Is hell freezing over?
September 26, 2008 Leave a comment
It appears at least one ideologue is beginning to realize the role he played in the current financial crisis:
Christopher Cox, the chairman of the Securities and Exchange Commission and a longtime proponent of deregulation, acknowledged on Friday that the voluntary supervisory program of Wall Street’s largest investment banks had contributed to the global financial crisis and abruptly shut the program down.
“The last six months have made it abundantly clear that voluntary regulation does not work,” Mr. Cox said in a statement. The program “was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily,” he added.
“The fact that investment bank holding companies could withdraw from this voluntary supervision at their discretion diminished the perceived mandate” of the program, and “weakened its effectiveness.”
Unfortunately, Cox is also the guy that John McCain, champion de-regulator, wants fired.
I suppose that makes sense. Admitting mistakes is not the Republican way. Ask the president, who didn’t include a single word in his speech this week to indicate that perhaps his and his party’s adherence to an ideology that has consistently failed and ruined the economy may have played a role.
They say those who forget history are doomed to repeat it and unfortunately, they are correct in this situation:
In 1999, the lawmakers adopted the Gramm-Leach-Bliley Act, which broke down the Depression-era restrictions between investment banks and commercial banks. As part of a political compromise, the law gave the commission the authority to regulate the securities and brokerage operations of the investment banks, but not their holding companies.
In 1999 the Republican-controlled congress (of which John McCain was a part) got rid of a law that was created after the Great Depression to prevent the country from ever having problems like that again.
So what happened? Shit fell apart again, that’s what happened.
And what’s the fix?
Facing the worst financial crisis since the Depression, Mr. Cox has begun in recent weeks to call for greater government involvement in the markets. He has imposed restraints on short-sellers, market speculators who borrow stock and then sell it in the hope that it will decline.
Hmm. Kind of makes you wonder why McCain wants this guy fired…
I’d like to think the laissez-faire right wing have learned their lesson this time, but unlike the Republicans, I am a student of history and history has shown that the party of corporate apologists will be back out there in no time calling for less government oversight and complaining that it’s the constant regulation that’s hampering the economy.
Let’s hope the American people’s memory is not as short-term.