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Pelosi to push for Pecora Commission-style inquiry

Following through on her commitment last week at the Commonwealth Club, Pelosi moves to schedule hearings:

Wall Street may be heading for the deepest investigation of its practices since a congressional panel’s probe of abuses following the 1929 stock market crash.

House Speaker Nancy Pelosi plans to push for a comprehensive inquiry, saying that three-quarters of Americans want to know what led to the bankruptcy of Lehman Brothers Holdings Inc. and the collapse of Bear Stearns Cos. and Merrill Lynch & Co. She favors one patterned after Senate Banking Committee hearings led by Ferdinand Pecora starting in 1933, according to her spokesman, Nadeam Elshami.

The Pecora review “was probably the single most important congressional investigation in the history of our country, except perhaps the Watergate hearings,” Donald Ritchie, associate historian for the U.S. Senate, said in an interview.

I never thought I'd use the words "predictably lame" and "Barney Frank" in the same sentence, but The Big Disappointer, er, does not disappoint: Barney Frank's response is predictably lame:

Pelosi, a California Democrat, will speak about hearings this week to lawmakers, including Representative Barney Frank, chairman of the panel that writes banking law, Elshami said.

“I think it’s useful to have it, but that should not be a reason to hold off on legislating,” Frank, a Massachusetts Democrat, said of Pelosi’s proposal after a speech in Washington yesterday.

Who does Frank think he is? The Red King in Alice in Wonderland? "Sentence first, verdict afterward"? I mean, isn't it barely possible that the results of the Pecora Commission might impact legislation?

NOTE I've chewed on Leader Nance's ankles before, gawd knows. If she'd left Bush's impeachment on the table in 2006, I bet we'd be in better shape today. That said, this is a good move. And if it's citizen outrage and activism that caused it, so much the fucking better.

UPDATE For more on the Pecora Commission in contemporary discourse, see the tag.

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bringiton's picture
Submitted by bringiton on

Reading tea leaves a bit, to be sure, but the Bloomberg quote was just one sentence so I assume it is truncated from some longer exposition - Barney will go on, most of the time, for much more than a sentence or two.

He's been lobbying openly since last spring for some basic legislation that pretty much everyone left of James Imhoff agrees needs doing, including but not limited to a reimplementation of Glass-Steagal-ish constraints with a modern slant, to deal effectively with modern banking and financial instruments. He's also been exploring means by which some form of anti-trust limitations can be placed on financial institutions in general, so the the concept of individual institutions being "too big to fail" goes away. This reported statement is consistent with his existing positions.

After a dozen years of intertwined complexity built up in large part to thwart such efforts, this will not be an easy thing to do. Whatever gets done will require staged implementation, and the divvying up of assets will leave huge opportunities for more corruption and financial legerdemane. Hearings, assessing of competing proposals, and critical analysis will take a great deal of effort and time.

Frank's point, and I think it is a valid one, is that we don't need to wait for a full and complete inquiry into exactly what went wrong - one that may take a couple of years - to begin doing the obvious things that will inevitably need doing anyway. Whatever emerges from the new commission should, of course, guide further legislation but waiting to act in any way at all has dangers of its own that can be at least ameliorated by moving forward on basic matters. The two processes can occur in parallel, and IMHO they should.

Part of this, it must be admitted, is a turf battle. Pelosi wants to create a new subcommittee to be the oversight agent for this investigation, one whose composition she will completely control free of seniority or other constraints, and Frank does not want to see his own power diminished as a result. Thus, he is staking out his own turf in advance of whatever Pelosi decides to do. Politics, being played by politicians.

Both of these things, starting a full-on investigation and moving forward with new preventive legislation, are good.

[Full disclosure, I'm not as dismayed as others are with Barney Frank. In my book he is one of the good people, and nothing in this financial fiasco has swayed me away from that opinion.]

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Damon's picture
Submitted by Damon on

It's something a bit more than disappointing to see Dodd and Frank working (if even tangentially) for Big Money leaving it to someone like the intolerable and insufferable Shelby of TN to look like the populist, on this. I hate that the Dems are ceding this ground to them.

Good on Pelosi, and good on DiFi for taking up where the president has checked out on the torture issue.