Leave it to Paul Krugman to point out what the lazy, corporate media won't:
Pretty good story on the coming fight over financial regulation. But it lets the Bushies off way too lightly, by suggesting that lack of coordination between agencies led to the awesome failure of regulators to take action against the bubble:
Except for the Federal Reserve, all of the federal bank agencies receive funding from fees paid by member institutions, and some specialists have long argued that the agencies competed with each other to woo institutions with lighter regulation.
"There was no federal coordinated oversight, and as a result there was a competition to reach the bottom, both in federal and state organizations," said Brian C. McCormally, a former enforcement chief at the Office of the Comptroller of the Currency.
Actually, there was plenty of coordination - a coordinated effort to destroy effective regulation:
Consider the press conference held on June 3, 2003 - just about the time subprime lending was starting to go wild - to announce a new initiative aimed at reducing the regulatory burden on banks. Representatives of four of the five government agencies responsible for financial supervision used tree shears to attack a stack of paper representing bank regulations. The fifth representative, James Gilleran of the Office of Thrift Supervision, wielded a chainsaw.
The lack of oversight, in short, was no oversight: it was part of the plan.
