The role of credit rating agencies in the financial meltdown. The May 6 “flash crash” and how to avoid a repeat. The Fed’s role in the financial system.
Three pretty substantial topics. Today we learned in three separate stories that after all the air, ink and pixels expended discussing how “things are gonna change” nothing, really, is going to change.
News headline: Rating Agencies Dodge Bullet in Wall Street Reform Bill
News headline: Little Change Seen After May 6 ‘Flash Crash’: Panel
News headline: Fed Could Evade Toughest Scrutiny in Wall Street Bill
The ratings agency bullet-dodge is particularly irksome to me. Everyone involved in writing legislation to address the ratings problem agrees it’s a clear conflict of interest for banks to choose their own ratings agencies. Sen. Al Franken (D-Minn.) backed a proposal that would have ended that conflicted practice. Many key people agreed it was a good idea. But when push came to shove, the Democratic leaders in the House and Senateâ€”Barney Frank (D-Mass.) and Christopher Dodd (D-Conn.), respectively, applied the brakes, saying it was “complicated.”
Complicated? You don’t say. Well, sheet, since it’s complicated, we’d better just appoint some people to study it.
Aspects of the “Chicago Way” are even creeping into Congress. Chicago politicians (read: The Daleys) have a longstanding tradition of appointing committees to “study” serious problems like corruption. The committees are appointed to great fanfare. Sometimes they release recommendations for action, also to great fanfare. And eventually, absolutely nothing happens.
And friends wonder why I’ve become so cynical.