[Post Summary]The sun rises and sets and hastens to where it arose.
—Ecclesiastes
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When FDR first came to office in 1933 his first act as President was to stabilize a banking system that had all but shut down leading up to the day of his inauguration. By summer that year the Senate Banking Committee was conducting a full-scale investigation into the causes of the nation's economic and financial collapse.
Then as now, it seems the order of precedence is a simple matter of political reality. First stabilize a socially dangerous situation, then investigate, determine responsibility, and act to prevent the danger from ever appearing again. It is, therefore, important the same, full course be taken in response to an ongoing financial crisis and a threatening economic calamity. The very credibility of our government depends on it.
I bring this up because, today, immediately after Treasury Secretary Geithner had read his opening statement before Senate Banking Committee hearings on TARP program modifications (whose highlights were announced by the Secretary this morning), Senator Chris Dodd (D-CT), Chairman of the committee, spoke (48:00) on the matter of conducting investigations into the causes of our current financial crisis, and sounded as if he were reluctant even to go this route.
No doubt, Senator Dodd's sense is correct on the current priority of addressing the immediate needs of the citizenry. It is difficult to question that. Yet, at the same time, Senator Dodd also needs to be impressed with the urgency of conducting a thorough Banking Committee investigation into the financial crisis' origins, much as Ranking Member, Senator Richard Shelby (R-AL), called for last week.
This is particularly true given the fact there were grotesque failures in providing consumer protection resulting in an astronomical expansion in the creation of structured securities whose value Treasury, apparently, is committed to protect as best as possible. But should not the very contractual legitimacy of these securities instead be called into question?
If confidence in government is to be raised, then President Obama's commitment to openness and accountability must amount to something more than mere words, and something more than a website where Americans can check the progress of programs intended to affect economic recovery. To this end Senate Banking Committee investigations are essential.
—Tom Chechatka
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