Between 1932 and 1934, the Senate’s Pecora Commission, named after its general counsel, amassed 12,000 pages of testimony. Its focus was the impact of stock exchange practices on banking, securities, and commerce. Subsequent major financial legislation was based on the work of the Pecora Commission.
Fast forward to 2009 when the Financial Crisis Inquiry Commission (FCIC) was created by The Fraud Enforcement and Recovery Act. Similar to Pecora, its mission is to investigate a financial crisis: the panic of 2007. With its report due during December, 2010, the commission has begun its hearings.
A question. We heard yesterday that the Senate Banking Committee, led by Senator Dodd, has proposed 1336 pages of legislation to prevent the panic of 2007 from recurring. If the FCIC has just begun its investigation, why is there a major legislative proposal preceding its feedback?
Does this approach sound like the tv game show, Jeopardy?
The Economic Lesson