SIGN IN to access Harper’s Magazine
1. Sign in to Customer Care using your account number or postal address.
2. Select Email/Password Information.
3. Enter your new information and click on Save My Changes.
Subscribers can find additional help here. Not a subscriber? Subscribe today!
When Barack Obama picked Mary Schapiro as head of the Securities and Exchange Commission, her nomination was almost universally hailed in the press. Schapiro, it was said, was just the type of hard-nosed reformer needed to clean up the SEC. I took a look at Schapiro’s record at the time and wasn’t terribly impressed. As far as I could tell, Schapiro had been complicit in the whole derivatives scandal as head of the Commodity Futures Trading Commission back in the mid-1990s.
Now Steven Pearlstein of the Washington Post has examined Schapiro’s record and also finds her to be an uninspired pick:
So what’s the problem with Mary Schapiro as SEC chairman? The problem is that there is nothing in her record to suggest that she is likely to clean house at the agency and launch a brutal and sustained assault on Wall Street culture.
Remember the good old days when corporations would routinely manipulate earnings so that they came out just as the analysts expected? Or when analysts used to issue buy recommendations for stocks they knew were lousy just because it helped their firms win investment-banking business? Or when brokerage firms would routinely put clueless customers in mutual funds that offered high commissions, not the best results? Or when investment banks would put aside shares in the hottest IPOs for the personal accounts of corporate chief executives who steered underwriting business their way?
These practices weren’t secrets — to anyone even vaguely familiar with the industry, they were hidden in plain view. And yet for years, no regulator, including Schapiro, was willing to risk being demonized by the industry, criticized by Congress and overturned by the courts to do what was necessary to stop these practices. Indeed, in every case, it was only after investors had lost their money and some other regulator had begun a crusade that Schapiro finally showed up to close the proverbial barn door.
Given the scope of the problems at the SEC, and the importance of the agency’s role in trying to restore some sanity to financial markets, Schapiro is clearly not the best choice.
More from Ken Silverstein:
Perspective — October 23, 2013, 8:00 am
How pro-oil Louisiana politicians have shaped American environmental policy
Postcard — October 16, 2013, 8:00 am
A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits
Chance that an American would give up at least one week of life to avoid taking a pill every day:
Iowa urologists reported that only a minor portion of locker-room teasing arises from “the presence of excess foreskin”; most teasing targets small penises.
A pair of Russian film directors asked President Vladimir Putin to invest $18 million in a new restaurant chain intended to drive McDonald’s out of the Russian market. “Every project these days,” a Russian television personality said of the proposal, “must be smothered in patriotic sauce.”
Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!
“Shelby is waiting for something. He himself does not know what it is. When it comes he will either go back into the world from which he came, or sink out of sight in the morass of alcoholism or despair that has engulfed other vagrants.”