There have been some good pieces out in the last few days by Dean Baker and Bob Kuttner on the politics of a modern version of the 1930s Pecora Commission on what happened to cause the Great Depression. The original Pecora Commission was an essential reason why FDR was able to be so successful in enacting sweeping New Deal programs to regulate the banks and stock speculators that had caused the crash. As Dean and Bob allude to, the modern version might not be so effective, but that's all up to Speaker Pelosi, Senator Reid, and (indirectly) the Obama administration. What I'm guessing that Dean and Bob are reacting to is the same rumors that I'm hearing: that Brooksley Born may be the only real progressive on financial issues appointed to the commission.
That would be a tragedy. A strong commission with subpoena powers and a serious mandate from Congress could really dig into the dirty deeds that Wall St. traders purposed that caused this crash. The education of the media and the public that could come with such an investigation would be invaluable. If instead you appoint a commission where a majority of members want to obscure what happened, and in fact want to protect the Wall St. system we have now, you both lose any chance of engaging the public and you make the people angry at both government and the bankers all the more suspicious.
I have said to my friends in the White House over and over again what to me is a plain and obvious truth: another year of economic pain, and a majority of the country is going to be spittin' mad. The only question is whether they are mad at the bankers and de-regulators who caused this mess, or mad at the Obama administration for not doing enough to solve it.
President Obama told Wall Street CEOs awhile back that he was the only thing that stood between them and pitchforks. As a person who has been involved in national politics for a very long time now, I am absolutely certain about one thing regarding next year's election: if Democrats protect Wall Street from the populist "pitchforks", they will be skewered by the pitchforks themselves.
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