Curses! Yet again my efforts to expand my compassionate and even syrupy post on frenemies that was sure to be the last word on the subject and indeed a cracking good read are thwarted by the events now known as Black Sunday and the continuing inherent idiocy of Wall Street.
There was a time and not so long ago that the government would have stepped in and demanded accountability. 60,000 workers worldwide now find that they are out of a job or in danger of losing their job with their retirement assets also in jeopardy. And today, the DOW was down 500 points in response the fallout of the Lehman Brothers debacle and the Merrill Lynch sell off. A day of reckoning to be sure and a day for the history books.
When I was wee I had the great good luck of serving as a congressional intern for the Honorable Henry B. Gonzalez (D. TX.)
Gonzalez was selected to chair the Banking, Finance and Urban Affairs Committee in 1989. Under his leadership, the committee was able to enact several pieces of legislation favoring consumer groups, such as improved credit measures for small businesses, federal flood insurance reform, and increased accountability of the Federal Reserve. In addition, Gonzalez pushed for strengthening anti-money laundering laws and harsher punishment for bank fraud and other financial crimes.
Throughout the 1980s, Gonzalez warned against the potential dangers of federal deregulation of the savings and loan industry and we see that in evidence today. After his prediction became a reality, he was given the task of structuring the bailout legislation. He accepted the assignment on the condition that those responsible, both in the private sector and their legislative supporters, be publicly recognized for their wrongdoing. His efforts resulted in pressure from a number of his fellow Democrats to resign, but Gonzalez remained true to his cause. In 1991 he was successful in reforming the federal deposit insurance system. During his tenure as chairman, Gonzalez earned a reputation for being a fair leader who allowed equitable participation in the creation of bills while reinforcing his legacy of championing the cause of ordinary people affected by legislation he oversaw. Gonzalez gained national attention once again in 1992, when he investigated loans made from President George Bush and his colleague James Baker to Iraqi leader Saddam Hussein. His investigation showed the $3 billion loans supposedly designed to support Iraqi agricultural projects were actually spent for weapons development. Gonzalez went on to oppose military action in the Persian Gulf during the 1991 Gulf War. He even called for Bush’s impeachment on the grounds that through his previous financial support of Hussein the president had eliminated any chance of finding a peaceful resolution.
During his long congressional career, Gonzalez received numerous honors, including the National Alliance to End Homelessness Award, the Texas Civic Leadership Award, the B’Nai B’Rith National Humanitarian Award, the 1992 National Rural Housing Legislator of the Year and the 1994 Profile in Courage Award from the John F. Kennedy Foundation.
We won’t see his like for a long time to come I’m afraid. We are stuck with a system that continues to spiral and heads in the sand at this point would be a disaster. I can’t even bring myself to comment further. But wait, I’ll try… The Bush administration has been reckless in its handling of the finance industry. The recent bail out of Bear Stearns and Fannie Mae and Freddie Mac should never have happened. We need more regulation full stop. It is the lack of regulation that caused this in the first place. The capital rules are far too lax, and they still are. They may have made sense if you assumed perfectly liquid and smoothly functioning markets, but that is like saying a roof does not leak when it is sunny and mild. That’s just bad business. The Dick Fulds of the industry should now be hung up by their Buster Browns or Prada (s) as the case may be.
This being an election year I don’t trust a candidate like McCain who continues to tout the strength of the economy in the face of what is happening today. Indeed, shouldn’t the ability to send an email be at the very least the lowest common denominator for world leader? I ask you. Nevertheless, this development will test both candidates mettle to produce some real solutions. After the lessons of the Great Depression have we learned nothing?
I know that if the old man were alive today he would have fallen out of his chair.