Shame on them. Hennessey and Holtz-Eakin were economists--once.
Keith Hennessey, Douglas Holtz-Eakin vote to remove phrases “Shadow Banking”, “Interconnectedness”, “Deregulation” from FCIC Report: So the Financial Crisis Inquiry Commission (FCIC), the bipartisan panel created to study and issue a report on the financial crisis, imploded. The four Republican appointees – Peter Wallison, Keith Hennessey, Bill Thomas and Douglas Holtz-Eakin – have decided to go it alone and issue their own report Wednesday. Politico, and the Wall Street Journal have more. This will no doubt play into a “Democrats say one thing, Republicans say another thing, who can really tell?” narrative, but what is leaking out of the Republican worldview on the financial crisis is disturbing. Shahien Nasiripour, Financial Crisis Panel In Turmoil As Republicans Defect; Plan To Blame Government For Crisis, catches this gem:
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.
“I think a number of us had really pulled for” bipartisan consensus, said Born, a Democratic commissioner who famously tried to regulate certain derivatives as head of the Commodity Futures Trading Commission. “But this action by the Republicans indicates they have decided to go their own way.”... Hennessey and Holtz-Eakin, for example, have missed about half of the commission’s meetings since [early August], according to a person familiar with the panel’s activities.
Oh. My. God.
I did an interview for the Atlantic Business section about the shadow banking system with Perry Mehrling last year, who has now written a fantastic book about the subject, The New Lombard Street.... Banks have well known problems, and one thing we’ve learned from the crisis is that you can provide maturity transformation – function just like a bank, have bank runs just like a bank – without hanging a sign with the words “bank” on your storefront. How to deal with this, how to fully understand it even, is crucial to understanding the crisis and the way forward. Here’s Gillian Tett covering a fascinating (and detailed) report by the Federal Reserve Bank of New York Staff Reports titled “Shadow Banking.” Every person I know interested in this topic is reading it, trying to understand the complicated nature of the topic; evidently that GOP would think this report shouldn’t be covered because of its name is really disturbing.
Even if you think this narrative is overplayed it needs to be discussed and examined. That they would vote to not even use the words says all you need to know...