Why has Congress´ search for accountability in the financial crisis been such a disappointment?
The hearings in the House Financial Services Committee, or at Senate Banking, or House Oversight, at which regulators, bankers and other industry officials must justify their roles in the messy response to the meltdown, ought to be terrifying. Certainly, there has been some anticipation of terror, the same shudder a child feels when his mother threatens to Tell His Father. But the frightening scenario never plays out. Instead of causing kids from the banking world to truly quake, our big old Congressional dad seems to have gone soft. When he yells, his heart´s just not in it. Plus he doesn´t really seem to have been listening when Mom explained the crime in the first place. He struggles to keep the story straight.
Onlookers want blood, or at least some catharsis. Something they, as taxpayers maybe, can hang onto for sweet revenge. Boy, our Congressmen really told it to `em!
Instead we get hearings like today´s interrogation of Federal Reserve Board Chairman Ben Bernanke.
Armed with a memo full of excerpted emails between Fed officials, the Oversight Committee seemed geared up to deliver some truly grueling questions about whether Bernanke coerced Bank of America CEO Ken Lewis into buying Merrill Lynch with threats of kicking him out of his job. There were also new materials raising questions about when Bernanke knew certain things about Merrill´s losses and how that knowledge affected his decisions.
As they addressed Bernanke, the committee members seemed angry. But they asked the same questions many times over, as if they had not heard his responses to their colleagues´ identical interrogations. It meant that Bernanke repeated the same few assertions throughout the hearing. That he hadn´t told Lewis he´d fire him if Lewis refused to do the Merrill deal. That he hadn´t known about Merrill´s fourth-quarter losses until after the Fed had approved the merger.
It was all so repetitive that by the time Marcy Kaptur, D-Mars, got the chance to ask her questions about Fed contracts with investment management firm BlackRock, the conspiracy theories about mortgage-backed securities revealed to be fraudulent inventions sounded like refreshing comedy. A reprieve not from true pressure but from profound ennui.
Few committee members chose to look forward, to ask about the BofA-Merrill deal´s implications for the Fed´s potential role as systemic risk regulator. They didn´t try to tease out Bernanke´s claim that the Fed needed more authority or a different definition of its duties in order to monitor systemic risk. If that were true, then what has it been doing for the past few months?
And there seems to be no greater understanding now about who was lying-Bernanke, Lewis or former Treasury Secretary Henry Paulson-in his testimony on the later, controversial stages of the BofA-Merrill deal. Weren´t we looking for some answers?
It´s hard to say why Congress can´t quite capture that je ne sais quois that makes for a substantial, enlightening hearing. Perhaps committee members should try harder to coordinate their lines of questioning with each other, to cover more ground and avoid wasting time. Perhaps they should take better notes and concentrate harder on their follow-ups. The country´s waiting. In the words of White House Chief of Staff Rahm Emanuel, a crisis is a terrible thing to waste.