Post-Partisanship And Pulling Up The Roots of the Financial Meltdown (Joe Rothstein's Commentary)

September 18, 2009

By Joe Rothstein
Editor, EINNEWS.COM

I have an antidote for the death-grip partisan politics on spectacular display in Washington.

Let's declare a moratorium on political parties. Let's erase the R's and D's behind everyone's names and rearrange congressional seating in alphabetical order, so we're not seeing all the Republicans on one side and Democrats on the other. And how about instead of having majority and minority leaders we have instead a leadership council, with members elected by secret ballot, based on respect and experience---not longevity, partisanship and ability to raise campaign contributions.?

These thoughts occurred to me today as I sat in on the first meeting of the newly appointed Financial Crisis Inquiry Commission. You haven't heard of this group before. But you will. It's a congressional creation charged with the job of diagnosing the causes of the economic meltdown and prescribing remedies to head off another. Six Democrats and four Republicans were named to the commission. But when they took their seats today, these partisans left their political identities elsewhere.

There was Phil Angelides, former treasurer of California, 2006 opponent of Arnold Schwarzenegger for governor and longtime Democratic Party and liberal activist and now chairman of this new commission. In his opening remarks Angelides preached not from the gospel of political combat, but from the hymnal of public service.

There was Bill Thomas, commission vice chair, veteran of 28 years of hard-knocking political infighting in the U.S. House, a Republican so conservative he is a multiple recipient of the Golden Bulldog award by the National Tax Limitation Committee. Thomas acknowledged that the commission had been born of congressional politics but said, “You can sulk about your birth or get on with your life. And frankly, this commission's life is very, very important."

There was former U.S. Senator Bob Graham of Florida, acknowledging that people's confidence in their democratic institutions “is in intensive care.” The commission needs to do what it can to restore that confidence, he said. One after another commission members joined in. Talking like real people. Talking like…… like members of the 9/11 commission who cut through so many stonewalls and actually managed to make a difference in national security.

This commission is giving early indications that it will spoil the Christmas season for those at the Federal Reserve, AIG, the too-big-to-fail banks, Fannie Mae, Freddie Mac, many brokerage houses and mortgage lenders, rating agencies, legal and accounting firms and those who were supposed to be regulating them. Angelides says the commission plans to start paying all of them calls by November with an eye toward hauling them before the TV cameras in hearings as early as December.

Will the commission be looking for fraud and abuse? That's the very first function listed in the commission charter. Excessive bonuses? Sure. To the extent they were drivers in the irresponsible behavior of leaders of the financial and mortgage industries.

As for enforcement powers, Congress gave the commission all the subpoena power it needs to demand the appearance of anyone and their documents.

The last time Congress created such a commission was during the Great Depression. That commission spared no one. Not the Rockefellers or the Morgans. Out of that commission came our present day Securities and Exchange Commission, the FDIC, and what, until recently, was a wall between those who banked for a living and those who sold securities. You can trace the removal of that wall by Congress in 1998 to much of the financial catastrophe we're now living through.

The Angelides commission sounds like a group that has read the history of its predecessor and sees the tough non-partisanship of the 9/11 commission as its working model.

While the commission has until December 2010 to complete its work, it is actually in a race for relevance with Congress. Barney Frank's House Financial Services Committee has an early date to take up a White House plan for a new consumer financial protection agency. There are plenty of proposals for other financial reforms sitting on the legislative back burner right behind health care reform.

And count on the legislative pot to boil over soon when AIG, Bank of America, Citibank and others begin handing out huge bonuses in the next few weeks. It was the combination of bailouts and bonuses that enraged Americans earlier this year. Does anyone think that anger has dissipated?

The Great Recession has infected the U.S. and much of the world with a deadly virus. It has left us shaken about whether public and private institutions can function effectively. The future of U.S. financial credibility, the dollar as the world's currency, and capitalism itself have all been brought into question. Tens of millions of people have lost jobs, savings, homes and businesses. Something on the order of $20 trillion in capital has been lost.

How this happened demands a thorough diagnosis. Those guilty of orchestrating this collapse must be called to account. Remedies to head off future infections have to be prescribed and put in place. None of this has happened yet.

Judging by its first meeting, the Angelides-Young Commission, sees its role as the public's best chance to ask the hard questions, demand the answers and come up with the tough remedies the situation demands. And to do it they intend to check their partisan weapons at the door.

If this actually works as promised, it should prove a valuable model for Congress itself.

(Joe Rothstein can be contacted at joe@einnews.com)