Rating Wall Street's New Sheriff

By Martin Berg

In the 1930s, the Senate Banking committee appointed a no-nonsense assistant district attorney named Ferdinand Pecora to lead an investigation into the causes of the stock crash of 1929.

Pecora held hearings that were equal parts public spectacle and tough scrutiny of the financial industry’s abuses. His investigation, closely followed by an angry American public, led to a raft of reforms of the banking system, most notably the Glass- Steagal Act, which kept the federally guaranteed business of making loans and taking deposits separate from other, riskier aspects of banking and investing.

Now Congress has appointed a financial inquiry commission to explore our recent financial meltdown.

The panel will not be headed by a hard-nosed prosecutor but by a real estate developer who became Democratic California treasurer from 1999 to 2007 and then an unsuccessful gubernatorial candidate, Phil Angelides.

Prophetic Warnings Haunt Regulation Debate

Here’s how the highly partisan, polarized view of who’s to blame for the financial crisis breaks out:

Liberals blame Bush era deregulation which allowed greedy head bankers to run amok.

Conservatives blame poor people, who encouraged Democratic politicians who cater to them to force banks to lower their lending standards. And of course, there’s ACORN.

But those clashing views break down when you look into the history of the fight to repeal the landmark Depression-era Glass-Steagal  Act.