The Call for a Commission
By Arnold Kling
An independent financial oversight committee should be established to examine what led to the economic meltdown, House Republicans on the Oversight and Government Reform Committee said Wednesday.
The National Journal’s Congress Daily (subscription required) reports,
Democratic leadership sources said the idea is unlikely to move forward.
According to this second story, the Democrats plan to use the ordinary Committee process to enact financial regulatory reform. They see no need for bipartisanship, and they are probably right. Assuming that the Democrats sweep, I think we will see the media and academic elites lose all interest in bipartisanship. Instead, we will hear about the virtues of overcoming obstruction and getting things done.
[UPDATE: One of the things the Democrats do not want to discuss is the Fannie/Freddie story, as described by Peter J. Wallison and Charles W. Calomiris.
the GSEs sold out the taxpayers by taking huge risks on substandard mortgages, primarily to retain congressional support for the weak regulation and special benefits that fueled their high profits and profligate executive compensation.
My fear is that financial “reform” will mean putting much of the economy into GSE mode.]