The Angelides Report
by Jeffrey Steinberg on 04 Mar 2011 1 Comment

On February 13, 2011, the Financial Crisis Inquiry Commission, known as the Angelides Commission, completed its one year mandate, and submitted a 500 page report to Congress. That report is now a nationwide bestseller on both the New York Times and Washington Post list - and for good reason. Don’t be put off by the fact that this was a Congressionally-mandated investigation, or that a number of the Republican members of the commission issued dissenting reports.


For anyone interested in understanding the financial crisis of 2007-2008, and its ongoing manifestations, this is a worthwhile and highly intelligible document. The essential conclusions of the Commission were that the crisis should have and could have been prevented; that there were many officials on Wall Street, in the Congress, and in the Federal regulatory agencies, including the Federal Reserve, who knew or should have known that the biggest financial bubble in modern history was about to blow. The Commission’s own published findings state the point in the clearest terms: “The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again.”


I would go one step further. Not only will it happen again. It is already happening again. The actions taken by the Federal Reserve and Treasury Departments under successive administrations (G.W. Bush and Barack Obama) papered over the underlying causes of the financial meltdown of 2007-2008, made the “too big to fail” problem worse, and used taxpayers money to pour tens of trillions of dollars down a sink hole of non-performing leveraged debt, on the basis of an armageddon scare-story that the world would have come to an end if the big Wall Street banks and insurance companies were not bailed out at one hundred cents on the dollar.   


The Angelides Commission interviewed 700 people, during their yearlong investigation. They held field hearings all across the United States. They have now made much of that material available on their website (, and they have received a grant from Stanford University to conduct further research, albeit no longer under Congressional sponsorship.


It is, in my humble opinion, impossible to comprehend the major developments taking place around the world at this moment, without a clear understanding of the root causes of the worst financial and economic crisis of our lifetimes. The fact that at least $17 trillion has gone, so far, into the bailout of American, European and Japanese banks, and that Federal Reserve Chairman Ben Bernanke has kept the printing presses rolling non-stop (next month, Bernanke is likely to announce “QE3” - a Federal Reserve purchase of another $1 trillion in US Treasuries from the Big Six Wall Street banks to keep them afloat), has caused a 40 percent devaluation of the US Dollar since the beginning of the crisis. At least part of the reason for commodity inflation is this Dollar devaluation, since most commodities are pegged to the US Dollar.


Angelides doesn’t just take the problem back to the Summer of 2007, when the housing bubble burst. He actually traces the entire history of the successive deregulations of the financial system, focusing particularly on the 1999 repeal of the Depression era Glass Steagall Act, which broke up the big Wall Street banks into separate commercial and brokerage operations, thus insulating taxpayers from bailing out purely speculative gambling losses by Wall Street biggies, and protecting commercial bank deposits, with the creation of the Federal Deposit Insurance Corporation (FDIC). Glass Steagall was repealed in 1999. President Clinton’s then-Treasury Secretary Larry Summers and Alan Greenspan were two of the architects of the takedown of Glass Steagall. Remember them? There are many in Congress and even on Wall Street who believe that it is time to reinstate Glass Steagall and end the era of TBTF (too big to fail).


It is no surprise that questions have arisen since the events in Tunisia and Egypt, whether Bernanke’s “quantitative easing” has contributed to the commodity inflation and to the unrest now sweeping the planet. There is obviously no simple answer to that question, but the demeaning of the US Dollar was certainly a factor. The FCIC report does not try to water down or simplify the process, leading to the biggest financial fiasco in memory. It spells out, step by step, all the errors, all the short-sighted greed-driven decisions, all the ways that bankers, rating agencies, hedge fund managers, real estate brokers, and elected officials ignored reality that was staring them in the face. But it is remarkably well-written and gripping. Not Tom Clancy, but you will not be bored.


I don’t expect that everyone will read the report, and I don’t expect that everyone will agree with the Angelides findings. Nevertheless, it is an historic document. Under other circumstances, with less partisan warfare in Congress, a full public airing, as was done in 1933-34 with the Pecora Commission (public hearings of the Senate Banking Committee), would have perhaps been preferable to a yearlong probe, largely conducted behind closed doors, culminating with a 500 page document. But all of those shortcomings aside, I am stunned by something on practically every page of this report. I hope I have sparked a few interested parties to read the report. You will not regret the experience.


The author is Senior Editor, Executive Intelligence Review

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