The congressional hearings before the Committee on Oversight and Government Reform started today in the Rayburn Building with the usual dose of grandstanding and class warfare. Both were being offered up by the chairman Henry Waxman in abundance.
The hearings allegedly are being held to find out how this whole Wall Street mess developed. That way reforms could be put in place to assure the public such a crisis will never happen again. Yet as in all “hearings” held on Capitol Hill, the politicians asked few questions, and instead made many statements.
Henry Waxman made sure to quiz Mr. Richard Fuld about his $14 million home in Florida and his excessive compensation package. I, along with every other American, am sickened by the level of greed and excess that permeated Wall Street but what do Mr. Fuld’s homes have to do with the problem?
Richard Fuld employed 28,000 people and ran a firm that for many years made record profits for its shareholders and employees. Many mutual funds and investment trusts made significant amounts of money to the benefit of many Americans other than Richard Fuld. To neglect that and merely focus on the last couple of years is ludicrous.
Lehman was a well-respected institution and led the market in many areas. And while I make no excuses for the reckless decisions and foolish risk taking, we must not allow politicians to muddy the political waters at the expense of losing the tools to fix the problems.
Question after question seemed designed to embarrass and humiliate Richard Fuld. To hear crazy cousin Dennis Kucinich ask questions like, “Did Mr. Paulson mislead you?” indicated a desire to find a tie to corruption from the Bush administration, not a fix. For Mr. Tierney to ask if Fuld “defrauded” the public made clear Fuld’s role as the sacrificial lamb in the eyes of the inquisitors.
After listening to the hearings I am confident that in due time we will see Mr. Fuld in handcuffs. It will not matter to anyone if he is guilty or not for the nation is demanding blood and lots of it. Leaders are doing a magnificent job of making Mr. Fuld the evil fat cat from which all greed flows. And maybe Mr. Fuld should be fitted for bracelets but that is not what this hearing is about. It is to reform and provide oversight; not arrest a bad guy.
Putting hearings in the hands of partisan, big government Democrats this close to an election, during a market meltdown, is a joke. Assure yourself you will never see testimony from the folks at Fannie or Freddie until after the election, if ever. Franklin Raines, James Johnson and Jamie Gorelick will not be sitting in the hot seat. Their ties to the Democratic Party are way too deep and strong.
As we move down this road of “reform” and “oversight” we best be careful for what we wish. All of the leaders are telling us they want greater transparency. Fuller disclosure in understanding the underlying issue that caused this crisis. A crisis we are told by Eleanor Norton Holmes is the worst in over 75 years. But can we handle full disclosure?
Do we really want to know just how bad the problems are when we bring $516 trillion of derivative risk, according to the Bank of International Settlement, into the discussion? A problem that may be as large as $1 quadrillion. Worse yet, do we want nations around the world to see the true state of American finance?
Can the nation afford the further erosion of confidence when it realizes the depth of just what an $11 trillion national debt means to our future ability to meet obligations? Of course I haven’t even mentioned the $60 trillion of unfunded mandates in the form of Social Security and Medicare commitments.
If transparency and disclosure are coming, which I welcome, get ready for a huge drop in the Dow, a long-term devaluation of the dollar and years of slow to negative growth with much higher levels of unemployment; all followed by rampant inflation. That is why I suggest our leaders be careful for what they ask. We just might get what we are looking for and that might well damage the system far worse than we have already seen.
Years of wasteful government spending, easy credit and greed run amok in every area of the country may have caught up with us. Will we get through it? Absolutely. It is just a question of being prepared for difficult times and having realistic expectations so as not to set oneself up for disappointment.
I have no delusions of what we will get from these hearings on Capitol Hill for I know what the leaders want. They want what is best for their respective party, not the country. The vote on the bailout package proves that beyond question. But I am certain of one thing these hearings won’t bring, and that is the restoration of confidence.
I can only hope we instead look for answers to solve the problem and for ways to implement and enforce reasonable changes that will restore confidence and get the nation moving again. That however is going to take time. Nothing, with the exception of political contributions, comes quickly in our nation’s Capitol.
Team Trump: Young, smart and ready to rumble
Bucky Fox