Pecora Commission Redux?

You probably never heard of the Pecora Commission (unless you're a LaRouche nut)-- at least not until Nancy Pelosi said she wants to model a new legislative commission after it last night. It's a good idea. The original 1932 commission, which was established by the Senate Banking Committee, was charged with figuring out why the stock market crashed in 1929, leading to the Great Depression, and what Congress could do to prevent it from happening again.

When it was first established, the GOP was still the dominant political party, and the commission was widely viewed as a way to whitewash its own responsibility for the Depression. In the 1932 elections, the GOP was destroyed at the polls, losing 101 seats in the House and 13 seats in the Senate. When the Pecora Commission reconvened after the election there were only 35 Republicans left in the Senate, a number that was further reduced as the party continued espousing right wing ideology and obstructionism-- as they are doing today-- and by 1936 there were only 25 Republicans left in the Senate and 88 in the House. The new chairman, Florida Democrat Duncan Fletcher, fired the incompetent Republican staffers and the commission got rolling in a serious fashion.

Wall Street disgraced itself at the hearings, declaring it knew better what was right for the country than voters did and the public realized that the grand captains of industry were just pumped up highway bandits intent on looting and plundering. It came out, for example, that the wealthiest Americans, like J.P. Morgan, paid no income taxes and that the entire financial system was gamed on behalf of a few multimillionaires. The Commission's work helped open the public's eyes to what Republican economics really meant and the Democrats were able to pass a broad array of new regulations to keep the avarice and greed of the banksters in check. Obviously Wall Street fought the reforms with all its considerable might-- and never stopped.

The Pecora Commission didn't predict that the banksters would rise again and spend $2.2 billion in bribes-- and even more in lobbying-- to game the system in their favor again. Nor could the Pecora Commission do anything to prevent politically-illiterate voters and dittoheads from electing Hoover and Coolidge-like candidates (and worse)-- venal and corrupt deregulators from Phil Gramm to George Bush-- and all the human detritus between. The existence of the garbage in our political system is a function of a purposefully and systemically corrupt campaign finance regime and of a poorly educated (to describe it in the kindest possible terms) electorate. The fact that the level of ethics and political leadership among the champions of working families also leaves something to be desired, has shackled us to successive governments dedicated to serving special interests at the expense of society and, especially, at the expense of working families and the middle class. The work of the Pecora Commission was eroded under Reagan and Clinton and the then obliterated and buried under Bush. The elimination of the Glass-Steagall Act was just the shining jewel in the crown of the deregulatory mania that is the true heart and soul of the GOP.

And the result: another Republican Party-caused depression. Which brings us back to last night's declaration by Speaker Pelosi to initiate a new Pecora Commission. She acknowledged that "the American people are demanding 'discipline and accountability' after the multibillion-dollar federal bailouts, [and] promised Wednesday to create a legislative commission with broad oversight to investigate the causes of Wall Street irregularities and their full costs to taxpayers."

"They investigated what happened in the markets," including conflicts of interests and irregularities that set off such devastating effects on the U.S. economy, she said. When the commission issued its findings during the administration of President Franklin Delano Roosevelt, "they had tangible recommendations," she said, which helped generate widespread public support for major banking system reforms and new securities laws.

Pelosi said she discussed the matter with Treasury Secretary Timothy Geithner on Wednesday and will raise the matter with her colleagues in the House of Representatives next week. She said her actions have been sparked by the observation that, no matter where she travels in the United States, she hears concern about financial irregularities.

"People are very unhappy with these bailouts," particularly multimillion-dollar bonuses paid out to executives of failing firms like American Insurance Group, or AIG, that have received federal bailout funds, she said.

"Seventy five percent of the American people, at least, want an investigation of what happened on Wall Street," the speaker said to applause.

"We're going to have a commission ... even if it is only in the House of Representatives," Pelosi pledged, saying it would allow Americans "to have a clearer understanding of how we got here-- and the risk that's been taken by the taxpayers in all this."

"That's what we would do with this commission, is to make sure it does not happen again." she said.

She said the move coincides with legislation she soon will send to President Obama on financial institution regulation and reform, "so we have transparency ... discipline and accountability to the American taxpayer."

Don't expect the Republican Party to take this laying down. They're planning more tea parties and there are even rumors that Alaska may join Rick Perry's secession movement; maybe Glenn Beck will even renounce his American citizenship if Congress tries to rein in the banksters.