A Government of Zero Accountability

by Odysseas Papadimitriou on April 30, 2009

ZeroThe barbarians, so the saying goes, are no longer at the gates.  They’ve stormed through.  In many cases, they were practically let in by negligence of the regulators whose job it was to protect us from greedy swindlers, inventive accountants, and fraudulent lenders.  The gatekeepers themselves, the various federal regulators, have not been punished for failing in their duty to protect America.  They remain, even now, at their posts as the country reels from the damage it has taken from the various scandals and crimes committed against its economy and its taxpayers.  Those whose job it was to police against these crimes have failed us and we wonder why they have not been made accountable.

Why, for instance, didn’t Christopher Cox, the head of the SEC, not resign after the Madoff scandal?  Surely the crime was glaring enough to call his competency into question.  Shouldn’t he have taken some responsibility as the scheme was carried out on his watch?  Cox offered no public apology and was never taken to task for the calamity that resulted from his oversight.  He just stayed in, despite the very real complaints of his critics, until he was replaced by the next administration.

The case of Christopher Cox is symptomatic of how America has dealt with all of its failed watchdogs.  Nobody at the FBI resigned for their failure to first discern, and later prosecute fraudulent lenders.  Instead, the FBI made a pact with the Mortgage Bankers Association—the very people they ought to have been investigating (for more information, watch the video from below).  We have yet to see any federal regulator be brought to task or forced to resign for the housing bubble and we have yet to see any member of congress resign for their role in the CDS scandal.  No head regulator has resigned over the failure of banks including Citigroup, Washington Mutual, Bear Stearnes, Lehman Brothers, Fannie Mae, or Freddie Mac.

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Where is accountability in all this?  There are people whose job it is to make sure that catastrophe does not befall our system.  These same people have utterly and obviously failed.  It would be the decent thing that they remove themselves from their posts for having failed at their jobs, and if they will not, it is only reasonable that they be removed from their post so that someone more vigilant might take their place.


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