Today's Stories

October 9, 2008

Robert Bryce
From Enron to the Current Meltdown

October 8, 2008

Alexander Cockburn
Imbecilic Tedium

Linn Washington, Jr.
Palin's Racist Remark

Mike Whitney
To the Bunkers!

Deepak Tripathi
The West is Broke

George C. Wilson
Butter Over Guns? McCain and Obama on Defense Issues

Andy Worthington
Seized in Pakistan

Charles R. Larson
"I'm John McCain and I Approved This Lie"

Patrick Irelan
Ecuador's Choice

Matthew Koehler
Log, Baby, Log: Bailing Out the Timber Industry

Stanley Heller
Time to Design a New Economy

Daniel Gross
Working Class Hero: Alexandra Svoboda

Kimberly Hartke
Raw Milk and Civil Liberties

Website of the Day
Olivia Wilde Does It Early

October 7, 2008

Patrick Cockburn
Obama and McCain's Goofy Afghan Bluster

Gary Leupp
Seven Years in Afghanistan:
From "War on Terror" to
"War of Terror"

Uri Avnery
Olmert's Final Divorce
From "All of Eretz Israel"

P. Sainath
The Cop-Out Election
Major Candidates, Congress, Press, All Fail in the Big Crisis

Peter Morici
The Dow Tanks as Bank Bailout Fails to Restore Confidence

Conn Hallinan
The Great Game in the Caucasus:
Bad Moves by Uncle Sam

Martha Rosenberg
Training America's Youth
Today a Pheasant, Tomorrow Osama

Binoy Kampmark
Let's Talk About Extinction:
CERN and Halo

October 6, 2008

Paul Craig Roberts
A Futile Bailout as Darkness Falls on America

Mike Whitney
Still on the Edge of the Abyss

Tariq Ali
Goodbye to Grosvenor Square

Emily Horowitz
How People Tell Cops They're Guilty Even When They Aren't

Michael Hudson
What Did Jesus Say?
A Christian Perspective on the Paulson Bank Bailout

Ron Jacobs
Winter Soldiers and Washington's Wars

October 3 - 5, 2008

Paul Craig Roberts
Why Paulson's Plan is a Fraud

Saul Landau
The Chutzpah of Hank Paulson

Jonathan Cook
The Souring of a West Bank Romance: Israel's Army and Settlers Fall Out

Andy Worthington
The Dark Heart of the Guantánamo Trials

Dave Marsh
Bono (Himself) Challenges Me to a Debate

Sasan Fayazmanesh
Using the IAEA to Spy on Iran

John Ross
Massacre in Morelia

Brian Cloughley
The Unacceptable Face of Capitalism

Wajahat Ali
Dueling Partners: an Interview with Tariq Ali on Pakistan

Robert Schwartz
A Serious Blow to the Rights of U.S. Workers: NLRB Limits Political Strikes

Alan Nasser
FDR's Response to the Plot to Overthrow Him: a Paradigm for Today's Democrats?

David Ker Thomson
The Case for Drunk Driving

Peter Morici
Gone in 30 Days: U.S. Loses 159,000 Jobs in September

William Blum
When is a Holocaust Not a Holocaust?

William S. Lind
War on Two Fronts: Without Railroads

Michael Donnelly
The Ghost of Gen. McClellan

Thom Rutledge
On Presidential "Rule"

Manuel Garcia, Jr.
Science and the 2008 Presidential Elections: a Survey of the Candidates

Dave Lindorff
Calling the Problem Early

Cindy Ellen Hill
Waging a Sustainable Peace?

Paul Krassner
Dying to Get High: the Side Effects of Medical Marijuana

Daniel White
Vietnam's Masterspy

Poets' Basement
Corseri, Absher, Gibbons and Jenkins

Website of the Weekend
How We Lost Glen Canyon: a Legal Chronology

October 2, 2008

Paul Craig Roberts
Can a Bailout Succeed?

Joe Bageant
Speaking in the Tongues of Brokers: the Bailout in Plain English

Ralph Nader
Soulmates in Deregulation

Mike Whitney
Why the Bailout Stinks

Madis Senner
When Push Comes to Pull: How a Foreign Banker Invasion Sent the Markets Reeling

Winslow T. Wheeler
Congress as Usual:the Crisis Will Pass, But This Bunch Will Remain the Same

William Blum
A Boy's Game: the Origins of the Financial Crisis

P. Sainath
Wall Street Transforms Presidential Race

Website of the Day
McCain's Meltdown in Des Moines

October 1 , 2008

Glen Ford
The Last Hold Up

Steven Conn
Trashing Sarah Palin: the Boomerang Effect

Alan Maass / Lee Sustar
Why Not a Bailout for the Rest of Us?

Kenneth Couesbouc
The Blame Game: When Wall Street Pigs Sprout Wings

Stan Goff
How the Republicans Can Win (And Deserve It)

Adolfo Gilly
Racism, Domination and Bolivia

Rannie Amiri
Bombs in the Levant

Ismael Hossein-Zadeh
The Recurring Myth of Peak Oil

Adam W. Parsons
Food and Markets

Dave Lindorff
Bums' Rush to the Bailout: Where are the Hearings?

Douglas Valentine
The Bush Continuity Plan?

Adrien Rain Burke
The Party's Over: an Open Letter to Nancy Pelosi

Website of the Day
Sarah Palin's Beauty Pageant

September 30, 2008

Pam Martens
What Wall Street Hoped to Win

Chris Floyd
The Shadow of the Pitchfork: Elite Panic on Wall Street

Stephen Martin
A Biological Walk Down Wall Street

Deepak Tripathi
A Bitter Harvest in Afghanistan

Mark Engler
Bad Money

Jonathan Cook
The Attack on Zeev Sternhell: Has Israel Become a Breeding Ground for Jewish Settler Terrorism?

Dave Lindorff
The Power of No

Manuel Garcia, Jr.
Time for a General Strike?

Ahmad Faruqui
In Cold Blood: Buried Alive in Pakistan

John Chuckman
Will the Bride Wear White? As Rome Burns, Bristol Palin Prepares to Tie the Knot with Mr. "Sex on Skates"

David Macaray
Blaming the Labor Unions

Fatemeh Keshavarz
What Obama Could Have Said

Website of the Day
538: a Cognitive Map of American Politics

September 29, 2008

Mike Whitney
Black Monday

Jeff Gibbs
"Just Say No!" to Reverse Robin Hood

Paul Craig Roberts
Why America Should Listen to Ahmadinejad

Peter Morici
The Bailout and the Economy

Tim Wise
Racism as Reflex

John Walsh
Sarah Palin is a Rotten Mom

Uri Avnery
Israeli Fascism: Yes, It Can Happen Here

Alan Farago
Hell to Pay: the Financial Collapse and the Housing Market

Andy Worthington
Is Khalid Sheikh Mohammed Running the 9/11 Trials?

David Michael Green
Where's the Repudiation?

Carl Finamore
Capitalism on Steroids; Labor on Tranquilizers

Iris Keltz
Postcards from the DNC

Bill Hatch
Take This Shrimp Slayer!

Website of the Day
Tina Fey as Palin, Round Two

September 27 / 28, 2008

Alexander Cockburn
How McCain Blew It

Linn Washington, Jr.
Alaska's Blacks and Palin: a Strained Relationship

Christopher Ketcham
An Israeli Trojan Horse

Mike Whitney
The People vs. the Banksters

Kevin Alexander Gray Race in the Race: Is Obama Shining Us On?

Anthony DiMaggio
The Unspoken War: Pakistan, the Media and Nuclear Weapons

Mary Lynn Cramer
Their Assets; Our Debts: How Economic Crises Are Overcome

Marc Levy /
Susan Erony
War Jokes Wanted: No Laughing Matter

Stan Cox
Livestock of Mass Destruction: Germ Labs in the Heartland

Saul Landau
Election Drizzle

Ali Khan
Meltdown in American Markets: an Islamic Perspective

David Rosen
The Great Fear: the Sexual Politics of Sarah Palin

Todd Alan Price
Bailing Out the Foes of Public Eduction

Matts Svensson
The Red and White Bird in Gaza

Ron Jacobs
Pakistan Through the Eyes of a Native Son

Robert Fantina
McCain and the Economy

Richard Rhames
Hank-ering for a Bailout

David Krieger
The U.S.-India Nuclear Proliferation Deal

Seth Sandronsky
Rethinking Charter Schools

Charles R. Larson
Dear Mrs. Abacha: a Nigerian Email Romance

Kim Nicolini
Sadism in the Desert

Poets' Basement
La Morticella, Holt, Moser and Buknatski

Website of the Day
The Great Schlep

September 26, 2008

Moshe Adler
Bailing Out Wall Street Won't Save Main Street

Bill Quigley
The U.S. War on Unarmed Working Mothers

Jonathan Cook
When Archaeology Becomes a Curse

Manuel Garcia, Jr.
Visions of Pinpoint Control: the Romance of Laser Weapons

Madis Senner
Why the Bailout will Fail

Brian Cloughley
US Raids in Pakistan: Violations of Sovereignty

Niranjan Ramakrishnan
Oh, Henry!

Joanne Mariner
Passport Fraud and Torture

Dan La Botz
The Financial Crisis: a View from the Left

David Macaray
Ralph's Management Indicted by Federal Grand Jury

Website of the Day
Nader and Obama Girl at the Office

September 25, 2008

Michael Hudson
The Insanity of the $700 Billion Giveaway

Sharon Smith
Democrats and Corporate Bailouts

Ralph Nader
Who Will Show Some Backbone Against the Bailout?

Christopher Ketcham
The Economy of Dead Sperm (or What I Learned From My Race-Car Grandpa Who Had No Bankers)

Eric Toussaint
Is Another Third World Debt Crisis in the Offing?

Robert Weissman
Getting Wall Street Pay Reform Right

David Estabrook
A Better Bailout Plan

Nikolas Kozloff
The Voyage of the SS Peter the Great

Steve Early
The High Price of Purple Dissent

Judith Scherr
Blue Helmets in Haiti

Laray Polk
South Ossetia and Abkhazia: Notes from the Inside

Website of the Day
Letterman Spanks McCain

September 24, 2008

Paul Craig Roberts
The Bitter Fruits of Deregulation

Nikolas Kozloff
Palin at the UN: a Tutorial from Uribe

Robert Weissman
The Financial Crisis: How and Why Congress Should Play for Time

Andy Worthington
The Guantánamo Trials: Govt. Says Six Years Not Long Enough to Prepare Evidence

Steve Conn
Will Nader's Warning be Acknowledged in the Presidential Debates?

Karyn Strickler
The $700,000,000,000 Power Punch

Diane Farsetta
Stealth Marketers Gone Wild

Dennis Loo
Poisoned Legacy

John Halle
Wealth Tax Now!

Khalil Nakhleh
Palestinians Under the Occupation

Website of the Day
Nader: Debate Crasher

September 23, 2008

Rev. Jesse Jackson, Sr.
Bail Out on This Bailout

Michael Hudson
Henry Paulson and the New Yazoo Land Scandal

Tariq Ali
Why was the Marriott Targeted?

Patrick Dyer
A Death Row Visit with Troy A. Davis

Franklin Lamb
Hezbollah and the Palestinians

Joshua Frank
Oppose Barack Obama? How Dare Thee!

Alan Farago
Pushing the Referees: How the Financial Crisis Occurred

Dave Lindorff
The Bailout Will Kill the Dollar

Tanya M. Kerssen /
Roger Burbach
Bolivia's Popular Upheaval

Harvey Wasserman
Nuclear Power Liabilities Dwarf Bush's Wall Street Bailout

Website of the Day
Hammered by the Irish: the Video

September 22, 2008

Michael Hudson
The Paulson-Bernanke Bank Bailout Plan: Will the Cure be Worse Than the Crisis?

Mike Whitney
Mushroom Clouds Over Wall Street

Christopher Ketcham
Let It Collapse!

Ron Jacobs
The Predators' Bailout

Anne-Marie McManus
Lost in the Rhetoric of Crisis

Robert Weitzel
The Twin Terrors of the Holy Land: a Sexy Fundamentalist and a White-Haired Zionist

Wajahat Ali
An Interview with Howard Dean

John Ross
A New Cold War Comes to Latin America

Steve Breyman
Does the U.S. Really Need Cluster Bombs?

Patrick Bond
On the Bellies of the Filth

Uri Avnery
Fly, Tzipora, Fly

Carl J. Mayer
An Open Letter to Michael Moore (AKA God's Pen Pal): Whatever Happened to Voting Your Conscience?

Website of the Day
Stop the Execution of Troy Anthony Davis

September 20 / 21, 2008

Alexander Cockburn
Is This the Stake Through Neoliberalism's Heart?

Michael Hudson
America's Own Kleptocracy

Pam Martens
The Wall Street Model: Unintelligent Design

Lila Rajiva
Putting Lipstick on an AIG

Mike Whitney
Full-Spectrum Breakdown

Richard Rhames
A Bailout to Nowhere

Bill Moyers /
Michael Winship
The NY Yankees and the U.S. Economy

Bill and Kathleen Christison
The Making of Recent U.S. Middle East Policies: a New Study of Neocon Influence

Susan Block
Palin as Venus in Furs: the Dominatrix Politics of Drilling and Killing

Robert Fantina
Republicans and Subpoenas: Never the Twain Shall Meet

Heidi Walters
Hung Up on Route 36: an 18-Wheeler and a Nuclear Cask

David Yearsley
Germany's Lost Organs: When Bigger Was Better

Raymond J. Lawrence
The Politics of Tribulation: Sarah Palin and the Rapture

David Rosen
One Billion Pills Later: Viagra at 10

David Michael Green
Living in Sarah Palin's America

Anthony Papa
Imprisoned Voters and the Elections

Niranjan Ramakrishnan
Freddie, Fannie, Daddy, Nanny

Howard Lisnoff
When We Notice the Homeless

John Goekler
Leaving Every Child Behind

Missy Beattie
Impalement

Dave Zirin
Leave Josh Howard Alone

Charles R. Larson
Holden Caulfield, Rest in Peace

Tim Matson
Too Big for His Birches: Woodlot Economics

Susie Day
Attack of the Angry Fetus

Poets' Basement
Corseri, Gibbons, Jenkins and Ford

Website of the Weekend
Dylan & Baez: Deportees

September 19, 2008

Steven T. Banko
McCain's Passion Play

Mike Whitney
The Point of No Return

Michael Hudson
The Dow Jones' Wonderfully Cheesy Addition

William Kaufman
Shattering the Glass-Steagall Act: the Bi-Partisan Origins of the Financial Crisis

Brenda Norrell
The Fall of Lehman Bros.: Blowback for Black Mesa?

Keeanga-Yamatta Taylor
The New Rhetoric of Racism: Why Won't Obama Call It Out?

Clifton Ross
Bolivia: Cleaning Up the Bull Ring

Dave Lindorff
Hang On to Your Wallets: the Government's About to Rescue Us!

Cynthia McKinney
Seize the Time!

Susan Hurlich
Storm Survivors: a Dispatch from Cuba

Michael Donnelly
Let's Hand It All Over to the Democrats (They Helped Create This Mess)

Website of the Day
The Crisis Explained

September 18, 2008

Benjamin Dangl
The Machine Gun and the Meeting Table

Harvey Wasserman
The Senate's Drill, Drill, Drill Scam

Susan Abulhawa
The Lobby Has Spoken: Biden and Israel

Robert Weissman
After the Fall: the Financial Re-Regulatory Agenda

Anne-Marie McManus
McCain's Cinderella: the Fetishization of Sarah Palin

Corey D. B. Walker
The Poverty of 21st Century Progressivism

William S. Lind
Senator O'Bush: Why Obama is Wrong on Iran and Afghanistan

Ron Jacobs
Washington's False Logic of Torture

Dave Lindorff
American and China: Joined at the Hip

Binoy Kampmark
How Damien Hirst Got Away With It

Website of the Day
An Invisible Army

September 17, 2008

Stephen Conn
Palin and the Politics of Big Oil

Forrest Hylton
Reactionary Rampage in Bolivia

Patrick Cockburn
Petraeus Leaves Iraq

Gregory Elich
Inside North Korea

Ralph Nader
How the U.S. Auto Industry Wrecked Itself

Franklin Lamb
The Palestinians of Shabra-Shatila

Pam Martens
The Gang's All Here: Bush, McCain and the Old Iran/Contra Team

Dave Lindorff
The End of the Blue Chip Economy

Peter Morici
The Damage Deepens

Stanley Heller
The Killing of Count Folke Bernadotte

Douglas Valentine
Rambling David Foster Wallace

Website of the Day
Free Cindy McCain!

September 16, 2008

Paul Craig Roberts
US Economy: Rudderless and Reeling from Direct Hits

Tiphaine Dickson
Citizen Palin: Why Sarah Palin Quoted Westbrook Pegler

Stan Goff
America is Now Rome: an Open Letter to Christian Troops in Iraq and Afghanistan

Uri Avnery
Tzipi's Choice

Michael Winship
Lipstick on Polar Bears

Jeff Halper
Warehousing Palestinians

Patrick Irelan
Bolivia Versus the Empire

Oscar Gonzalez
Who's Dumber? Ike's Refugees or Wall Street's?

Binoy Kampmark
Cheney and His Records

Fatemeh Keshavarz
Muslims are at Peace with You

Sen. Russ Feingold
Restoring the Rule of Law

Website of the Day
The Next Great Rock Band?

September 15, 2008

Mike Whitney
The Tumbrils Roll at Dawn

Peter Morici
Toxic Lehman

Patrick Cockburn
Take Another Look at the Surge

Charles R. Larson
The Maverick Has No Clothes

Jonathan Cook
The Expulsion of Palestinians from Jaffa

Nikolas Kozloff
Racist Rhetoric in Bolivia

Roger Burbach
Morales Confronts the Insurrection: Bolivia and the Echoes of Allende

Helen Redmond
Where's the Health Care Bailout?

David Michael Green
The Democrats Do Poland

David Macaray
The Boeing Strike

Ralph Nader
Remembering Peter Camejo

Website of the Day
The Ballad of Sarah Palin

October 9, 2008

Why Are We Surprised?

From Enron to the Current Meltdown

By ROBERT BRYCE

The question that keeps coming to mind amidst the current financial meltdown is this: why is anyone surprised?

I take no pleasure in asking that question. Along with lots of other people, I’ve watched over the past few weeks as my modest stock holdings shrink into nearly meaningless positions.

But the question remains: given the myriad warnings that came via Enron – and the years-long neglect of any meaningful efforts to have serious policing of Wall Street – why are we surprised to find out that the financial engineers have robbed us blind? The warnings from the Enron meltdown could scarcely have been more clear. Indeed, two key lessons were obvious: financial regulators needed lots more funding, personnel and support; and derivatives markets that operate without proper regulatory oversight and reporting pave the way for financial engineers to privatize profits and socialize costs.

First, the lack of regulators. A key problem with today’s financial markets, as it was when Ken Lay and Jeff Skilling were piloting Enron into the dirt, is simple: we have too few cops patrolling Wall Street. That lack of oversight can most easily be understood by looking at the budget of America’s single most important financial regulator, the Securities and Exchange Commission. 

In 2001, the SEC’s budget was $437.9 million. In March 2002, the General Accounting Office issued a report which said that the shortage of money and manpower at the SEC had forced the agency to “be selective in its enforcement activities and have lengthened the time required to complete certain enforcement investigations.” So what has happened since then? Precious little. Yes, the agency has a substantially larger budget today than it did during the Enron era. For 2008, its spending authority is $906 million. And for 2009, the agency’s budget is projected to increase slightly, to $913 million.

But here’s the number that defies explanation: this year, the number of enforcement personnel, the people who go after the financial engineers, is expected to decline. You read that right. Despite the trillion dollar meltdown now underway, the number of SEC enforcement personnel will decline from 1,209 in fiscal year 2008 to to 1,177 in 2009. In all, the SEC expects to have 3,771 employees for 2009.

How does that compare to other federal agencies? Well, for comparison, the Smithsonian Institution budget for 2009 includes funding for 4,324 employees. That’s not a slap at the Smithsonian. It houses a myriad of the nation’s most treasured objects. But the SEC actually guards the nation’s treasure. And yet, Congress treats it like a bastard stepchild. Congress currently doles out more than five times as much money for corn subsidies ($4.9 billion in 2006, the most recent year for which data is available) as it does for the SEC.

It’s not just about funding. It’s also about rigorous accountability for the regulators themselves. Over the past few weeks, it’s become obvious that the SEC was largely co-opted by the companies it was supposed to be regulating. On September 25, the agency’s Inspector General, David Kotz, issued a report which that it is “undisputable” that the SEC “failed to carry out its mission in its oversight of Bear Stearns” – the investment bank the collapsed earlier this year and was taken over by JP Morgan. The report said that the agency missed “numerous potential red flags” prior to the company’s collapse and failed to require the investment bank to rein in its risk taking. (The full text of the report is available at: http://www.sec.gov/about/oig/audit/2008/446-a.pdf.)

But what’s more telling, according to the report, is the lax approach the SEC had in its handling of what was known as the Consolidated Supervised Entity program, a system set up to oversee the biggest Wall Street firms. There were six holding companies in the program: Bear Stearns, Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, Citigroup and JP Morgan. The report found that the SEC approved the inclusion of Bear Stearns in the program “prior to the completion of the inspection process.” Thus, the SEC agreed to regulate Bear Stearns before it even knew if the company was in compliance with the standards it was supposed to enforce.

Perhaps even more unsettling is a new report from Kotz, reported on this week by the New York Times and ABC News, which concludes that the top enforcement officials at the SEC quashed an investigation into possible insider trading at Pequot Capital Management, a big hedge fund. Kotz’s report sides with Gary J. Aguirre, a former SEC employee, who was fired in September 2005 after he tried to get testimony from John J. Mack, the current CEO of Morgan Stanley. Aguirre wanted to talk to Mack about the Pequot investigation. (In 2007, Mack’s compensation totaled $41.7 million even though Morgan Stanley’s earning fell by 57 percent.) Kotz’s report makes it clear that Aguirre was wrongly dismissed for being too vigilant in his investigation of Pequot and it says that the SEC gave “preferential treatment” to Mack during the investigation. It further recommends that the agency’s chief of enforcement, Linda Thomson, as well as two other top regulators at the agency, face “disciplinary and/or performance-based action” for their role in the tawdry affair.

This brings us to derivatives. Before it failed, Enron operated a huge – and almost completely unregulated -- derivatives exchange business. According to the Bank for International Settlements, the global derivatives market is now worth some $676.5 trillion. That’s $676,500,000,000,000. That’s a five-fold increase over the value of derivatives that were traded in 2003. Further, that $676.5 trillion is 51 times America’s current GDP.

In 2002, the world’s smartest investor (and my pick for president in 2008)  Omaha billionaire Warren Buffett, issued his annual letter to the shareholders of Berkshire Hathaway. In it, he called derivatives “financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.”

The most toxic element of the current market meltdown are credit derivatives, a financial instrument that was almost non-existent prior to 2000. And the growth of the credit derivatives business is due largely to one of John McCain’s pals, former Texas senator, Phil Gramm. In 2000, Gramm, who was then the chairman of the Senate Banking Committee, sponsored the Commodity Futures Modernization Act, a bill that was passed unanimously by the Senate on December 13, 2001. President Bill Clinton signed it into law eight days later. After it passed, Gramm hailed the measure, saying it “protects financial institutions from over-regulation.” He went on, saying it also “guarantees that the United States will maintain its global dominance of financial markets.”

Global dominance may be a worthy goal, but Gramm’s bill also contained a provision which Congressional aides referred to as the "Enron exemption.” This bit of legislative legerdemain made into law a regulatory exemption on derivatives contracts that was first rushed into place by the Commodity Futures Trading Commission in 1993 when that agency was chaired by Gramm’s wife, Wendy Gramm.

More than any other piece of legislation, the Commodity Futures Modernization Act paved the way for the financial engineers on Wall Street to buy and sell the infamous derivatives known as “credit default swaps” with virtually no oversight. According to one Washington, D.C.-based expert on derivatives who asked that his name and affiliation not be used, the bill that Gramm sponsored “led directly to the current meltdown. In 2000, the total value of the credit derivatives business was less than $1 trillion. By this year, the credit derivatives  business was worth more than $60 trillion.”

Of course, few people listened when Buffett warned of the dangers of derivatives back in 2000. Indeed some of America’s most important financial players dismissed him out of hand. In September 2002, Federal Reserve Chairman Alan Greenspan, Treasury Secretary Paul O’Neill, Securities and Exchange Commission chairman Harvey Pitt and James Newsome, chairman of the Commodity Futures Trading Commission, sent a letter to a pair of U.S. Senators in which they declared that financial derivatives were not a danger. Instead, they said that derivatives “have been a major contributor to our economy’s ability to respond to the stresses and challenges of the last two years.” Further, they declared that a then-pending Senate proposal to regulate derivatives could increase “the vulnerability of our economy to potential future stresses.”

Back in 2002, in Pipe Dreams, my book on the Enron disaster, I wrote that reforms were needed to deal with derivatives. I quoted one financial analyst who called derivatives “Wall Street’s dirty secret.” And I recommended that “Derivatives dealers should be required to post agreed-upon amounts of capital to collateralize their trading positions” and that “the derivatives marketplace must be made more uniform, with policing by regulators who can establish price limits, listing requirements and other trading parameters.”

I’m not repeating that to brag or claim any special foresight. Lots of others were arguing for the same types of reforms.

Enron gave Congress and the Bush administration all of the rationales that were needed to justify proper  regulation of the financial markets. Enron clearly showed the need for more cops – well paid cops who have the backing of their bosses – to patrol the corporate boardrooms and study corporate accounting practices. Enron’s bankruptcy also demonstrated the dangers of uncontrolled derivatives businesses. But those lessons were merrily ignored by Gramm, Greenspan and their cronies on Wall Street.

So I have to ask again: why are we surprised?

Robert Bryce is the author of Gusher of Lies: The Dangerous Delusions of "Energy Independence."

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