Washington Babylon — January 7, 2009, 8:47 am

Washington Post Takes Critical Look at Obama’s SEC Pick

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.

Share
Single Page

More from Ken Silverstein:

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Postcard October 16, 2013, 8:00 am

The Most Cajun Place on Earth

A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits 

Get access to 164 years of
Harper’s for only $39.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

October 2014

Cassandra Among the
Creeps

= Subscribers only.
Sign in here.
Subscribe here.

“Today Is Better Than Tomorrow”

= Subscribers only.
Sign in here.
Subscribe here.

PBS Self-Destructs

= Subscribers only.
Sign in here.
Subscribe here.

The Monkey Did It

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
"In mid-August, hundreds of displaced Christians who had fled to Erbil were moved by Kurdish authorities into the concrete shell of a half-built mall. "
Photograph by Sebastian Meyer
Article
“Today Is Better Than Tomorrow”·

= Subscribers only.
Sign in here.
Subscribe here.

“Iraq has every disease there is; its mind is deranged with too many voices, its organs corrupted, its limbs only long enough to tear at its own body.”
Photograph by Benjamin Busch
Post
Flying Blind·

= Subscribers only.
Sign in here.
Subscribe here.

“President Obama’s war against the Islamic State will represent, by a rough count, the eighth time the U.S. air-power lobby has promised to crush a foe without setting boot or foot on the ground.”
Article
The Monkey Did It·

= Subscribers only.
Sign in here.
Subscribe here.

“In Murakami’s fiction, what presents itself as a key reveals itself simultaneously to be a keyhole.”
Illustration by Steven Dana
Article
PBS Self-Destructs·

= Subscribers only.
Sign in here.
Subscribe here.

“The present state of PBS, the result of built-in deficiencies and ideological conflicts, was almost an inevitability.”
Illustration by Thomas Allen

Estimated percentage of U.S. gasoline consumption that occurs during traffic jams:

4

In India, 1.8 million female children were estimated to have died between 1985 and 2005 as an indirect result of domestic violence against their mothers; the boys of abused mothers were not at increased risk of death.

Vanilla latte and lemon pound cake continued to be the best-selling items at the Starbucks at CIA headquarters, where baristas do not write customers’ names on their cups.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

In Praise of Idleness

By

I hope that after reading the following pages the leaders of the Y. M. C. A. will start a campaign to induce good young men to do nothing. If so, I shall not have lived in vain.

Subscribe Today