Eighteen months after former California State Treasurer Phil Angelides was appointed to the bipartisan commission looking into the causes of the financial crisis whose aftermath continues to batter the U.S. economy, three reports have been issued:
First, there's the 400-page official report signed off on by the six Democrats and called Final Report of the National Comm[i]ssion on the Causes of the Financial and Economic Crisis in the United States:
"The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble. While the business cycle cannot be repealed, a crisis of this magnitude need not have occurred. To paraphrase Shakespeare, the fault lies not in the stars, but in us."
Then there's the 39-page dissenting report of three of the commission's four Republicans, including the vice chairman, Bill Thomas:
The majority says the crisis was avoidable if only the United States had adopted
across-the-board more restrictive regulations, in conjunction with more aggressive
regulators and supervisors. This conclusion by the majority largely ignores the global
nature of the crisis.
And then there's the 108-page dissenting report of the fourth Republican, Peter J. Wallison, who published his dissent under the auspices of the American Enterprise Institute:
Claims that there was a general failure of risk management in financial institutions or excessive leverage or risk taking are part of what might be called a “hindsight narrative.” With hindsight, it is easy to condemn managers for failing to see the dangers of the housing bubble or the underpricing of risk that now looks so clear. However, the FCIC interviewed hundreds of financial experts, including senior officials of major banks, bank regulators, and investors. It is not clear that any of them—including the redoubtable Warren Buffett—was sufficiently confident about an impending crisis to put real money behind his or her judgment.
All three reports destined for a government shelf.