When a poor person steals from the rich, Mick Mulvaney calls it a crime. When the rich steal from the poor, he calls it capitalism.
On Wednesday, the White House budget director appeared before the House Financial Services Committee to deliver the semiannual report of the Consumer Financial Protection Bureau, of which he is also the acting head, and to dispel rumors that he might run to replace Rep. Paul Ryan (R-Wis.) as speaker of the House. Mick Mulvaney is a busy man.
Or maybe not. A day before the hearing, The Associated Pressreportedthat the CFPB has not taken a single enforcement action against any financial institution during the six months Mulvaney has been at the helm. Under his predecessor, Richard Cordray, the agency issued two to four fines and settlements per month. The CFPB has jurisdiction over payday lenders, banks, credit unions and just about any institution involved in extending credit to American families. The apparent improvement in corporate behavior beginning in November struck Democrats on the committee as an extraordinary coincidence.
“Are you telling me that every single financial institution in America has suddenly snapped into full compliance with every single consumer financial law since you took over?” demanded an incredulous Rep. Carolyn Maloney (D-N.Y.).
Mulvaney explained that the CFPB is still litigating 25 cases Cordray brought to court. “I have not burned the place down.” (That the prior director had been able to walk and chew gum simultaneously was not lost on anyone.)
During other rounds of questioning, Mulvaney emphasized that he is helping the bureau focus on “more quantitative analysis” in its work and hopes for more guidance from Congress on the meaning of the words “abusive,” “deceptive” and “material” for help in writing and enforcing regulations.
When he accepted the job, Mulvaney said that President Donald Trump had told him to “fix” the CFPB and “get it back to the point where it can protect people without trampling on capitalism.” In his written statement Wednesday, he informed Congress he had developed “new strategic priorities,” including an imperative to “recognize free markets” and “take a prudent, consistent and humble approach to enforcing the law.” No one will accuse him of inconsistency.
It was appropriate for Mulvaney to be defending his record on the day Ryan announced he would not run for re-election in November. Both men began their careers in Washington as leading lights of a younger generation of libertarian-leaning Republicans ferociously opposed to government spending and the regulatory state birthed by Franklin Delano Roosevelt’s New Deal. In the name of freedom, capitalism and competition, they hoped to slash programs for the poor and taxes for the rich, singing praises to the rule of law over the rule of men.
And yet both politicians have achieved their greatest purpose as agents of Trump, dutifully pressing ahead with narrow priorities while ignoring concerns about every element of their leader’s program that should have frightened small-government advocates ― epic military spending, violent deportations, Russian election-meddling and a soft spot for white nationalism. Their careers illustrate what the libertarian political project in America has become: an unprincipled protection racket for the rich. Ryan delivered them a smashing tax cut, while Mulvaney ensures that garden-variety predation goes uncorrected.
The CFPB is charged with monitoring markets and writing new regulations where necessary, but its primary purpose is to guard against simple theft. During his tenure as director, Cordray returned $12 billion in ill-gotten gains from financial firms to American households ― much of it from “undisclosed fees,” “unauthorized withdrawals” and similar behavior described by people who did not go to law school as “theft.” For this, congressional Republicans did their best to convert him into a national pariah, and the CFPB’s semiannual report to Congress became an exercise in ritualized paranoia.
Last year, Rep. Sean Duffy (R-Wis.) assailed Cordray for “racism,” “sexism,” “intimidation,” and “retaliation,” as Republicans took turns shouting down and denouncing Cordray in a spectacledescribed by the notoriously radical American Banker trade newspaper as an “onslaught, during which Cordray was often denied the ability to respond.” Rep. Patrick McHenry (R-N.C.) suggested Cordray’s agency had aided insider trading, while Rep. Ann Wagner (R-Mo.) declared that Cordray had somehow fallen down on the job by exposing the fake accounts scandal at Wells Fargo and finingthe bank $100 million.
On Wednesday, Republicans could not quite give up the tradition, even with one of their own in the hot seat. Rep. Andy Barr (R-Ky.) denounced Cordray for conspiring against “our men and women in uniform,” while committee Chairman Jeb Hensarling (R-Texas) declared the CFPB “the single most powerful and unaccountable agency in the history of the Republic.”
Few people remember the day the United States Senate confirmed Richard Cordray as the day American liberty died, and so Hensarling had to invoke a few hypothetical outrages to get the thin crowd’s blood moving. The CFPB’s budget is derived from the Federal Reserve rather than through the congressional appropriations process. What would happen if the CFPB approved millions of dollars to outbid AT&T for the naming rights to the Dallas Cowboys stadium? What if the CFPB sent a T-shirt to every man, woman and child in the United States? A solemn Mulvaney said that no one could stop him from engaging in such despotism if he so chose. Hensarling found the situation “borderline insane,” and it was hard to disagree with him.
Even a congressional oversight hearing for the agency did not really count as oversight. Mulvaney repeatedly insisted that the 2010 Dodd-Frank law that created the CFPB did not require him to “answer questions” or “testify” before Congress, only to “appear.” Hensarling agreed that this was a matter of very grave concern, but the GOP dropped the affair after Rep. Stephen Lynch (D-Mass.) pointed out the exact same language is used in the Federal Reserve Act to compel the Fed chairman’s regular reports to Congress.
And yet, despite the habitually apocalyptic rhetoric from Republicans, it will likely be Democrats who deliver the most serious lasting damage to the CFPB under Trump. In March, the Senate passed a bank deregulation package that would, among other things, help banks hideracial discrimination in the mortgage market, undermine consumer protections for mobile home loans and eliminate a host of predatory lending standards for smaller banks. The bill was crafted by Senate Republicans and four Democrats ― Sens. Mark Warner (D-Va.), Heidi Heitkamp (D-N.D.), Jon Tester (D-Mont.) and Joe Donnelly (D-Ind.), who distributed a breathtakingly dishonest“Myth vs. Fact” sheet to drum up support. Ultimately, 17 Democrats voted for the bill, including the party’s 2016 vice presidential candidate, Tim Kaine (D-Va.). Unless the Republican-controlled House completely loses its collective mind, the bill will be signed into law by President Trump.
The libertarian movement within the Republican Party is dead. American democracy doesn’t look much healthier.