Financial Truth Commission - something to tweet about

Danny Townsend, a Yale senior, explains why young people care about having a rigorous Financial Crisis Inquiry Commission.

The news isn’t that new: young people are getting hammered by the recession. While people of all generations have been suffering the pains of cut paychecks, layoffs, furloughs, and otherwise having their careers and lives put on hold, the youngest members of the work force are feeling like they might never make it out of the starting gate. No matter where you stand in the bracket of 16-25-year-olds, prospects are dim. Thinking of higher education? Enjoy the prospect of rising tuition, diminishing financial aid and the elimination of entire academic programs, like in the California public school system. Already in school? If you can find a job, chances are you’ll earn up to 10 percent less in your career over the next ten years. And if you’re just looking for work, good luck – our age group, which is only 15 percent of the population, represents about one-third of the unemployed.

One thing is for certain: if we’re going to put in more and more time and energy into our careers and education, we’d like to do so with some realistic hope about our futures. In the short run, that means less unemployment and better ways to finance new education and old debt. In the long run, though, hope depends not only on a return to macroeconomic business-as-usual but also on an understanding of how the current crisis came to be – and how it can be prevented from happening again.

That’s where the Pecora II Commission comes in. Technically the Financial Crisis Inquiry Commission, the FCIC has been dubbed “Pecora II” in reference to the investigation set up in the early 1930s to establish the causes of the Great Depression. The findings and implications of the original investigation, named after the strong-willed and thorough attorney Ferdinand Pecora, formed the basis for watershed financial developments such as the creation of the FDIC, the establishment of the Securities and Exchange Commission, and the passing of the Glass-Steagall Act (the repeal of which has been cited by some as a contributing factor to events leading to the current recession). The FCIC is supposed to get to the bottom of what caused the crisis.

The findings of such an inquiry could obviously be of tremendous value for the future of the U.S. economy. But there are already problems with the process – partisan fights over how the commission will be allowed to operate. And while partisan fights are nothing new for the Federal government, they can be particularly lethal to a commission that is designed to make impartial findings in a highly politically sensitive topic.

That’s why the Roosevelt Institute has launched an open letter and petition drive directed at the commission. The letter asks for some commonsense measures to ensure the commission’s efficacy and credibility – appointing a single independent investigator with an ample budget, the ability to hire and fire staff, and the authority to subpoena relevant witnesses.   The current signatories include some pretty big luminaries – from Nobel prize-winning economist Joseph Stiglitz to former Secretary of Labor Rob Reich. And you could be next.

For all of our less-than-stellar economic indicators, one thing our generation has going for us is political momentum. So if you’re inclined, tweet, post, digg, etc the letter to spread the word. This commission isn’t just a one-time political cause; the findings of Pecora I resulted in policies and institutions that continue to shape the economy over 70 years later. Young people, then, have the most at stake. It’s time to let the Financial Crisis Inquiry Commission know that we know this: the foundation of future policy depends on an impartial, thorough accounting of the past.

Danny Townsend is a senior at Yale University and a senior fellow with the Roosevelt Institution.