Posts Tagged ‘Financial Crisis Inquiry Commission’
They won’t like what they find
Today President Obama gave his blessings to a congressional “Financial Crisis Inquiry Commission,” with subpoena power and a charge to “examine the causes of the current financial and economic crisis in the United States.” No use pretending otherwise – I’m looking forward to the spectacle, and hope the chair is a bulldog who digs with sharp instruments for the damning facts. The commission’s agenda seems almost impossibly broad, but if anything it needs to be broader – I’m going to get all Elizabeth Warren and say that the commission should be doing a whole lot more to look at the mortgage wholesaling and retailing industry through which financial institutions peddled toxic products to consumers. Right now the vast lending apparatus responsible for injecting doomed loans and bad data into the works falls into one half of the first of the commission’s 22 areas of inquiry: “fraud and abuse in the financial sector, including fraud and abuse towards consumers in the mortgage sector.”
The commission will rightly focus not only on practices in the private sector but on role of government enforcement and regulations in promoting risk, excess, fraud and failure. The findings on many fronts will point right back at Congress. The new legislation allows for the commission “to refer to the Attorney General of the United States and any appropriate State attorney general any person that the Commission finds may have violated the laws of the United States in relation to such crisis,” but part of the horror here is that most of what has happened to lead the nation into a ditch was in fact legal, under laws passed by Congress or regulations issued by federal agencies over the last three decades. Witnesses on the stand shouldn’t just include the likes of Bear Stearns’ Ralph Cioffi; we need to hear from former Sen. Phil Gramm and ex-HUD Secretary Andrew Cuomo too, among many others.
How the homes we live in turned into the monsters that ate our economy and the United States became a nation obsessed with real estate.
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