The Excruciating Lack of Financial Reform

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The Excruciating Lack of Financial Reform
by: Rortybomb March 16, 2010 | about: AGG / IYF / KBE / LEHMQ.PK / SPY


I’m still going through the Dodd Bill.

So: The Lehman (LEHMQ.PK) Report.

1. First of all, why don’t we take the rest of the money for the FCIC (“Financial Crisis Inquiry Commission”) and just give it to Jenner & Block to keep investigating and writing? Their 9 volume study of what went wrong at the NY Fed and Lehman is our crisis’ Pecora Commission. People should be reading this and getting pissed off.

James Kwak has an overview. Like Ryan Chittum, I’m amazed at how well the blogosphere is covering it and the mainstream media is not.

2. One thing that I’m finding surprising is that the President and the Treasury Secretary aren’t out there beating the hell out of this story. For financial reformers, this report should be like a “Get 2 Free Financial Reforms” monopoly-style card falling out of the sky. Why isn’t the administration thumping the hell out of this story?

I remember when Anthem Blue Cross Blue Shield decided to raise rates 39% in the middle of a recession and Obama immediately got on the point that this is exactly why we need comprehensive health care reform. I remember thinking at the time “If a giant scandal blows up in the financial sector, I bet he’ll go equally as hard as to why this proves we need comprehensive financial reform.”

Oddly, that isn’t happening. Senator Ted Kaufman is giving a speech today about how this fraud calls for tougher regulation, which is fantastic. Why isn’t the administration?

3. I’ll go ahead and ask: Is Geithner implicitly recusing himself? Is he a material witness here? Why isn’t he out there screaming at every reporter and Sunday morning talk show he can find, “see, this is exactly why we need to pass a strong bill." How much does his oversight of the NY Fed compromise him from using this scandal as a means to explain to ordinary Americans how dysfunctional and corrupt the culture of Wall Street has gotten? Randall Wray explores how much Geithner knew and what he did. Given the scrutiny, it makes perfect sense for Geithner to keep his mouth shut on this, even though this is the perfect moment in financial reform for him to yell from the rooftops about this.

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