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sponsorship
(Okay, Kim Kardashian would probably be a lot worse.)
So, I hope it doesn't violate any unofficial policy to discuss times certain of us XX Factorians have interacted "In Real Life" because I am going to mention the fact that some of us met Eliot Spitzer on Monday night at the Slate holiday party. Not because I care if he's sufficiently sorry for screwing prostitutes—I'm with you on that, Susannah—but because my brief conversation with the fellow speaks to a concern I have about the woman—and you won't be surprised I'm glad she's a woman!—Obama just appointed to helm the Securities and Exchange Commission, Mary Schapiro. Spitzer agreed with me that the campaign of incoming Treasury Secretary Tim Geithner to oust FDIC Chairman Sheila Bair was worrisome, because it suggests Geithner is exactly what you'd fear of someone with Geithner's credentials (Clintonite, New York Fed, Council of Foreign Relations, Kissinger Associates)—an insider. Now we have Schapiro, current CEO of the Financial Industry Regulatory Authority, the supposed "self-regulator" of the financial services industry.
If any regulatory body involved in this disaster has been a more abysmal failure than the SEC, it's the "self-regulator" that was supposed to monitor all those concerns the real (i.e., paid slightly less than $2 million a year) regulators had so steadily deregulated out from under them over the past 10 years: mind-blowing overleverage and the attendant counterparty risk, unbridled short-selling, the over-the-counter derivatives that amplified the current crisis, etc., etc. What was Schapiro doing all that time? Cracking down on over-the-top Wall Street …
Parties! (What, you thought I was going to say "bonuses"?) Excuse me while I shoot myself in the face for a second. Would it have killed Obama to appoint someone with the perspective to understand that all those unseemly parties wouldn't have been possible if not for the phony "profits" Wall Street booked selling everyone on their mathematical model-supported certainty that everything would keep going up forever?
Schapiro also took credit in an October speech for pushing to regulate credit-default swaps, the "insurance" contracts on mortage-backed securities written with reckless abandon by many of the recipients of our trillion-dollar bailout. I'm no expert, but nowhere have I read that Wall Street's bank-funded self-regulatory trade group was a leading voice in favor of getting the government to regulate the financial instruments Wall Street claimed it could self-regulate. Even ickier, this smacks of the same sort of retroactive flip-flopping (flip-swapping!) Geithner's promoters have displayed in trying to advance the notion that Geithner, had he been "left to his own devices," would not have allowed Lehman Bros. to go bankrupt. We know who did advocate regulation of derivatives—Schapiro's successor at the Commodity Futures Trading Commission, Brooksley Born. By all accounts, Born was less "popular" in the post than Schapiro had been. Now more than ever, we need a few good unpopular people in these positions. Why not someone like Born or Bair? Or even less popular right now, a certain Slate columnist? A little exile can be an edifying thing, but no one seems more insider-y than Geithner and Schapiro. (And ugh, for that matter, Caroline Kennedy.)