BLOG VIEW: At the moment of its inception – way back in May 2009, when President Obama signed the Fraud Enforcement and Recovery Act into law – the Financial Crisis Inquiry Commission (FCIC) seemed like a halfway reasonable concept.
The purpose of the commission – a 10-member, bipartisan board – was to ‘examine the causes, domestic and global, of the current financial and economic crisis’ in the U.S., according to the FCIC's website. The comparisons between the FCIC and the post-Great Depression Pecora Commission, which ushered in the Glass-Steagall Banking Act, were numerous.
In the roughly 20 months that transpired between its formation and the release of its epic final report, the FCIC interviewed more than 700 witnesses and held 19 days of public hearings.
And, lest it be forgotten, a relatively significant event occurred in that time frame: Congress passed sweeping financial services reform legislation.
As soon as it became apparent that passage of the Dodd-Frank Act was near the top of Democrats' pre-midterm-election priorities, the intended goals of the FCIC appeared to take a backseat to glorified finger-pointing.
After all, what is the logic of maintaining a commission whose mission is to examine the causes of a crisis if the very legislative vehicle intended to prevent a similar crisis from happening in the future (i.e., Dodd-Frank) is passed before the commission can even finalize its report?
Should Republicans prevail in their attempt to repeal Dodd-Frank, the FCIC's final report might inform subsequent reform legislation. Alternatively, with housing-finance reform still very much up in the air and at least one FCIC member particularly adamant about the GSEs' role in the crisis, the FCIC report – if taken as a whole, dissenting views and all – might offer some actual utility.
Don't get me wrong, the FCIC report makes for an interesting read, and it provides financial reporters with a galaxy of story leads. The 633-page treatise also hits home some painfully obvious points. (Fannie Mae's risk controls were sub-par? You don't say!)
What absolutely does not need to result from the FCIC's report is more finger-pointing and useless political posturing. Unfortunately, that ship seems to have sailed, with Republicans assailing the majority report's Democratic-leaning conclusions and Democrats railing Republicans for doing their best to torpedo the report before its release. (It was The New York Times' Joe Nocera, I believe, who coined the term ‘presponse.’)
Did anyone truly expect a bipartisan conclusion to this effort, which cost taxpayers somewhere along the lines of $6 million?
Well, at least one person – Rep. Patrick McHenry, R-N.C. – did. McHenry, who is the chairman of the TARP Oversight Subcommittee, issued this statement last week: "The fact that three differing opinions have emerged from a body of only 10 commissioners brings into question the objectivity of the majority report. The subcommittee I lead intends to review these efforts and the process from which they resulted."
And so the financial crisis wheel continues on – and where she stops, nobody knows.
(Please address all comments regarding this opinion column to clappj@sm-online.)
