When Franklin Roosevelt created the Securities and Exchange Commission to combat the widespread fraud on Wall Street that helped bring on the Depression, he named Joseph Kennedy as its first chairman. The future president’s father was a wildly successful investor and didn’t have a reputation for, let us say, always playing it straight on the Street. “You need to set a thief to catch a thief,” FDR said of the appointment and Kennedy was extremely successful at making American securities markets safe and lawful.
Alas, we don’t have any Joe Kennedys to replace Mary Schapiro, who announced today she is stepping down as head of the SEC. In a prepared statement, she said, “Over the past four years we have brought a record number of enforcement actions, engaged in one of the busiest rule-making periods, and gained greater authority from Congress to better fulfill our mission.” Really? So how did the Hewlett-Packard scandal happen?
If Treasury Secretary Timothy Geithner is the biggest lapdog of Wall Street, Schapiro is not far behind as yes-woman. Not one major figure behind the crimes that cost America so dearly has gone to prison. Not one. Not one was forced to return his ill-gotten compensation. Angelo Mozilo of mortgage death star Countrywide settled fraud charges for $67.5 million. His compensation for 2001 to 2006: $470 million.
Where to pinpoint the fundamental problem? That Wall Street and the oligarchs own D.C.? The revolving door between Wall Street and the regulators that ensures compromised regulation? The massive complexity of the financial system, especially making money by moving money around? It’s all that and more. If Our Kenyan Socialist President can’t at least build a little fire under the economic royalists who flushed hundreds of millions away trying to defeat him, maybe Sen. Warren can give it a shot.
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Today’s Econ Haiku:
As the EU Turns
Long-running soap opera
Maybe Dark Shadows?