Remember the Securities Exchange Commission?
The SEC got its start in the 1930s, when dodgy dealing on Wall Street triggered that massive economic meltdown now known as the Great Depression. The idea was that the SEC would impose transparency on stock markets and make sure that people actually knew what they were buying or selling.
Well, the current financial meltdown is all about transparency — or, more precisely, its opposite. In short, there are literally trillions of dollars in securities washing around our financial system that no one has any idea of how to value. And now everybody’s trying to dump them at once — and Wall Street is cratering as a result.
So where was the SEC while Wall Street was diligently — and quite profitably — slapping together this shiny house of cheap plywood and Elmer’s glue? The question is key, given the tens or hundreds of billions of dollars taxpayers will be asked to shell out to clean up the mess.
To be fair, the SEC has pursued a policy of craven inaction for years, even before the Bush administration and its merry crew of anti-regulators came bumbling in. But check out this superb radio segment (see "act two") by ace This American Life reporter Alex Blumberg on SEC chief Christopher Cox. On the strength of Blumberg’s reporting, I hereby award Cox the 2008 Michael D. Brown "heckuva job" prize for his actions during the Wall Street mess.
(By the way, anyone who wants to understand the financial meltdown — and how a modicum of oversight might easily have spared us from it — should listen to Blumberg’s luminous recent report "Giant Pool of Money.")