|Inquiry Commission Chairman, Phil Angelides|
A damning inquiry into the 2008 financial crisis released today is essentially a broad indictment of Wall Street and our government that supposedly regulates the financial markets. But, perhaps most damning of all, is the fact there was absolutely no bi-partisan support on the 10-member commission, foreshadowing the fact that while reform may be necessary to avoid another major financial catastrophe, reform will probably be shelved until the next time the issue is brought to the public’s attention. Like, for example, if there is another recession or depression.
One of the most striking things in the report is not the moral ineptitude, or greed of the financial institutions, but the fact that the very institutions designed to regulate Wall Street nurtured this excessive risk-taking culture. In large part we have simply reaped what we have sewn. The Fed, which is supposed to regulate Wall Street, has basically been a revolving door for financial executives for decades, and the chairman Alan Greenspan (until 2006) didn’t even believe in regulation.
While President Bush’s administration is criticized for failing to recognize a crisis was at hand, and then failing to provide a consistent response, President Clinton has also come under heavy fire. The deregulation of derivatives in 2000 under Clinton is called “a key turning point in the march toward the financial crisis.” In addition, the Glass-Steagall Act of 1933 (I hope you don’t have to get out your history book to see the irony in the date) was also repealed under Clinton, which played a huge role in the creation of companies that were, and still are, ‘too big to fail.’
In the conclusion of the report, the panel notes, “The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done… If we accept this notion, it will happen again.” But, given the complete lack of enthusiasm for financial reform in the new House of Representatives, nothing could very well be done. I find it extremely frustrating that for all Republican’s talk of ‘free enterprise’ and less government intervention, these very ideas have led to companies who cannot fail – something so inherently contradictory to the idea of a free market. To add to that, less oversight has led to one of the biggest government interventions in history.
I’m not really sure what’s more disgusting, Republican hypocrites, or two-faced Democrats.
Further Reading:NY Times: Financial Meltdown Was 'Avoidable,' Inquiry Concludes