Alas, it didn't come as much of a surprise. But after over a year of hearings and committee meetings, Republican members of the Financial Crisis Inquiry Commission (FCIC) wasted tax-payer money and ran interference on behalf of the financial services industry. In place of thoughtful analysis, these commission members dished out a shameful nine page report outlining causes of the financial crisis.
The report does not contain hard data; much in the way of analysis; and it has grand total of three footnotes.
Not surprisingly the large firms and the industry that profited the most from the crisis gets a pass with the blame being put squarely on the usual suspects in the conservative narrative: Fannie and Freddie and the Community Reinvestment Act (read the government).
Of course, no one could have seen the thing coming:
Put simply, the risk of the housing collapse was simply not appreciated. Not by homeowners, not by investors, not by banks, and not by regulators.
Maybe these guys didn't see it coming in August 4, 2008:
But fears of a huge loss in home values for most homeowners -- and especially for middle-income homeowners -- across the United States, and fears of the devastating losses by financial institutions that would accompany them, are greatly overblown.
But this guy, and this guy, and many others did. Yet these GOP members don't bother to seriously engage the critiques that these economist put forward in anticipation of a crisis.
Mike Konczal at RortyBomb, as usual, says it well:
My academic side: If the four of them brought this to my office hours I’d advise them to take an incomplete for the class and turn in the paper next semester in January. The paper is 9 pages, and about 5,000 words. There are almost no hard numbers. There are only three citations. Everything here was in the popular narrative a year and a half ago. This was supposed to be original research.
Contrast this with the detailed 400-page report from the Pecora Commission in 1934 detailing the causes of the financial crisis that triggered the Great Depression.
This performance by the Republican members is not surprising, and I suspect if these members were capable of shame, they might have some embarrassment about their contribution to the public debate. What gets me is that these guys weren't even trying. They had an opportunity to participate in a significant historical survey and to help set the record straight on one of the largest financial sector calamities in U.S. history. Instead they dished out the kind of hack work that one might expect from a conservative think-tank. Did they even spend 8 hours putting this report together?
What's equally shameful is the reported efforts by these Commission members to omit any mention of the multi-trillion dollar shadow banking industry.
As reported in the HuffingtonPost:
During a private commission meeting last week, all four Republicans voted in favor of banning the phrases "Wall Street" and "shadow banking" and the words "interconnection" and "deregulation" from the panel's final report, according to a person familiar with the matter and confirmed by Brooksley E. Born, one of the six commissioners who voted against the proposal.
Once again, this isn't surprising, but on some level it is still a sad statement about the political state of affairs. Even if the Republican members had a radically different take on the causes of the financial crisis, one would at least hope that they would argue their case on the basis of evidence and merits. A 9-page document with three footnotes and almost no data is pretty darn close to an admission that they have no basis for their views.
No doubt these hacks will be rewarded for their craptacular work by those in the financial services industry who cashed in on this monumental crisis. In the real economy that most of us live and work in, the kind of effort and analysis put forth by these four committee members would have merited a pink slip and a trip to a local unemployment office. We'd have a very hard time finding work in the same profession ever again.
Alas, Wall Street and much of Washington operate by a different set of rules with almost no accountability.
Hopefully the mainstream press treats this b.s. contribution by the GOP committee members for exactly what it is. Sadly, that's probably asking for too much.