Dem uses crisis report to mount defense of Dodd-Frank

{mosads}Johnson’s comments came at a hearing held by his panel on the report issued in January by the Financial Crisis Inquiry Commission (FCIC). The report, the first official government conclusion on the cause of the financial crisis, cast blame far and wide for the dramatic downturn. It pointed the finger at both lax regulators and opportunistic Wall Street giants or setting the stage for the worst crisis since the Great Depression.

However, the findings of the group were muddied by the partisan breakdown that emerged during its work. Ultimately, the panel’s official conclusions received just the backing of its six Democrats, while the four Republicans offered two dissenting takes.

Johnson argued that the group’s findings were proof that Dodd-Frank will play a vital role in preventing a similar crisis in the future.

“The FCIC report shows that repealing or undermining Dodd-Frank, as some have proposed, would take us back to the same, weak financial system that ushered in the worst economic crisis in generations,” he said.

However, his GOP counterpart, Sen. Richard Shelby (R-Ala.), was dismissive of the FCIC’s findings, arguing that such an inquiry should have been undertaken by the committee itself.

He pointed out that the panel launched the Pecora investigations after the Great Depression, which laid the groundwork for major reforms such as the creation of the Federal Deposit Insurance Corporation (FDIC) and Securities and Exchange Commission (SEC).

Noting that Dodd-Frank was signed into law before the FCIC’s report was issued, he called the financial reform law a “wish-list of reform long sought by liberal activists, special interests and federal bureaucrats.”

“I believe that this committee squandered an historic opportunity when it chose not to conduct its own inquiry,” he said. “It only exacerbated that mistake when it decided to legislate before the commission even had a chance to begin its work, let alone finish its report.”