On the Value of Circuses

A few days ago, the investigative panel was finalized for the bipartisan committee charged with investigating the causes of the financial collapse. Expectations are high. The new panel has already been compared to the Senate subcommittee that investigated the 1929 crash. That celebrated investigative body, known as the Pecora Committee after its magnetic investigating attorney, exposed all kinds of legal, but damned sneaky, goings-on and gettings-up-to on Wall Street.

Is our new commission, composed mainly of politicians and chaired by *choke* the former Treasurer of California (Phil Angelides), up to the job? Can a panel with only two people who know anything about derivatives (Brooksley Born and Heather Murren) really untangle what happened to AIG? Can a committee that features Bill Thomas twice voted meanest Senator in Washington ever agree on anything?

The answer, in my opinion, is that it doesn't matter. The much-lauded Pecora Committee wasn't a serious investigation - it was a circus (complete with little people). It was representative democrary in action: the subcommittee, chaired by a guy who was born in a "dug out" in the Dakota Territory, allowed representative ordinary people a forum to humiliate Wall Street bankers.

The '33 Act and the '34 Act were written by legal scholars, but the scholars got the opportuntity to write the law they wanted because the Pecora Committee kept Wall Street notorious. A string of headlines about bank presidents not paying taxes, or giving out plum stock offerings for free to their pals, kept people mad enough to support the strong regulation that resulted.

We need better reform than has been proposed by the administration. The new commission can help us get there by keeping up the parade of shifty bankers and little old ladies who've lost everything.