Probably the best documentary on the financial crisis was broadcast last night: Frontline's 'The Warning.'
The gang's all there -- Greenspan, Rubin, Summers, Geithner, Gramm, Levitt etc. -- ganging up on one lone woman who warned more than ten years ago about the risk of systemic failure. They didn't just ignore Brooksley Born. They effectively tried to publicly humiliate her. She was proven right. They were proven wrong. But guess who's still making policy in Washington? Hint: It's not Paul Volcker.
Geithner's current approach comes across as someone trying to regulate the fox instead of building an old-fashioned chicken coop. ... Did capitalism exist before the Glass-Steagall Act was watered down and then repealed? Of course it did. But you'd think, listening to Alan Greenspan et gang, that returning to a variation of Glass-Steagall would be a disaster. What's their definition of disaster? Something worse than bailing out a system to the tune of trillions of dollars? ... Perhaps Obama should use a little bit of his vaunted charm and international capital to push for new global regulations on banks and investment houses. The main argument against re-regulating American banks seems to be that it would put them at a competitive disadvantage against other banks. Well, then, get an international agreement. Right? ... Frontline's rebroadcast schedules are here