Why Wall Street Blew Up

I finally got my copy of the Final Report of the National Commission of the Causes of the Financial and Economic Crisis in the United States. It’s available for free on that website there (in PDF format), but I’m not about to read a 450-page document on my computer screen. (If I had an iPad, maybe.)

Since I know there’s nothing The People™ need more than my rambling commentary about this vital report, I’m happy to provide some initial thoughts as I dive in.

Born in the USA

First of all, you should know that one of the commissioners was Brooksley Born (pictured), the most important seer of financial wisdom that you’ve never heard of. As the chair of the Commodity Futures Trading Commission [CFTC] in the 1990s, she warned Alan Greenspan and others about the dangers of unregulated trading in things like Over-The-Counter [OTC] Derivatives and Credit-Default Swaps [CDS]. The CFTC started taking steps to block this reckless trading in their jurisdiction.

In response, Greenspan and some of his dumb friends urged Congress to block the CFTC’s ability to oversee these kinds of exchanges. They claimed her actions were causing investors to get nervous, and it would slow down the economy and the market would take care of itself and blah blah blah.

(Keep in mind that Greenspan once said there’s no need to combat fraud in a free market system, since the market will theoretically punish anyone who commits it. This guy was a total Ayn Rand acolyte through and through, at least until he admitted in 2008 that he “found a flaw” in his theory and “The whole intellectual edifice, however, collapsed in the summer of last year”. Scumbag.)

So Born is awesome, and her participation alone is reason enough for me to read this puppy with eager eyes and highlighter in hand. (Alas, I’ve got this thing about writing in books sometimes, and I can’t bring myself to do it. I always wonder what people will think about the things I choose to highlight. I sure think about the people who write in the used books I buy.)

Party Time

Alas, the Republic-appointed members of the commission voted along the party-line to reject the conclusions of the group. So even though the commission was supposed to bring back one report to the nation that will help us to avoid this same kind of catastrophe in the future, the right-wing free-market fundamentalists [FMFs] among us still insist that all regulation is toxic, and that we can trust Wall Street to police itself.

(It really makes me wonder what it would take. “Mr. Thomas, Wall Street sold all babies born in the month of February to aliens from Mars. Could we please pass a law to regulate baby-snatching on Wall Street?” “NO!”)

This ideological split is clearly evident in the text of the report, too. For every three paragraphs excoriating rapacious corporations for their blind profit-lust, there’s at least one sentence shaking a stern finger at poor families who tried to buy homes they couldn’t afford. (I keep imagining meetings where the FMFs are pouting, with their arms crossed, holding their breath until the sentence blaming home buyers is put back in.)

Quotes and Complaints

My favorite quote so far is in the Preface, page xx: “We had a 21st-century financial system with 19th-century safeguards.” And, of course, since Congress is shamelessly enslaved to Wall Street lobbyists: We still do.

I’m a little annoyed that I had to pay $15 for my hard copy. After all, my tax dollars paid for this report. Why isn’t each American offered a free copy!? Yeah, okay — we can get it free in PDF format. But doesn’t that just reward the rich people who own iPads and Kindles? Class warfare, that’s what it is!

And as if paying fifteen smackers isn’t enough, there’s this injustice too: “Index available online at…” WTF!? What if I need to find instantly the page where they discuss Clawback provisions, and I don’t have access to the web? What then!? (It’s page 198, by the way.)

UPDATE: Tavis Smiley and Cornel West spoke to FCIC Chair Phil Angelides this week.

TimeWaster™

Best Mayor’s name EVER!

Today I’m listening to: Watsky!

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