Monday, January 31, 2011
Republicans Being Ruthless
Paul Krugman has some very strong words for a new incident of the same old Republican ruthlessness we’ve seen before.
Inquiry and Intimidation
”I haven’t seen this reported elsewhere — but Republicans in Congress are planning to investigate the Financial Crisis Inquiry Commission, looking for evidence of corruption and wrongdoing.
It’s absurd, of course: a tiny commission with a small budget didn’t offer much scope for corruption.”
”What the GOP wants is to make people afraid even to do research that produces conclusions they don’t like. ”
It is typical Krugman -- short, sharp and straight to the point. I don’t want to quote the whole post and you need to read every single word. Click on it.
I have no reason to doubt Professor Krugman, but just to show you I do check on these things, I found this at The Atlantic while I was researching the subject.
FCIC: The Private Sector Failed
”But these assessments ignored a fundamental agreement among nine of the 10 members -- a source of the report's continuing importance. The bipartisan commissioners emphatically concluded that one of the primary causes of the meltdown was massive failure of private sector decision-making, especially in major financial institutions. ”
”The conclusion about massive private sector failure is summed up in a quote from JP Morgan's CEO Jamie Dimon who, when reflecting on the causes of the crisis, told the Commission: "I blame the management teams 100% and no one else."”
”Whatever one's views on the failures of Federal Reserve, the ineffectiveness of other regulators, the poor performance of the credit rating agencies, the mindless cheerleading of business media and certain short-term shareholders or the promotion of affordable housing as national policy, no one made the boards and business leaders of the major private institutions -- Merrill Lynch, Citigroup, Bear Stearns, Lehman Brothers, AIG, Goldman Sachs, Morgan Stanley, Bank of America, Washington Mutual, Countrywide et al -- take a self-destructive course on the most fundamental decision businesses make: how to allocate capital and under what conditions.”
The private sector failed. They failed to properly “allocate capital”. The private sector failed to “manage risk”. The private sector failed to protect the capital of their investors.
The private sector -- aided and abetted by the Republican Party and (in some cases) the Democratic Party -- did succeed in killing and crippling regulation and in co-opting the regulators. And they paid themselves handsomely for their massive failure.
January 31, 2011