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Peter J. Wallison Headshot

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.