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Peter J. Wallison

Peter J. Wallison

Posted: December 22, 2010 10:00 AM

If It's Incredible, Don't Believe It

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Only in the fever-swamps of the left could anyone believe that the Republicans on the FCIC sought to "ban" the words "Wall Street," "shadow banking," "interconnection," and "deregulation" from the commission's report.

The drafts of the report we saw used the term "Wall Street" to apply to Countrywide Financial, the notorious subprime lender; it used the term "shadow banking" to apply to any financial institution, including insurance companies, hedge funds, and securities firms; and so on. You get the point.

What we were asking for was precision in the use of these words, so that when the words "Wall Street" were used they referred to the major commercial and investment banks that were underwriters for the private label securities that the commission majority's report discusses.

What we were told, in the case of "Wall Street" is that it's a general term for the financial system and thus could in fact include a subprime lender like Countrywide, based in California.

Maybe this was changed in subsequent drafts of the report, maybe it was not, but using the term Wall Street to describe the financial system generally is -- most objective observers would conclude -- a political statement rather than an accurate one. You decide.

Incidentally, what was released last week was not our "report." It was a statement of the issues as we saw them on the date when the statute that set up the commission had specified that the commission -- which was not ready on that date -- was supposed to issue its report. When the commission's report is finally available, it will have a full response from the minority. This full response, however, will not be included in the commercially published book on the commission's report. For that book, minority reports and dissents, which probably total over 55,000 words, were limited by the majority to 9 pages (or 4050 words) for each of the four of us. It should shock those who have been so loudly denouncing the Republicans to learn that Republicans' alternative views will not be fully included in the book that will be in all the bookstores in the U.S. on the date the report is released. We'll all be interested to see whether the advocates for free speech are as loud in condemning that as they have been in circulating misleading statements about what the Republicans want to ban from the majority's report.