TEXT OF COMMENTARY

Kai Ryssdal: For all the books and special reports and stories that have been written about the financial crisis, the official government investigation doesn’t get started until tomorrow. The Financial Crisis Inquiry Commission holds its first meeting in Washington in the morning.

But we have been down this road before. During the Great Depression the Pecora Commission investigated the Wall Street Crash of 1929. And 75 years later the modern version might be as effective. Commentator John Steele Gordon says don’t count on it.

JOHN STEELE GORDON: The Pecora Commission was frankly a bit of a media circus. At one point a photographer plopped a midget into the lap of J.P. Morgan Jr., and the resulting photograph was on the front page of nearly every newspaper in the country.

But the Glass-Steagall Act of 1933 and the Securities Acts of 1933 and ’34 were deeply influenced by the Commission’s investigation and findings. Thus the Pecora Commission helped shape the new regulatory framework that was among the most important factors in bringing about the great prosperity of post-war America. It was, therefore — circus or no — a great success. I’m afraid the same won’t be said for the inquiry commission that starts tomorrow.

In the 1920’s, Wall Street had become very corrupt. In the recent crisis, while Wall Street certainly made big mistakes, federal regulatory failure and corruption are as much to blame as Wall Street greed and bungling.

For example, mortgage lenders Fannie Mae and Freddie Mac were at the very heart of this mess. Theoretically independent, profit-seeking corporations, they are headquartered in Washington, D.C., largely managed by politicians not businessmen, and deeply corrupt, with subprime mortgages reported as prime and books cooked to produce executive bonuses.

And they were woefully under-regulated. The government has had to pour $400 billion into Fannie and Freddie to cover their losses, eight times as much as was lost in the failure of Enron.

Will they be as deeply investigated as Wall Street banks and rating agencies? Here’s an indication: The commission is charged to “examine the causes of the current financial and economic crisis in the United States.” Specifically, it is to look at 22 areas. But while 19 of these have to do with Wall Street’s failures, only three deal with regulatory failure. One with Fannie and Freddie.

And while the commission is supposed to be bi-partisan, six of the commissioners were appointed by Democratic leaders, only four by Republicans.

So don’t expect Rep. Barney Frank and Sen. Chris Dodd to be summoned to testify any time soon.

Frankly, it looks to me like the fix is in.

RYSSDAL: Historian John Steele Gordon’s most recent book is called “An Empire of Wealth.”