Fallout: The Financial Crisis

Commission to look at causes of crisis

Marketplace Staff May 21, 2009
HTML EMBED:
COPY
Fallout: The Financial Crisis

Commission to look at causes of crisis

Marketplace Staff May 21, 2009
HTML EMBED:
COPY

TEXT OF INTERVIEW

Kai Ryssdal: Just as we don’t know how the recession and the financial crisis are going to end, so we don’t really know exactly what happened to get us here either. Yes, we realize there was a real-estate bust and some egregious financial shenanigans on Wall Street. But the case can be made that unless we understand exactly how the crisis happened, we might be doomed to repeat it.

Last night the president agreed with Congress that it is one of those things that needs its own commission. The Financial Crisis Inquiry Commission, to be precise. North Dakota Democrat Kent Conrad was one of the sponsors of the bill. Senator, good to have you with us.

SENATOR KENT CONRAD: You bet, good to be with you.

RYSSDAL: On the theory that a financial crisis waits for no one, how soon do you think this commission can get to work?

CONRAD: Well it can get to work as soon as the members are named. But we’re not asking for the results until December of next year because we want to keep it out of the political process, keep it out of the elections. So that we can get a very clear, objective review of what occurred in the financial collapse, why it happened, who’s responsible and how do we prevent it from happening again.

RYSSDAL: If we’re lucky, though, this whole thing — this recession and financial crisis — will be in the rear-view mirror by the end of next year. Aren’t you worried that’s just a little bit too long?

CONRAD: No, I think the purpose of this commission is really to make certain that we understand all of the factors that came together to create almost a global financial collapse, so that we know what can be done to guard against it ever happening in the future. And, you know, that doesn’t prevent us from taking steps now based on what we already believe and what we already know. But this is modeled after the 9/11 commission. And we think it requires a more reflective, long term, completely out of partisan politics review of what happened. And what are the steps that can be taken so that we keep this from happening.

RYSSDAL: You’re also empowering this commission to refer cases to the attorney general. Are you expecting to find laws have been broken, that people actually engaged in crimes in this whole thing?

CONRAD: I do. I believe there was serious financial fraud in some of the dealings, some of the major enterprises. I believe there is criminal wrongdoing.

RYSSDAL: Obviously you’ll be looking at Wall Street and what some of the folks up there did. Are you going to look equally as hard at what happened in Washington? Regulatory agencies there, some of the things Congress might have done?

CONRAD: Absolutely. All of us need to have our actions scrutinized, and I would include Congress in that. What mistakes were made here? What were mistakes that were made by major financial firms, by regulatory agencies? Certainly the rating agencies, they were asleep at the switch. Where did the breakdowns occur that we need to fix and make certain never happen again?

RYSSDAL: Once we figure all that out though, senator, how is this going to help individual investors, retirees, pension holders? You know, the people who make this economy go.

CONRAD: I think it will help by restoring confidence. And also helping us all understand what are the risk factors out there that weren’t fully appreciated and not properly scrutinized. And not dealt with effectively.

RYSSDAL: Kent Conrad, democrat of North Dakota. Senator, thanks very much for your time.

CONRAD: Good to be with you.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.