Reply #20: Wallison: Leader of the Financial Wrecking Crew by Bill Black

[Demeter]

http://therealnews.com/t2/component/content/article/75-more-blog-posts-from-william-black/549-wallison-leader-of-the-financial-wrecking-crew

The most theoclassical economists are often non-economists like Peter Wallison...From June 1981 to January 1985, he was general counsel of the United States Treasury Department, where he had a significant role in the development of the Reagan administration's proposals for deregulation in the financial services industry...he is co-director of American Enterprise Institute's ("AEI") program on financial market deregulation.

Wallison is back in the media because the Republican Congressional leadership appointed him to the Financial Crisis Inquiry Commission. The Commission has four Republicans and six Democrats. Three of the Republicans were architects of the financial deregulation policies that made possible the current crisis. The fourth, Bill Thomas, was an ardent Congressional supporter of those policies that helped make those policies law. Unsurprisingly, none of the Republicans is willing to support the findings of the Commission's staff's investigations of the causes of the crisis because deregulation, desupervison, and de facto deregulation (the three "des") played a decisive role in making the crisis possible. Each of the Republican members of the Commission is in the impossible position of being asked to investigate his own policies, which the Commission's investigations have shown to have had disastrous consequences.

Even within the Republicans, however, Wallison stands out for the zeal of his efforts to blame everything on the government and working class Americans. He decided that his Republican colleagues had been too weak in condemning the staff's findings and wrote a separate, lengthy dissent to make his case. Wallison's actions were predictable. He was famous prior to his appointment for creating the narrative that the government's desire to help working class Americans purchase homes twisted Fannie and Freddie into the Great Satans that caused the crisis. He believes in complete deregulation - banks deposits should not be insured by the public and banks should not be regulated...Wallison wrote an article in Spring 2007 ("Banking Regulation's Illusive Quest") criticizing a conservative law and economics scholar, Jonathan Macey, who had written an article about financial regulation. Wallison was disappointed that Macey, who typically opposes regulation, concluded that banking regulation was necessary.....AEI's financial deregulation efforts have been immensely influential even though they were run by individuals who had a "total incapacity to do anything" successful "in the real world." Accounting and fraud happen in the real world and they turn these anti-regulatory dogmas into "a total disaster." Indeed, they turn them into recurrent, intensifying disasters. That is why Tom Frank's famous book title: "The Wrecking Crew" describes Wallison so well. He has led the financial wrecking crew. As his track record of failure has increased, so has his refusal to accept personal responsibility for those failures.

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