Commentary on Post on the Harvard Law School Forum
The Harvard Law School Forum on Corporate Governance and Financial Regulation
Posting: Financial Crisis Inquiry Commission to Begin Investigations
“The hope of the twentieth century rests on its recognition that war and depression are man-made, and needless.” Tragedy & Hope, Dr. Carroll Quigley, Georgetown University 1966
Whether or not the commission has the special authority of referral seems less important, as I would imagine that ability is implicit.
Briefly the purpose and charge of the commission might be more important than meets the eye. The regulatory framework that exists between the Executive and Legislative branches speaks to a system which has been quite confused and dysfunctional. The charge of this commission is of paramount importance for several reasons. Not the least of which is contained in the quote above – it is man-made.
The commission, if it diligently pursues the true causes of the financial crisis, may be the only body that can provide a framework to dispassionately map out the architecture of the crisis and make strong recommendations to be able to:
1) Assuage the effects of the turmoil or crisis, and
2) Recommend policy and regulatory reform to create a playing field in which similar events will not occur.
There are several areas or categories which the commission has the capability, with the expertise of its members, to review. The restoration of confidence in the system would embrace very determined and decisive action – a sort of political will which has not been demonstrated as of yet. These are serious matters, which have not had to be dealt with in several decades, and some would argue several centuries. Civilizations throughout history have been plagued with economic crises – there was even a residential housing bubble in ancient times. Too often in today’s modern society, complicated and daunting issues are generally found to be viewed with the attitude “it’s not important how we got here but what we do about it.”
However, it is important to understand the evolution, peg the causal events at the core, and recommend policy to prevent its occurrence in the future. The stakes are high: “From these studies it would seem that civilizations pass through a process of evolution…Racked by internal struggles of a social and constitutional character, weakened by loss of faith in its older ideologies and by the challenge of new ideas incompatible with its past nature, the civilization grows steadily weaker until it is submerged…, and eventually disappears.” Ibid.
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Stephen R. Ganns has more than 30 years of real estate experience in acquisition, management, restructure/workout and financing.
