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Sacrificing Microcredit for Megaprofits
Click Here for Editorial by Mahammad Yunnus, Founder of Grameen Bank & Recipient of The Nobel Peace Prize in 2006
Monetary Matters Continued:
Republicans on Financial Crisis Committee Issue Dissent From the Panel's ReportWASHINGTON — The government commission’s account of what caused the 2008 financial crisis offers a broad indictment of regulatory weakness, Wall Street avarice and corporate incompetence. But that narrative is competing with alternative views by the Republicans on the panel, who released their dissenting reports on Wednesday.
The main report, a 576-page paperback due in bookstores Thursday and titled “The Financial Crisis Inquiry Report,” offers ample ammunition for critics of Wall Street.
It cites “pervasive permissiveness” by regulators, “dramatic failures of corporate governance and risk management,” and “a systemic breakdown in accountability and ethics.”
It compares the financial system before the crisis with “a highway where there were neither speed limits nor neatly painted lines.” And it finds fault with the deregulatory orthodoxies of the last 30 years, saying of regulators, “The sentries were not at their posts, in no small part due to the widely accepted faith in the self-correcting nature of the markets and the ability of financial institutions to effectively police themselves.”
But that analysis is “too broad,” according to three Republican commission members: Bill Thomas, a former congressman from California and the vice chairman of the commission; Keith Hennessey, who was an economic adviser to President George W. Bush; and Douglas Holtz-Eakin, a former director of the Congressional Budget Office.
In a 25-page dissent, the three Republicans say the Democratic report “is more an account of bad events than a focused explanation of what happened and why. When everything is important, nothing is.”
The three men say that some of the majority report’s culprits — excessive political influence of Wall Street, a deregulatory ideology and a flawed regulatory structure — fail to account for the failure of financial institutions in Europe.
“By focusing too narrowly on U.S. regulatory policy and supervision, ignoring international parallels, emphasizing only arguments for greater regulation, failing to prioritize the causes and failing to distinguish sufficiently between causes and effects, the majority’s report is unbalanced and leads to incorrect conclusions,” Republican congressional commission members allege.
The dissent also suggests that the Democrats were too quick to blame exotic financial instruments, like over-the-counter derivatives and collateralized debt obligations. The problem was not the instruments themselves, but a failure to use them appropriately, Republican congressional commission members also allege.
Click Here For Complete Article by Sewell Chan
More: Recommended Reading -
The Quants: How a New Breed of Math Whizzes Conquered Wall Street and Nearly Destroyed It by Scott Patterson
Bonus Round:
Hacker smacks Zuck right in the Facebook
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And Finally, One For The Road
RIP Gladys Horton of the Marvelettes