The appointment of Representative Christopher Cox to lead the Securities and Exchange Commission is as shameful as sending John Bolton to the United Nations, and should arouse a comparable swell of objections. Cox is a wholly owned agent of the financial and corporate interests the SEC is supposed to regulate. His political career has been financed by the same sectors–banking, accounting, corporate–that produced scandals like Enron and WorldCom. In return, he’s worked to shield his patrons from the scrutiny of the government regulators, whom they duped, and the shareholders, whom they swindled.
Bush and his White House are beyond shame, of course. Their “code of honor” is as straightforward as the Mafia’s: Always protect ideological kinfolk; always reward monied friends. What’s public policy got to do with it? Or a decent respect for public values? The Bush cynics are assuming they can fog this one past Congress without awakening the public. Many Americans were deeply injured by the criminal collaborations of financiers and money-crazed CEOs. Yet the SEC is not well-known, its crucial role in policing Wall Street not widely understood. If the cynics prove correct and Cox is confirmed, replacing resigning chairman William Donaldson, George W. Bush will become an unindicted co-conspirator in this looting.
Bush intends to shut down any further possibility for reform, much to the relief of his patrons in corporate boardrooms and leading banks, plus their propagandists at the Business Roundtable, the US Chamber of Commerce and the editorial page of the Wall Street Journal. What scandal? These things happen in capitalism; get over it, losers. The financial-market casino will be open again for business, relieved of the modestly stiffened supervision adopted in law and regulation after the stench of Enron et al. Bring back your savings, suckers, and take another chance.
Donaldson was not exactly a reform tiger but rather a traditionalist Republican and Wall Street blue blood sincerely shocked by the scale and breadth of his industry’s dishonesty and grand larceny. So he sided on occasion with the two Democratic commissioners, and they adopted tougher rules for mutual funds and corporate reporting, as well as other measures. After Wall Street titans began a drumbeat of attacks a year ago, Donaldson tried to appease them, stalling on crucial reforms that would have given shareholder institutions like public pension funds greater leverage to curb reckless CEOs. But the dons offed him anyway.
Papering over the greatest set of financial scandals since the 1920s will eventually be ranked among Bush’s most destructive accomplishments. Democrats should wake up from their own complicities with high finance and choose the side of popular outrage, discarding the usual bipartisan presumption that members of Congress get an easy ride on confirmation to high positions.
Bush’s blatant payback to the corporate and financial guys contradicts all the standard claims of the US financial system: transparency, trustworthy information and markets, and timely accountability to ordinary shareholders, who are said to be the true “owners” of American corporations. It also mocks Bush’s own rhetoric about creating an “ownership society”: Yes, you can buy and own something called a stock share, but don’t imagine that gives you any right to mess with the moguls who run these organizations, or expect reliable facts from them. At great personal expense, a lot of Americans have learned the contrary truth about Wall Street in the past few years. Now they need to turn that knowledge on the “goodfellas” in Washington.
