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Frank Partnoy, law professor at the University of San Diego, says in an op-ed in today's (Jan. 30) New York Times that the Financial Crisis Inquiry Commission report issued Thursday was a "confusing and contradictory mess, part rehash, part mishmash" and the major villain was politics. There were three reports: one by Democrats, one by Republicans and a third by a conservative economist who blamed the crisis on Fannie Mae and Freddie Mac and politicians' push for home ownership. The mess was foreordained as Congress required "bipartisan approval for subpoenas yet also appointed strongly partisan figures," writes Partnoy. "The Democrats focused on the credit rating agencies' conflicts of interest; the Republicans blamed investors for not looking beyond the ratings. The Democrats stressed the dangers of deregulated shadow markets; the Republicans blamed contagion, the risk that the failure of one derivatives counterparty could cause the other banks to topple," writes Partnoy. The third dissenter played down both topics. However, "There is still hope," writes Partnoy. The commission looking into the 1929 crash had four chief counsels before it issued a strong report.
Frank Partnoy, law professor at the University of San Diego, says in an op-ed in today's (Jan. 30) New York Times that the Financial Crisis Inquiry Commission report issued Thursday was a "confusing and contradictory mess, part rehash, part mishmash" and the major villain was politics. There were three reports: one by Democrats, one by Republicans and a third by a conservative economist who blamed the crisis on Fannie Mae and Freddie Mac and politicians' push for home ownership. The mess was foreordained as Congress required "bipartisan approval for subpoenas yet also appointed strongly partisan figures," writes Partnoy. "The Democrats focused on the credit rating agencies' conflicts of interest; the Republicans blamed investors for not looking beyond the ratings. The Democrats stressed the dangers of deregulated shadow markets; the Republicans blamed contagion, the risk that the failure of one derivatives counterparty could cause the other banks to topple," writes Partnoy. The third dissenter played down both topics. However, "There is still hope," writes Partnoy. The commission looking into the 1929 crash had four chief counsels before it issued a strong report.