What Congress Did Not Want You to Read: Robert Johnson’s Testimony on OTC Derivative Market
Saturday, 11/7/2009 - 9:33 am by Lynn Parramore | 10 Comments*Due to continued interest the Johnson testimony, I have reposted the following:
Robert Johnson, Director of Financial Reform for the Roosevelt Institute, submitted his testimony in early October to the Committee on Financial Services as part of the hearing on reform of the over-the-counter derivatives market. Johnson’s hard-hitting analysis of the potentially catastrophic faults in our financial system runs counter to a troubling trend of failing to address risk that has plagued the Committee’s.
Johnson has grave concerns about loophole-riddled bill currently under review, describing it to me in a recent conversation as “Swiss Cheese.” In his view, regulation of the “reckless” OTC derivatives market is crucial as its impact is so broad, forming “the very fabric of our financial system.”
There has been a disturbing trend of attempts to silence voices like Johnson’s. His original in-person testimony before the Committee was shut down after an outrageous five minutes by Melissa Bean, while industry players spoke at length. Johnson was forced to submit his full testimony in written form, but my attempts to have it published on the House website were met with a number of implausible excuses by staffers. Ken Silverstein reported the story of what appeared to be deliberate suppression on the Harper’s Magazine website. Finally, amid a growing storm of outrage, the House added the testimony to its website.
Click here to read full text: Rob Johnson Testimony.
*For further reading on the dangers of relying on clearinghouses to remedy credit default swaps, see “The Fantasy of the Clearing House Magic Bullet” on Naked Capitalism.
**And please send the link to the post to as many people as possible!
You forgot a VERY important detail. As related by Yves Smith of Naked Capitalism, Congresswoman Bean was not satisfied with silencing Rob Johnson: She made sure his written testimony would not be part of the record:
“So what happens next? >The House Financial Services Committee *has refused to publish his testimony*, offering “the dog ate my homework” level excuses, first that they hadn’t gotten it, then that it was in the wrong format, then that their IT department was experiencing difficulties (always a good one when real reasons are running thin). The last one was pure Catch-22: that he had gotten his written testimony in too late.”
http://www.nakedcapitalism.com/2009/10/bank-favoring-censorship-in-government.html
Posted by Francois Theberge | October 29th, 2009 at 10:58 pm
Historically, Congress lends a deaf ear to anyone uttering truths,
simply because such recognition would destroy the Federal Reserve’s Fiat Money System and the Congress itself.
Besides, there is nothing more important to Congress than protecting its turf as it collectively and forever chases the false god called money.
Bankers refuse to face the fact (Publically at least) that the International Derivative Market all by itself, can and will collapse the entire Fiat System.
Wayne B. Ex-Banker who saw the light in 1976.
Posted by Wayne Blanchard | October 30th, 2009 at 7:34 am
Why isn’t this story front page news?
Posted by Fausto | October 30th, 2009 at 8:31 am
Shameful conduct! These people should never be re-elected and possibly put in jail…
They can only hide from the truth for so long before Americans get their pitch forks out and take them to the guillotines!
If they don’t stop these abuses…there will be another “economic downturn”…the next time…there won’t be enough money in the world to prevent our collapse!
Posted by Gerri | October 30th, 2009 at 8:41 am
After reading Garet Garett’s “The People’s Pottage”, I would change your name from New Deal 2.0 to something else, anything else! We do not need any more new deals! We need a square deal, honest, and realistic.
Posted by wethepeeple | October 30th, 2009 at 1:32 pm
shoot them all but sis or eight, we will need pallbearers
Posted by hugh | November 4th, 2009 at 1:45 pm
Will the real leader please stand up.
There are ten million Americans waiting for someone to give us a date to march on Washington.
We need publicly funded campaigns. Insist that your legislators support HR1826 and Senate bill S752; the Fair Elections Now Act. It is a bipartisan bill that eliminates corporate funding of election campaigns.
It was introduced in the House by U.S. Reps. David Price(D-NC) and Brad Miller(D-NC) and Rep. Walter Jones(R-NC) and in the Senate by Sen. Richard Durbin (D-IL). It has over 100 co sponsers in the House and 5 in the Senate. It languishes in comittee in both House and Senate. It won’t again see the light of day if we don’t act.
Will it stop the corporate oligarchy? No. Of course not. Greed and avarice will always find a way to corrupt. But, it will slow them down and transparent lobbying is another battle.
Will the real leader please stand up!!!
Posted by George M | November 8th, 2009 at 11:54 am
Francois - this story was originally posted before we knew that the House would not put the testimony up on its website. I subsequently posted a story about the suppression of the written testimony and added language to this original post to reflect that update, Indeed, I the person who was calling House staffers to try to get them to post the testimony. It was the Roosevelt Institute - my colleagues Rob Johnson and Tom Ferguson in particular — who pushed to make this story news, and you’ll see that I am quoted in the Harper’s story by Ken Silverstein, who broke this in the mainstream press. So, to your point, it is very important to recognize the extent to which critical voices are being silenced. Thanks for reading, and I hope you’ll pass the link along. Best, Lynn Parramore (Editor, New Deal 2.0)
Posted by FERI | November 8th, 2009 at 4:53 pm
As of now, the testimony is on the Oct 7 hearing website. It appears to be word-for-word identical to the revised testimony here at New Deal 2.0.
Perhaps it was just added?
Posted by Dave Hanson | November 9th, 2009 at 12:14 am
Hi Dave - yes, that is correct. We just got a ‘mea culpa’ message from Barney Frank! Lynn
Posted by FERI | November 9th, 2009 at 9:31 am