The congressional Commission of Inquiry into ‘the causes, domestic and global, of the current financial and economic crisis in the United States’ has handed down its report. Despite its length and surface detail, star testimony and subpoenaed documents, the report is predictably superficial. For all the analytic insight on show, it might have been written by mainstream journalists in September 2008. The crisis is pinned on poor risk management by corporations, lack of prudential oversight by government regulators, shoddy ratings agencies, and a general absence of ‘accountability and ethics’. One of the report’s few worthwhile remarks comes in a dissenting statement from Republican appointees to the Democrat-led Commission:
Not everything that went wrong during the financial crisis caused the crisis, and while some causes were essential, others had only a minor impact. Not every regulatory change related to housing or the financial system prior to the crisis was a cause. The majority’s almost 550-page report is more an account of bad events than a focused explanation of what happened and why. When everything is important, nothing is.
[Our] explanation for the credit bubble should focus on factors common to both the United States and Europe, [recognise] that the credit bubble is likely an essential cause of the U.S. housing bubble, and that U.S. housing policy is by itself an insufficient explanation of the crisis. Furthermore, any explanation that relies too heavily on a unique element of the U.S. regulatory or supervisory system is likely to be insufficient to explain why the same thing happened in parts of Europe.