This morning’s must read MSM piece is over at NYRB: The Wall Street Leviathan. Jeff Madrick simultaneously reviews:
This should give you the flavor of the article:
“Dodd-Frank Act has largely pushed responsibility for writing and implementing the new rules onto existing regulators, including the Federal Reserve, the Securities and Exchange Commission, the Commodities Futures Trading Commission, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. This will likely prove a damaging flaw. These regulators are by and large the same agencies that tolerated the excessively risky behavior in the first place. Even if they write effective rules they will face pressure from Wall Street lobbyists and mostly Republican legislators to soften restrictions and eliminate some of the critical ones. If the restrictions remain intact, which is likely in view of the Democratic majority in the Senate, the question remains whether the regulators will enforce them vigorously once the economy recovers and the crisis fades in memory. Several agencies have already missed the deadlines to write new rules. Some are worried that the Consumer Financial Protection Bureau will be neutralized by Congress. Wall Street spent $2.7 billion on lobbying between 1999 and 2008 and is lobbying vigorously again…”
That is a damning indictment of a government controlled by Wall Street.
My only quibble: Madrick writes “the Financial Crisis Inquiry Commission (FCIC) is the most comprehensive indictment of the American financial failure that has yet been made.” Numerous prior works have been both comprehensive and devastating (The Big Short, The End of Wall Street, Bailout Nation). And these authors did not have an $8 million dollar budget or a huge staff.
But that’s only a quibble, and the FCIC report is a giant 576 pages of tiny print (662 pages in PDF form).
It is a beast of an article, well worth your time to read . . .
The Wall Street Leviathan
New York Review of Books, APRIL 28, 2011