minority party in Congress.
When Lazard investment banker and hefty Democratic donor Antonio Weiss withdrew his name from consideration for the number-three job in the Treasury Department, it represented a clear win for Sen. Elizabeth Warren (D-Mass.) and her anti-Wall Street contingent.
From the moment President Obama nominated Weiss to serve as Undersecretary of the Treasury for Domestic Finance, Sen. Warren railed against what he represented more than the man himself.
In a speech last month, she declared: “This is about building some counter pressure on the Wall Street bankers. The titans of Wall Street have succeeded in pushing government policies that made the megabanks rich beyond imagination, while leaving working families to struggle from payday to payday.”
Progressive advocacy groups celebrated the defeat of Weiss’ candidacy for a job whose occupant has almost never been familiar to the public.
As Yahoo Finance Editor-in-Chief Aaron Task notes in in the attached video, Weiss is hardly the poster child for the reckless band of bankers who loaded up on foolish risks and forced an enormous government bailout of their firms. Weiss has mostly been an advisor to large companies, though his firm’s role in advising Burger King Worldwide on its pending merger with Canada’s Tim Horton’s Inc. (THI.TO) has been likened to a spate of “tax inversion” unions with foreign buyers that allow U.S. companies escape U.S. taxes.
The real story, though, is that the Warren wing was intent on denying this senior Treasury position which involves overseeing banking regulation to a representative of the Wall Street banking world. It’s worth noting that in her first months in the Senate, Warren voted to confirm the nomination of Treasury Secretary Jack Lew - a senior Citigroup Inc. (C) executive - in February 2013, drawing surprised public ire from her fellow Wall Street-assailing progressives.
It’s hard to say whether this effort can achieve much more than the largely symbolic blockage of a New York banker from a job that will involve the enforcement of the post-crisis Dodd-Frank bank regulatory reform law – whose detailed rules have yet to be finalized four-and-a-half years after passage.
The Republican majorities in the House of Representatives and the Senate are keen to thwart or dilute various provisions of Dodd-Frank.
Over Warren’s opposition, Congress last month managed to ease a rule on derivatives trading as part of the broad federal budget bill.
A leader of that effort, Kansas Republican Kevin Yoder, vowed to push to neutralize other individual mandates in Dodd Frank in the current Congress. Warren has made the case that the administration’s lead voice on financial oversight should be a strong advocate for stiff bank regulation, to counter GOP maneuvers to tilt policies back in banks’ favor.
This all comes as a wearying reminder that Washington continues to quarrel over the purported causes of the global financial crisis and the proposed measures to prevent another.
Certainly, the financial industry has not tired of trying to mute ongoing government efforts to constrain and “de-risk” the system.
Insurance giant MetLife Inc. (MET) Tuesday said it would sue the U.S. government to prevent its designation as a “systemically important financial institution,” a category of “too-big-to-fail” companies that come under tougher capital requirements and other regulatory restrictions.
With Weiss pulling out of the running for the undersecretary’s role and taking a lesser position as counselor to Lew, the White House says it will conduct a broad search for another nominee.
Part of this will involve deciding whether the administration wants a top banking regulator who knows Wall Street and speaks its language.
A look at the two-decade history of the undersecretary for domestic finance role shows that the majority of the dozen or so individuals to hold the job had an extensive background in finance. Some, though, came from the less-maligned asset management industry, such as the outgoing Mary Miller, who worked for many years at T. Rowe Price Inc. (TROW).
Others came from academia or within the executive branch or Federal Reserve. Chances are, a White House with broader domestic priorities will weigh a desire to propose a low-drama nominee with pleas from those still-powerful banks to nominate someone who understands their woes.
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