ANOTHER EMPTY COMMISSION?

The NY Times has an editorial that questions the strength of President Obama's "re-regulation" efforts. Specifically, the editorial makes it clear that his efforts have emerged with an "inauspicious start."

Anyone who follows this blog knows why I would consider this to be a very generous assessment. In my view, we're doing very little to discipline market stupidity and greed. In fact, it's being rewarded under the Bush-Obama plans.

Making matters worse is how the Financial Crisis Inquiry Commission is made up. This investigative body, in the spirit of the 1930s hearings led by Ferdinand Pecora, was created by Congress to perform an autopsy of the collapsed financial institutions, and to look into the conditions that led to the market meltdown. As Robert Kuttner points out, early indications are that the commission will be stocked with the same market sycophants who made the mess possible.


If early reports are correct, and people like former representatives Jake Garn (R-UT) and Bakersfield's Bill Thomas (R-CA) are on the commission, the commission promises to be little more than an apologetic rubber stamp for Wall Street's behavior. I write about Garn's role in helping to create the financial mess in my book (see page 253).

For Bill Thomas' part, he rarely met a financial, oil, or agricultural group that he wouldn't support with taxpayer subsidies and favorable legislation. Why would either one of these two want to step up and find fault with the deregulatory legislation that they helped craft?

Put another way, the commission will be both toothless and gutless. The financial sharks will live to see another day.

- Mark

P.S. This post by former Labor Secretary, Robert Reich, explains why President Obama's plan for reforming Wall Street comes up empty. It's short and to the point.