The following editorial first appeared in the Miami Herald:
The Financial Crisis Inquiry Commission issued its long-awaited report last week, concluding that the debacle that nearly sank the global economy was fully avoidable, the result of lax regulation, corporate mismanagement and risky practices fueled by Wall Street’s greed. You think?
The commission’s report performs a valuable service by providing a mountain of evidence to dispel the myth that financial crises are an integral part of the business cycle.
Only a year ago, in January of 2010, Jamie Dimon of JP Morgan Chase told the Commission that, hey, these things are just part of life. A financial crisis, he said, “happens every five to seven years. We shouldn’t be surprised.”
Dimon still believes his industry merits sympathy, telling the financial conference in Davos, Switzerland, last week that bankers are tired of everyone beating up on them.
He still doesn’t get it. Americans were surprised and unprepared for the economic downfall because they placed their trust in Wall Street’s wizards and the regulators who oversee them. And they’re still sore, because they were made to pay the tab for the financial malpractice of others. Reading the Commission’s findings won’t make taxpayers feel any better.
Some in Congress interpret the recent elections as a mandate for less government regulation. They’re wrong. Before taking any actions that would weaken regulation of financial markets, they should read the commission’s 576-page report (http://www.fcic.gov/) and absorb its lessons.