The work of the Financial Crisis Inquiry Commission has been gathered in a best-selling book and preserved online by the law school at Stanford University. But the commission's chairman, Phil Angelides, already is worried about the record's posterity.
"There is now an effort, I believe, by many on Wall Street and in Washington to wipe away the memory of what has occurred," Angelides said Thursday in New York during a speech at the Hyman P. Minsky Conference, an annual forum organized by the Levy Economics Institute of Bard College to discuss the nature of economic crises and the prospects for reform.
Referencing the return of bumper pay packages, the increased concentrations of big banks and industry efforts to roll back new regulations, Angelides argued that financial executives have not been held anywhere close to fully accountable for their actions.
"Wall Street has its own unique form of the law of gravity that's back in full force," he said.
More than the work of a few bad actors, there were systemic issues that allowed for the financial system's dangerous excesses, Angelides and his commission concluded in its report, which was released in late January. But he said he reserves special blame for the leaders of financial institutions, chief executives in particular, because they were the ones who "sought and accepted responsibility" for the financial affairs of the country.
Angelides rejected the notion that the crisis resulted from a "perfect storm" that could not have been anticipated, and he took to task the officials who presided over the build-up, saving some of his harshest criticism for former Federal Reserve Chairman Alan Greenspan. He accused Greenspan's Fed of taking little more than a token stab at curbing subprime lending abuses that were evident years before the crisis. And he compared Greenspan, who in March sharply criticized the Dodd-Frank Act on CNBC and in the Financial Times, to someone who "had his foot on the gas pedal as we drove over the cliff, and now he wants to give the nation driving lessons once again."
Angelides, who as the former treasurer of California has overseen billions of dollars in pension investments and debt issuance, said nothing in his career, including his private-sector experience in real estate, could have prepared him for the view he got as FCIC chairman of the underbelly of the nation's financial system.
"I often felt as if I had entered my local community bank, had opened a door that I wasn't supposed to open, and when I opened it I saw a casino floor as big as New York, New York ," he said.
In probing the causes of the crisis, the FCIC examined millions of pages of documents, called more than 700 witnesses and held 19 days of public hearings. It ceased operations in February.
Angelides bemoaned what he sees as efforts to consign the particulars of the crisis to "an episode in the normal cycle of a free market economy. "In that regard," he said, "I felt that one of the most important things that we could do at the commission would be to expose the facts, to identify responsibility, to unravel myth, to help everyone better understand how this crisis could have been avoided. In a sense our report is our attempt to record history, not to rewrite it, but as importantly as anything else to make sure that it could not be rewritten."
