by Constance Daley
American Reporter Correspondent
St. Simons Island, Ga.
July 14, 2009
DEVILS DANCING ON THE GRAVES
DUMMERSTON, Vt. -- It's hard to resist being gleeful at seeing Wall Street swindler Bernard Madoff get the maximum sentence - 150 years in prison - for bilking investors out of anywhere between $65 billion and $171 billion.
But justice certainly wasn't done.
Because many of the people whom Madoff ripped off were more renowned than, say, the millions who lost their homes in the subprime mortgage debacle, he has gotten far more attention than he deserves.
While there is satisfaction in knowing that the 71-year-old Madoff will likely die in disgrace behind the walls of a federal prison, we will probably not see others join him behind bars. It's easier to turn one or two people into scapegoats than to demand accountability from all the people who brought the global economy to its knees.
For the first time in at least 40 years, there is a chance that median household income will end the decade lower than where it started, and the severity of this recession could hold incomes down for years. Since the spring of 2007, American households have lost a total of $14 trillion in wealth in this recession, according to a recent Federal Reserve report. In the first quarter of this year alone, households saw their net worth decline by a total of $1.3 trillion.
In all, nearly 25 percent of the average American household's net worth has vanished in less than 18 months, sucked into a vortex of financial chicanery unprecedented in our history. And our collective wealth is still disappearing faster than the Federal Reserve and the U.S. Treasury can replace it, making the chances of seeing the kind of consumer-driven, debt-fueled economic boom we saw earlier in this decade about nil.
If there is an honest answer for doing something about this, we've yet to hear it from President Obama and his Administration. When will the people who trashed the world's economy and made $14 trillion disappear be called to account?
There's plenty of blame to go around, including current members of Congress and the Obama Administration who played a role in the deregulation of financial markets in the late 1990s. But the blame should fall squarely on Wall Street.
We are overdue for an accountability moment for the American finanical industry. Fraud on a scale unimaginable has been committed, and the hard-earned savings of countless Americans has been looted, yet so far, only Madoff has taken the fall.
A bipartisan congressional panel armed with subpoena power is being formed to investigate causes of the Wall Street meltdown. The 10-member Financial Crisis Inquiry Commission (FCIC) will study how fraud, regulatory lapses, monetary policy, accounting, lending practices and executive pay contributed to the worst global financial crisis since the Great Depression.
The FCIC is modeled after the Pecora Commission, a U.S. Senate panel formed in the early 1930s that investigated the causes of the 1929 Wall Street crash. Those hearings, led by Ferdinand Pecora, produced the facts and momentum for the major New Deal financial reforms.
We need a Pecora-style investigation that will name names, ask tough questions and seek remedies. What we don't need is for the FCIC to be another version of the 9/11 Commission, a panel that was never allowed to fully and completely investigate all the lapses that led to the Sept. 11, 2001, terror attacks.
In order for the FCIC to make a difference, it must have teeth. It must be able to generate evidence leading, if warranted, to trials and convictions of those who broke the law. It should do this without fear or favor.
And once its work is done, and it has gathered the needed information to create a new system of regulation, Congress must act swiftly and decisively to ensure that our financial markets are once again trustworthy.
Nothing less will do.
Randolph T. Holhut has been a journalist in New England for nearly 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at email@example.com. For extra added thrills, read his ongoing daily blog on The Harvard Classics.