By rescuing the financial system without reforming it, Washington has done nothing to protect us from a new crisis, and, in fact, has made another crisis more likely.
In those first grim days after February 2008, I had no immediate grasp of the magnitude of the meltdown. There was confusion and misinformation at every level. Was the ARS market blowout confined to a few sectors or was it a much deeper systemic problem? Had the entire auction-rate market imploded? I had yet to confirm that virtually every bank and brokerage in the United States was involved, as well as foreign banks such as UBS, Credit Suisse, and Deutsche Bank.
The media wasn't jumping on the story—not yet. This was puzzling. How could such a seemingly major economic event stay off the front pages? Mainstream headlines were focused on Iraq, Scooter Libby, clouds over the Cheney vice presidency, and "change we can believe in." The collapse of the Republicans in the election cycle and reemergence of the Democrats gobbled up much op-ed space. The business pages of the Washington Post and the New York Times were busy picking through the confusing "credit crisis." The Dow and other market indexes were dropping. A mortgage meltdown was under way. Yet the ARS scandal was just beginning to creep into print on tiny, mouse-like feet.
Even now, as I write this in August 2009, none of the major TV networks have run an ARS expose. Where's 60 Minutes when you need it? Not a peep ...