Tuesday, April 21, 2009

Financial industry legislation: Pelosi wants Pecora, Dodd wants to be done

Back in 1933, the US Senate conducted an investigation into the events that led to the market collapse of 1929. The investigating body became known as The Pecora Commission. Speaker Nancy Pelosi wants a similar body established to understand the events we're currently experiencing.

Of course, her call for such a body is unnecessary as far as I'm concerned. From the demise of Sound Money and the rise of Fiat Money, to the end of Full Reserve Banking and the ascendance of Fractional Reserve Banking... this entire mess was driven by public policy. And Nancy Pelosi is a policymaker. So I have no doubt that this commission, likely filled with other members of The Political Class, will offer no real answers. Instead, it'll place blame on bankers - who deserve some blame - and ignore the enabler:


Regardless, I do appreciate Speaker Pelosi trying to do something. And it seems she wants this investigation to be completed before any new financial legislation is passed. That's where Bloomberg News really caught my interest today.

While Pelosi and CTs own Congressman, John Larson, are calling for a full investigation - both apparently wanting it completed before passing legislation - other members of their own party seem to disagree:

Some lawmakers say passing reforms without a complete study of the credit crisis would be premature. Senator Richard Shelby of Alabama, the senior Republican on the Senate Banking Committee, made that point at a hearing on modernizing financial rules in February. He cited the Pecora hearings as the “best precedent.”

Senator Christopher Dodd, the Connecticut Democrat and committee chairman, responded: “Certainly we want to examine what happened, but also we need to move forward.”

Members of Congress may be reluctant to tackle the recommendations of such an inquiry because of financial industry donations to political campaigns, said Wall Street historian Charles Geisst.
(By Mark Pittman and Laura Litvan)

Imagine... Chris Dodd may be reluctant to tackle the recommendations of such an inquiry because of financial industry donations to his campaigns? No. Couldn't be.

Tim White

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