Lehman, AIG, and the credit ratings agencies got their day in the harsh Congressional sun. Next up: Federal regulators
While most intelligent beings in the known universe are focusing their attention on the presidential election scheduled to take place in twelve days, the implications of the last national election are still cause for some discombobulation, at least to my eyes. By which I mean that without the change in power in Congress in 2006, we would not have the pleasure of witnessing Rep. Henry Waxman, D.-Calif., grandstanding to imposing effect at the outset of a House Committee on Oversight and Government Reform hearing looking into the role of federal regulators in perpetrating the financial crisis. Even though its been almost two years since Democrats took over the House and Senate, I still find myself dumbfounded at the change in, er, tone.
Our focus today is the actions and inaction of Federal regulators. For too long the prevailing attitude in Washington has been that the market always does best.
The federal reserve had the authority to stop the irresponsible lending practices that fueled the subprime mortgage market, but its longtime chairman, Alan Greenspan, rejected pleas that he intervene.
The SEC had authority to insist on tighter standards for credit rating agencies, but it did nothing, despite urgings from Congress.
The Treasury Department could have led the charge for responsible oversight of financial derivatives. Instead, it joined the opposition.
The list of regulatory mistakes and misjudgments is long, and the cost to taxpayers and our economy is staggering.
The SEC relaxed leverage standards on Wall Street. The Offices of Thrift Supervision and the Comptroller of the Currency preempted state efforts to protect homebuyers from predatory lending. And the Justice Department slashed its efforts to prosecute white-collar fraud.
Congress is not exempt from responsibility. We passed legislation in 2000 that exempted financial derivatives from regulation, and we took too long — until earlier this year — to pass legislation strengthening oversight of Fannie Mae and Freddie Mac.
Over and over again ideology trumped governance. Our regulators became enablers rather than the enforcers. Their trust in the wisdom of the markets was infinite. The mantra became government regulation is wrong. The market is infallible.
Today’s hearing is the fourth in a series led by Waxman. Previous torturees included Lehman Bros., AIG, and the credit ratings agencies. On the hot seat today: former Federal Reserve Chairman Alan Greenspan, former Treasury Secretary John Snow, and current SEC Chairman Christopher Cox. Stay tuned to How the World Works for regular updates throughout today mocking their lame attempts to defend themselves.
More Related Stories
- Voting is not a right
- Destroying the planet for record profits
- Ahead of Obama's speech, U.S. acknowledges four American drone killings
- Pic of the day: Barack Obama at prom
- Anti-Islam backlash in London after machete attack
- Must-see morning clip: Bill O'Reilly visits "The Daily Show"
- Obama’s drone speech will probably be maddening
- Boehner: "Inconceivable" Obama didn't know about IRS targeting
- Obama to announce new effort to close Guantanamo Bay
- House supporters of KXL received $56m from fossil fuel industry
- Judge tells lesbian couple to separate -- or lose kids
- Obama to address drones, Guantánamo
- If Alex Pareene were a cable news executive...
- Portland's senseless war on fluoride
- Graphic video reportedly shows possible London machete attack suspect
- What economists get wrong about the jobs crisis
- Ted Cruz: "I don't trust the Republicans"
- Pa. governor "can't find" any Latinos to work in his administration
- Glenn Beck: "The American people have just been raped"
- "Original Coca-Cola had a very small amount of cocaine"
- Corporations accused of wrongdoing win battle to keep identities secret
Featured Slide Shows
The week in 10 picsclose X
- 1 of 11
Lisa Montgomery embraces her nephew Thursday after a tornado tore apart her home in Cleburne, Texas. The twister killed six people and destroyed entire swaths of the North Texas town.
Credit: AP/LM Otero
Jack McMahon, the defense attorney for abortion doctor Kermit Gosnell, speaks outside the Criminal Justice Center in Philadelphia Tuesday. His client was convicted of killing three babies in his clinic, and will serve multiple life sentences.
Credit: AP/Matt Rourke
A photo taken Monday captures Vice President Joe Biden's response to a Milwaukee second-grader's innovative proposal to end America's epidemic of gun violence. This guy!
Credit: AP/Jenny Aicher
Sen. Rand Paul, R-Ky., flanked by a grouper-eyed Michele Bachmann, addresses the IRS' admission that it targeted Tea Party groups in advance of the 2012 election. In an op-ed for CNN Thursday, the Kentucky senator slammed the president for his faux outrage.
Credit: AP/Molly Riley
Ousted IRS chief Steven Miller is sworn in on Capitol Hill Friday. Miller testified before the House Ways and Means Committee on the extra scrutiny the agency gave conservative groups applying for tax-exempt status.
Credit: AP/J. Scott Applewhite
Attorney General Eric Holder pauses as he testifies on Capitol Hill before the House Judiciary Committee Wednesday. Holder is under fire, among other things, for the Justice Department's gathering of phone records at the Associated Press.
Credit: AP/Carolyn Kaster
O.J. Simpson sits during an evidentiary hearing at Clark County District Court in Las Vegas, Nev., Thursday. Simpson, who is currently serving a nine-to-33-year sentence in state prison for armed robbery and kidnapping, is using a writ of habeas corpus to seek a new trial.
Credit: AP/Las Vegas Review-Journal/Jeff Scheid
Major Tom to ground control: On Sunday astronaut Chris Hadfield recorded the first music video from space, a cover of David Bowie's "Space Oddity."
Credit: AP/NASA/Chris Hadfield
When it rains it pours. President Barack Obama speaks during a news conference Thursday with Turkish Prime Minister Recep Tayyip Erdogan, inexplicably inspiring an #umbrellagate Twitter meme.
Credit: AP/Jacquelyn Martin
A smoke plume rises high above a road block at the intersection of County A and Ross Road east of Solon Springs, Wis., Tuesday. No injuries were reported, but the the wildfire caused evacuations across northwestern Wisconsin.
Credit: AP/The Duluth News-Tribune/Clint Austin
Recent Slide Shows
- 1 of 11