POLITICS

Brooksley Born Said A Bunch Of Stuff That Actually Made A Lot Of Sense About Banking Regulation

04/04/2013 03:34 pm ET | Updated Apr 08, 2013

In a landmark event that went largely unremarked upon by cable news providers and newspaper front pages, someone in Washington, D.C., spent time saying things to reporters that actually made sense.

That person? Brooksley Born, former head of the Commodity Futures Trading Commission (CFTC) during the Clinton administration. According to Ian Katz of Bloomberg News, some of the things she said out loud that made sense included the contention that big banks should be “tasked with the job of deciding how best to split themselves up” and that “there should be rules imposed, perhaps something like Glass-Steagall.”

This was just the beginning of an extended jag of saying things aloud that were compatible with the traditional notions of logic. "The Glass-Steagall Act, before it began to be eroded by the bank regulators, was a good idea, and the financial system was protected by that,” Born said. She then opined that the big banks currently "have too much political power and too much money to be sufficiently capable of being managed, of being supervised and regulated, and of being permitted to fail,” in a dazzling, rarely-seen-in-Washington demonstration of stringing sentences together that do not contain ideas that are intrinsically foolish.

But Born was not done turning a symposium sponsored by Public Citizen for the organization's upcoming book, Reality Check: The Forgotten Lessons of Deregulation and Unsung Successes of Sensible Safeguards, into a veritable Cirque Du Soleil of sense-making. She pointed out that "despite the efforts in Dodd-Frank to make sure that we don’t bail out one of these major institutions, I think we would have to if they started to fail.”

By "we" she meant "American taxpayers," who provided trillions of dollars to big banks during the 2008 financial crash, with which those big banks bought lobbyists to help ensure that Dodd-Frank would be of limited utility to prevent future financial crises, and subsequent trillion-dollar taxpayer bailouts.

During her time as the head of the CFTC, Born was a lonely voice in Washington, routinely saying things like, hey, we should probably rigorously regulate this derivatives market, so that it doesn't result in some epic economic cock-up sometime a few years from now. You know, stuff like that. I am paraphrasing. As Matt Taibbi famously recalled, Born's efforts earned her the denunciation of Clinton-era Treasury Secretary Robert Rubin, who subsequently -- and over Born's strenuous objections -- went on to lead the legislative gobemouches of that era to pass the Commodity Futures Modernization Act.

To properly visualize the "modernization" of "commodity futures," just imagine Lehman Brothers collapsing in a wet, sad heap of incompetence and the ensuing financial sector collapse that sent sent billions of dollars of wealth to "money heaven," running forever and ever on a loop on a television that is being repeatedly thrown at your head.

Oh, look: It seems that former SIGTARP director Neil Barofsky was also on this panel, saying things that made sense as well, like the fact that the "financial services industry" is currently engaged in an effort to convince lawmakers that "any type of financial regulation will destroy the world" using the sort of "tired, invalid, disproven arguments" that are far more commonly spoken aloud in Washington, to reporters.

So that's two people who were in Washington yesterday, saying things that were not, objectively speaking, a hot sack of horse leavings. Sorry. I buried the lede. I am not used to observing these activities in nature.

What are the implications of having people in Washington saying things that are actually sensible, aloud in public, where just anyone can hear them and write them down? I suppose there is a chance now that this is the start of a trend that might catch on, but, haha, not really.

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