Arnold Kling  

The Call for a Commission

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The Hill Reports,


An independent financial oversight committee should be established to examine what led to the economic meltdown, House Republicans on the Oversight and Government Reform Committee said Wednesday.

The National Journal's Congress Daily (subscription required) reports,

Democratic leadership sources said the idea is unlikely to move forward.

According to this second story, the Democrats plan to use the ordinary Committee process to enact financial regulatory reform. They see no need for bipartisanship, and they are probably right. Assuming that the Democrats sweep, I think we will see the media and academic elites lose all interest in bipartisanship. Instead, we will hear about the virtues of overcoming obstruction and getting things done.

[UPDATE: One of the things the Democrats do not want to discuss is the Fannie/Freddie story, as described by Peter J. Wallison and Charles W. Calomiris.


the GSEs sold out the taxpayers by taking huge risks on substandard mortgages, primarily to retain congressional support for the weak regulation and special benefits that fueled their high profits and profligate executive compensation.

My fear is that financial "reform" will mean putting much of the economy into GSE mode.]


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COMMENTS (3 to date)
Frejus writes:

"I think we will see the media and academic elites lose all interest in bipartisanship. "

The GOP lost it's bipartisan membership card quite a few years ago. Or should I say they burned it. They will have to earn it back. And the way they are still stuck in Rovian divisive politics: I think we've got a long wait before they change their ways.

That should be the topic of a future post that you write: how the incompetence and power hungry GOP--and their libertarian backers--destroyed the short-term prospects for libertarianism.

It's about time libertarians start analyzing themselves.

Marc writes:

Frejus--you're missing the point. No party "burns their bipartisan membership card." Heck, the Nazis and the Bolsheviks signed a non-agression pact, and if they could get along then the Dems and the GOP, who agree on about 95%, will find common ground soon enough. The issue that I think Arnold is addressing, and I think he's right, is that "the spirit of bipartisanship" was only important to the press as long as the Dems weren't in power. When both houses and the White House are Republican, the press wants everyone to get along. When both houses and the White House is Democratic, the focus will be on how well they can steamroll the GOP. In other words, it was always a cynical canard.

shayne writes:

"My fear is that financial "reform" will mean putting much of the economy into GSE mode."

Dr. Kling, your fears were realized about 3 weeks ago with the passage of the bailout bill.

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