Bubbles Happen: Partisan Divide, the Minority Report, and the Financial Crisis Inquiry Commission (Part 1)

The Financial Crisis Inquiry Commission was created in 2009 in the Fraud Enforcement and Recovery Act of 2009 and tasked with the responsibility for examining the causes of the financial crisis. The membership was to be bipartisan, with six appointed by the majority parties in the House and Senate (controlled by the Democrats at the time) and four by the minority (Republican appointees).  The effort was to be a serious one.  The FCIC could even compel testimony through the use of subpoenas. 

The Act created a December 15, 2010 deadline for any report by the Commission.  The deadline passed without a report by the entire Commission. This was not a surprise.  A majority of the Commission had voted in November to delay the Report until sometime in January 2011. 

Nonetheless, the 15th did not come and go without activity.  The four Repulican members issued a Report titled "Financial Crisis Primer" presumably in an effort to meet the statutory time period.  The Minority Report begins in an inauspicious manner, noting that "[b]ubbles happen."

The decision to issue the Minority Report apparently came as a surprise to the remaining members of the Commission.  See FCIC Press Release, Dec. 15, 2010 (noting that "some members of the Commission made public their personal views on the financial crisis. The Commission had not previously seen or had an opportunity to review what was released today.").

The action and reaction reflect an obvious partisan divide on the FCIC.  This is unfortunate.  What is needed is serious reflection on the causes of the worst financial crisis since the Great Depression, not a forum for partisan discord.  On the other hand, Congress gave to the majority/minority leaders in Congress the authority to appoint the members so perhaps it was to be expected that the partisan divide in Congress would likewise be reflected on the FCIC. 

In the next post, we will take a look at the contents of the Minority Report.