The final report on President Obama’s bi-partisan panel concludes that the 2008 financial crisis was an “avoidable” disaster.
“The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done,” the panel wrote in the report’s conclusions, which were read by The New York Times. “If we accept this notion, it will happen again.”
Who is to blame for infecting America with a terrible financial contagion? More like: Who isn’t? The Financial Crisis Inquiry Commission report — peppered with literary garnishes such as “Like Icarus, [the banks] never feared flying ever closer to the sun” — blames corporate mismanagement and Wall Street’s recklessness, but some of its gravest accusations are directed at government failings.
The panel’s hit list:
Alan Greenspan: for advocating deregulation, citing a “pivotal failure to stem the flow of toxic mortgages” while he chaired the Fed as a “prime example” of negligence.
Ben Bernanke: for not seeing it coming and orchestrating a response that ““added to the uncertainty and panic in the financial markets.”
The Bush administration: for allowing Lehman Brothers to collapse in September 2008 after earlier bailing out Bear Stearns.
Hank Paulson: for his less-than-accurate prediction that the subprime collapse would be contained
The Clinton administration: for deciding in 2000 to shield the exotic financial instruments known as over-the-counter derivatives from regulation, “a key turning point in the march toward the financial crisis.”
And last, but not least, Tim Geithner: for missing signs of trouble at Citigroup and Lehman during his tenure as president of the Federal Reserve Bank of New York.
Despite the embarrassing implications to both parties and the amount of research (nineteen days of hearings, 700 interviews) that went into the report, it was signed by only the panel’s six Democrats. Three Republicans issued their own report — yes, the same Republicans who wanted to ban the term Wall Street from their findings — focusing on fewer targets. Just to make sure we don’t come away three years later with any sense of consensus about fault, Republican Peter Wallison went rogue, zeroing in on home-ownership policies, even though main reports dismissed them as a minor factor.
Read the evidence for yourself when the panel releases a 576-page book on their findings tomorrow, if not for the insights, then at least for the Julius Caesar reference.