Yesterday, the Financial Crisis Inquiry Commission published its report. After a year-and-a-half of delays, internal bickering, and staff changes, everyone is wondering if we really do know who to blame for the worst recession since the 1930's. It seems that the answer to that question depends upon who one believes, for there are two distinct opinions. [Note to those readers who might be contemplating writing a who-done-it novel: Split guilt or alternate endings do not sell well. People like some certainty when it comes to villainy.]
The 6-member majority, led by Phil Angelides, former California state treasurer, and five other Democratic-appointees (a group that was "not particularly ideological", according to USA Today) spread the blame with a broad brush: Wall Street, the federal government, the Federal Reserve, mortgagors, financial firms, and derivative-traders all came in for a little finger-pointing.
The four Republicans dissented, finding fault, not with Wall Street but with Pennsylvania Avenue, Main Street, and that insidious, amorphous entity known as the "Housing Bubble". Yes, if only Clinton and Bush II had not wanted to encourage expanded home ownership, thereby prompting mortgage lenders to peddle very low-interest rate products, and if home buyers hadn't been stupid or dishonest enough to believe the lies that their mortgage bankers were telling them, this whole disaster might have been avoided. But, you might ask, what about the Merrill Lynch's and Goldman Sachs's of Wall Street? Well, according to the minority, they were victims, merely trying to second-guess the housing market and applying free market principles. They were merely catching a ride on the housing bubble, trying to make a buck here and there. When the bubble burst, they were as surprised as anybody (though they hardly fell as hard as most).
The four members of the minority suffer from an ideological aversion to regulation. This is part-and-parcel with their failure to blame unfettered capitalism for any part of the crisis, a view subsumed from American Enterprise Institute fellow, Peter Wallison (see USA Today editorial linked above). I strongly recommend checking out the Wikipedia article on the AEI. Their ties to the Bush II administration are truly Cephalopodic.
Is there a dot here anywhere? I believe there is. Here's how USA Today put it:
"These dissents raise valid points, which are acknowledged in the majority report. But they glaringly omit the many failures of U.S. regulators to spot the growing credit bubble and to take actions to mitigate it. That, unfortunately, seems to be the point. Last year, Congress passed a sweeping banking reform law, and various agencies will craft rules to implement it. The dissenters seem intent on avoiding any conclusion that would argue for tough standards."
When an investigative commission, with the power to subpoena witnesses, conducts an 18 month investigation and issues a report, I, as a concerned citizen and the millions of others in this country whose very livelihoods have been put at risk, would like to think that we will be told the truth about where the fault lies, so that we can do something to head off such calamities in the future. When the report finally emerges from that closeted investigation, I would like to think that every member would sign up to conclusions that point the way to solutions, not down a road that circles back to the slippery slope that we are trying to get out of. As USA Today opines:
"In fact, the commission seems to have become a microcosm of dysfunctional American politics. The panel's four Republicans refused to go along with Democrats, then divided among themselves. Sound familiar?"
Yes, all too familiar. It is yet another example--perhaps the most tragic example--of the fact that Republicans absolutely cannot be trusted to govern America. For they are more interested in defending their ideology than they are in solving problems--even the ones upon which the very future of our republic depends.