Major market indices rose last week. The DJIA gained 0.72%, the S&P 500 increased 0.28%, and the Nasdaq rose 0.21%. Growth stocks outperformed value stocks. And the small cap index rose 0.34%. The 10-Treasury yield gained 1 basis point on the week, closing at 3.33%.
The Federal Crisis Inquiry Commission, whose report on the financial crisis is due in January, has been slowed by partisan discord. Dems and Repubs on the commission continue to disagree as to who is responsible for what, and where the blame resides. The sad fact? Whereas this commission could have pulled back the curtain and exposed the wizard for the fraud he was, there continues to be a complete lack of objectivity.
Instead of providing an honest record of what led to the 2008 economic crisis, our politicians are back to protecting their constituents (read donors) and arguing over ideologies. Shame. It is rare for an honest broker to have a chance to assess the still smoldering ruins, so providing a true historical record of the incident. This could have been such an opportunity.
Created by Congress in 2009 and headed by former Cal(IOU)fornia treasurer Phil Angelides, the FCIC was deemed an effort to bring a "clear-eyed examination" of the worst economic collapse since the Great Depression. But, as the six Dems and four Repubs have proven, even those survivors walking away from the smoldering crater will begin slap fighting soon enough.
The commission has interviewed hundreds of insiders, and obtained thousands of documents in completing its assessment. They were meant to provide what some members are calling "more or less a statement for history and maybe a marker for what happens when we have the next crisis."
The sad fact remains the lack of objectivity. And likely, the lack of impact. According to sources, the four Repubs on the commission have essentially absolved Wall Street and Big Banking of any blame for the crisis, pointing all fingers at government mismanagement, even though much of the data points elsewhere.
More problematically, the commission's Repubs still allegedly refuse to include in the report such controversial phrases as "Wall Street" and "shadow banking," terms that sixth grade social studies classes now use with impunity.
Don't get your panties in a bunch. There is, in my estimation, enough blame to tar and feather everyone. Government regulators. Politicians. Bankers. Non-bank lenders. Fannie Mae. Freddie Mac. Mortgage originators. Loan brokers. Real estate agents. Appraisers. Bond underwriters and insurers. Repubs and Dems. And that is a partial list.
According to some, the report may also have assisted in helping to overhaul GSEs Fannie Mae and Freddie Mac, two of the biggest beneficiaries of taxpayer largesse, neither of which has been able to get its act together, shamelessly walking back to the taxpayer trough quarter after quarter.
How can we expect a commission incapable of agreeing on the basic terminology to draft a report that establishes an historical record for future generations to look back upon? Learn from? Benefit by? Truth is, we cannot.
But, the FCIC apparently sees it differently. By the act of omission doth perform this Federal Commission. Apparently it is more important to protect deep pocketed supporters from the historical record than it is to set the record straight.
Ironically, amidst this political theater of the absurd, some spectators have lamented the commission's lack of political theater, saying that dialing up the drama volume would at least create some public interest in the findings.
"They haven't delivered any bombshells," said Penn State professor Cole of the FCIC. "There is a necessity to provide some political theater if you want to get results."
Perhaps if we renamed the commission, "The Real Housewives of the Federal Crisis Inquiry Commission," then Americans would show an interest.
Unfortunately, objectivity and honesty would have been the most desired outcomes. But, honest efforts and political patronage are often at odds. And in Washington, as in all power centers, money talks--to everyone.
I have said before that, so long as the U.S. suffers under its current duopolistic political system, then truth will rarely be a by-product. Republicans and democrats are as symbiotic as sharks and remoras. And as long as the voting public cares more about reality television than to the reality we inhabit, then the ecosystem in D.C. will remain unchanged.
As the economy recovers, and the wounds of the middle class begin to scar, it seems that the moment has passed us by. This will lessen the impact of the commission's report. And sets the stage for a more tolerable historical record. Which may be exactly what this commission seeks to accomplish. Stay tuned.