Simon Johnson, former chief economist for the IMF, has a brief comment on the Washington Post's The Hearing this morning on the overwhelming U.S. Senate vote to hold hearings into the current economic crisis. He also refers to his appearance yesterday on Bill Moyer's Journal in which he and Michael Perino discussed the 1933 Pecora Hearings in which an upstart New York prosecutor, acting as counsel for Senate hearings, almost singlehandedly turned public anger massively against the titans of Wall Street, on whom they placed blame for the horror of the Great Depression. Here is a preview:
Simon Johnson also has an essay in this month's Atlantic. In it he makes the provocative argument that the crisis in the U.S. is much like earlier crises in developing economies brought about by the disproportionate power of financial elites on government. Johnson makes a compelling argument that the economic prescriptions are relatively unimportant. What is crucial for him is removing the hands of the financial elite -- Wall Street -- from the levers of power.
It seems increasingly clear that the American public at least is losing patience with explanations for this debacle that focus on either outside influences or inadequate regulation. As in 1933, they seem increasingly hungry for an opportunity to bring those they see as responsible to account. Whether or not this is a good thing, it is an opportunity for the Obama administration to stop bowing to the needs of these elites, something particularly painful to watch with Timothy Geitner, and to begin taking the bold, decisive steps that Roosevelt for one was able to in the shadow of the Pecora hearings.
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