Pecora Commission 2.0? Calling Patrick Fitzgerald…
Thursday, 06/18/2009 - 5:28 pm by Marshall Auerback | 3 Comments
What would be truly useful for Summers, Geithner, Obama, etc., as we grapple with the challenges of further financial reform would be a real Pecora Commission which actually got to the bottom of where we messed up and why. Of course, I expect no such thing because a truly effective Pecora Commission would implicate too many people, both in DC and on Wall Street. So what Speaker Pelosi has advocated is bound to be a whitewash.
People forget, but Pecora was actually the 4th person to get at the bottom of what happened on Wall Street during the 1929 Crash and the subsequent economic fall-out. Before him, two chief counsels were fired for ineffectiveness, and a third resigned after the committee refused to give him broad subpoena power. In January 1933, Ferdinand Pecora, an assistant district attorney for New York County was hired to write the final report. Discovering that the investigation was incomplete, Pecora requested permission to hold an additional month of hearings. His expose of the National City Bank (now Citibank) made banner headlines and caused the bank’s president to resign. Democrats had won the majority in the Senate, and the new President, Franklin D. Roosevelt, urged the new Democratic chairman of the Banking Committee, Senator Duncan U. Fletcher, to let Pecora continue the probe. So actively did Pecora pursue the investigation that his name became publicly identified with it, rather than the committee’s chairman.
Of course, Wall Street fought the commission tooth and nail and it took a mere 25% unemployment rate and the worst economic depression of the 20th century to discredit the financial community sufficiently and ensure that a worthwhile set of reforms emerged - reforms which created a stable framework for the financial system for decades. We call this web site “New Deal 2.0″ in the hopes of channeling the spirit and concomitant success of the first New Deal. Do we really need to experience something of a comparable magnitude to the Great Depression before sensible financial reform takes place?
In the spirit of New Deal 2.0, let me propose a worthy investigator to handle “Pecora Commission 2.0″: US Attorney Patrick Fitzgerald of Valerie Plame and Rod Blagojevich fame.
Braintruster Marshall Auerback is a market analyst and commentator.
Notice what arm of government this came out of.
I think reliance on the Obama Administration to put through meaningful reform is bound to be disappointed if the other arm of government doesn’t ratchet up the temperature through hearings and other forms of investigation.
Posted by leo | June 21st, 2009 at 11:44 am
The comment facility appears not to be working.
I left a comment yesterday on your earlier piece on plans between the Soviet planned economy and contemporary U.S. capitalism. Although your peice is described as having ‘4 comments’, no comments are visible. Similarly. this post is described as having ‘2 comments’ but none are visible.
Posted by David Habakkuk | June 25th, 2009 at 1:36 am
Fitzgerald is fine, but in the spirit of bipartisanship, perhaps there should be a co-chair? Like Eliot Spitzer.
It’s not like there isn’t enough to do to keep both of them busy.
Posted by Benedict@Large | June 27th, 2009 at 12:46 am