Barofsky to the SEC? Well, we can dream
Let’s wave a magic wand, and Neil Barofsky is appointed and confirmed to the SEC chairman position. What do you do to the SEC bureaucracy to achieve the goals you lay out for it, and what are those goals?
But look, I know, to me, the biggest priorities of where we are today in 2012 and where I think the agency should focus on going forward is fundamental stuff, that’s fairly obvious really. Transparency, being an agent for transparency in the markets. When you look at the big financial institutions … this is a financial crisis that was caused in part by a lack of transparency, by a lack of understanding of what was going on under the hood of a lot of these institutions, their exposure to certain assets, particularly real estate. Part of what triggered those great runs on Bear Stearns, and then Lehman, and then AIG, was a sense of the unknown. And that’s going to continue to trigger potential crisis. ...
I think the second area is on the enforcement side. I would want to have a real reexamination of the neither-admit-nor-deny settlement approach toward enforcement. ... [T]he neither-admit-nor-deny approach ... is an approach where if your goal is to maximize returns for the agency and the victims in the form of restitution, it’s probably the right approach.
If you come with a different approach, a different perspective, my perspective, an equally important if not more important goal is deterrence, and causing enough pain so that these types of behaviors don’t continue
I guess as far as "transparency" goes... The whole financial system -- which is to say the the system run by the people who run the country -- is completely transparent as it is: It's openly criminal and openly fraudulent, and at the executive level: That's what accounting control fraud means. So Barofsky is right, in that "neither-admit-nor-deny settlements" are exactly like a street game of three card monte, where every so often the grifters slip the cop on the beat a fiver, and then go back to cheerfully shilling and defrauding the rubes. To anybody who knows the score, that game is transparent, but the transparency avails us nothing, and the game goes on.
I don't know know how to break the cycle. It's not clear to me how ruling factions in the elite can simultaneously seek funding from criminal elites in the form of campaign contributions, and nudge those same elites away from criminality by enforcing the rule of law, if that still exists. I do think that a technocratic approach a la Elizabeth Warren -- seeking "transparency" through human-readable mortgage documentation -- will prove completely impotent, though presumably and possibly by design that will take a decade or so to work out. And it would be nice to avoid replacing one criminal faction with another criminal faction. (Eerily, up here in the great state of Maine, a corrupt Democratic administration was replaced with a Tea Party-inflected administration that is not corrupt. It's an interesting contrast. I don't know quite what to make of it.)
Then again, I'm a writer, not an organizer. So, doubtless there is something stirring right now that none of us are aware of yet...