There was a bit of chatter on the internet because President Obama made a joke in appointing former Ohio Attorney General Richard Cordray, a Jeopardy game show champion, to run the new post of Consumer Financial Protection Bureau. When Obama said that Cordray’s answers to questions posed at his confirmation hearings would be in the Jeopardy format, nobody laughed.
On Jeopardy, contestants answer with a question. Okay–here goes: Who is really hostile to business and is now going to be in a powerful, new regulatory job? Who is Richard Cordray? The Wall Street Journal gives a summary of the country’s newest regulator in declarative sentences today:
Mr. Cordray, the bureau’s current head of enforcement, is a political enforcer in the Eliot Spitzer mold, which is not what the country needs in an ostensibly dispassionate federal regulator. He showed his hostility toward business after becoming AG in 2009 after his predecessor resigned in disgrace, launching an avalanche of litigation.
He sued Ally Financial’s GMAC Mortgage over its foreclosure practices-a lawsuit that helped spawn the national robo-signing uproar, which has mushroomed into an effort to force big banks to cough up billions for Democrats to redistribute. He sued rating agencies for grading mortgage-backed securities as safe investments. He sued Bank of America for purportedly hiding losses and bonuses prior to the Merrill Lynch merger. The list of cases is long.
He’s also tight with the tort bar. A Journal story last year detailed how out-of-state plaintiffs firms contributed $830,000 to the Ohio Democratic Party candidates’ fund in 2007 and 2008, which in turn supported Mr. Cordray’s campaign to the tune of about $2 million. The three law firms Mr. Cordray hired in the rating agencies’ lawsuit all contributed to the Ohio Democratic Party.
In an interview with the Journal last October, Mr. Cordray compared an Ally employee accused of robo-signing to Nazis at Nuremberg who claimed they were merely following orders. In a chat with Bloomberg Television, he labelled the foreclosure practices of big banks “a business model based on fraud.” Good to see a regulator who takes a cool, even-handed look at the evidence.
This is not the person the country needs in a regulatory job as we struggle to right our economy. In fact, a new regulatory agency is just about the last thing we need right now. But this appointment shows what the administration really thinks about the profit-motivated segment of our economy-you know, the producers. This is just one of many actions by the Obama administration that puts our weak recovery in jeopardy.