Phil Angelides: Financial crisis 'didn't need to happen'

The Sacramento BeeJanuary 28, 2011 

Sacramentan Phil Angelides, appointed by Congress to investigate the financial crisis of 2008, declared Thursday that the entire mess could have been avoided.

In a blistering report that followed 18 months of testimony and fact-gathering, Angelides and his Financial Crisis Inquiry Commission blamed a wide cast of characters for the epic meltdown, including executives of insurance giant AIG and Goldman Sachs and government policymakers like Alan Greenspan, Timothy Geithner and Ben Bernanke. The report said human error created the crisis.

"This didn't need to happen," Angelides, the commission's chairman, said in a phone interview with The Bee.

But the release of the report at a Washington press conference was anything but an unqualified win for Angelides, a former California state treasurer and Democratic nominee for governor.

The crisis commission's findings were caught up in immediate partisan bickering. While the report was endorsed by the six Democrats on the commission, the four Republicans refused to sign off on its conclusions.

Instead, the Republicans issued dissenting opinions – two of them, in fact – that took not-so-gentle swipes at the Democrats' conclusions. One of the Republicans, Peter Wallison of the American Enterprise Institute, said the commission exhibited a "lack of objectivity."

Angelides said he isn't bothered by the Republicans' protests.

"Every major project like this has challenges and critics," he said. "We called this straight-up without regard to partisanship."

Angelides and his allies blamed mortgage lenders for the flood of risky subprime loans that ignored "a borrower's ability to pay." Wall Street investment banks recklessly packaged the loans into toxic securities that exposed the entire financial system to melt down, the report concludes.

All the while, government watchdogs were asleep. For more than 30 years, lawmakers and presidents bought into the free-market ethic backed by the likes of Greenspan, the former Federal Reserve chairman.

To read the complete article, visit www.sacbee.com.

McClatchy Washington Bureau is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service