Some of the country's top financial scholars met over the weekend with the panel charged with investigating the causes of the financial crisis. What followed was the kind of open, honest debate that is so rare in Washington.
The event was a forum organized by the bipartisan presidentially-chartered Financial Crisis Inquiry Commission. The academics gathered Friday and Saturday presented their thoughts on topics ranging from Too Big to Fail to subprime mortgages, and then engaged in a running debate among themselves and the commissioners.
But rather than the kind of staid or theatrical hearing often seen in Congress, in which talking points are repeated and participants talk past each other, the academics and the commissioners engaged each other in a running debate in which theories about the origin of the financial crisis were questioned and defended.
The academics pointedly confronted one another, scoffing openly at various points. The commissioners, who include among their ranks powerful former House and Senate committee chairmen, were politely corrected on some points, and not-so-politely interrupted on others.
"I hope they do more of these," said one panelist, John D. Geanakoplos, an economist at Yale University. Bill Thomas, the commission's vice chairman and former chairman of the House Ways and Means Committee, said the panel had been holding such events in private, so it figured it would hold one in public, too.
Held at American University's Washington College of Law, the forum was captured on video, broadcast live and archived on the Internet. Some of the highlights:
- Geanakoplos, whose presentation was on risk taking and leverage, told the panel that the Federal Reserve is not keeping track of leverage -- a scary realization given that excessive leverage was one of the key causes of the financial collapse, he argued.
But unfortunately, less than 2,000 people tuned in online to watch the hearings, according to spokesmen for the FCIC and the law school.