Elizabeth Warren is set to make her Senate candidacy official Wednesday. That means she’ll spend the next year or so running against Scott Brown in Massachusetts. At least, that’s what it’s supposed to mean. In practice, expect Warren to spend the next year or so running against an altogether different opponent: Wall Street.


(Joshua Roberts/BLOOMBERG)

In this telling, the economy might be the central problem for Democrats, but it didn’t strictly have to be their problem. The markets crashed on Bush’s watch, after all. The horribly unpopular -- but stunningly effective -- TARP bailout was passed under his administration, too. Democrats could have come in and made a clean break. They could have come in and brought Wall Street to justice, making perfectly clear to the American people who was really behind the crisis. That might not have healed the economy any faster. But perhaps it would have protected Democrats from some of the blame.

The Obama team did the opposite. It supported TARP during the campaign and administered the second bucket of funds once in office. It rejected efforts to rescind Wall Street bonuses and held meetings with bank presidents. It delayed financial regulation for more than a year and wrote the law in as non-punitive a fashion as possible. At one point, President Obama told an assemblage of Wall Street CEOs that “my administration is the only thing between you and the pitchforks.”

The Obama administration had its reasons for doing all this. The economy couldn’t begin to recover until the markets unfroze, and the markets were not going to unfreeze if the White House launched a war against Wall Street. Same goes for financial regulation: it might have been popular to use the policy to punish the banks, but it would have delayed the recovery, and perhaps led to regulations so stringent that future growth would also be threatened.

But the fact remains: the White House chose to stand between Wall Street and the pitchforks. Rather than joining with the public against the bankers who had caused the crisis, they were joining with the Bush administration and the bankers to chart a cooperative path back to record profits for the financial industry. Insofar as Americans saw the financial crisis as an “us vs. them” moment, the White House fell into the “them” category as often as they fell into the “us” category. And that can’t have helped their political fortunes.

During this period, Elizabeth Warren was a lonely voice for consumers, and against the administration’s treatment of the banks, during this period. As one of the watchdogs for the TARP funds, Warren regularly and publicly clashed with Tim Geithner over the deal the administration was giving to the banks. “You’re telling me that these financial instruments that are bought by very sophisticated parties are going to be treated effectively like deposits in checking accounts and savings accounts.” Warren snapped at one hearing. “They ended up effectively with 100-cent-on-the-dollar government guarantees for which they had never paid.” The look on Geithner’s face tells you all you need to know about the relations between the two at the time.

Then, it was Warren’s idea for a consumer protection agency that became the administration’s central populist demand in the financial-regulation bill. They were never able to explain how the law would actually punish the banks, but they could at least explain how it would help consumers. And the answer to that question, basically, was “we’re going to do what Elizabeth Warren told us to do.”

All of which will make Warren’s candidacy an interesting test case for a very particular theory of the current political moment. Unlike most Democrats, she’s not tainted by the bailout. Unlike most Republicans, she’s not held back by a mistrust of all regulation. She can run the campaign against Wall Street that many have been hoping to see for the last three years.

Scott Brown, for one, can already see it coming. Brown was a reluctant “yes” on the financial-regulation law, and the cost of his support was significantly reducing the strength of the bill. But to hear him tell it now, he was the country’s lead Wall-Street reformer. “I worked very hard to make sure that banks didn’t act like casinos with our money,” he told New England Cable News. “So the bill that she was apparently working on...I worked on it, I voted on it, I pushed it through...There’s a big difference between talking and actually doing it.”

But Warren, who oversaw the TARP funds and then led the consumer protection agency through its first year, was one of very few financial reformers who got to do it rather than just talk about it. And Brown’s record, which includes opposing the bill’s bank tax, watering down the Volcker rule, and receiving more than $140,000 in contributions from the financial industry, is going to make the question of what exactly he was doing a bit harder to answer. Perhaps that wouldn’t matter against a normal candidate. But it’s going to matter against Warren.