Chris Cox

Scenes From The Ninth Circle Of Financial Bureaucracy

Moe Tkacik | May 6, 2009, 6:56PM

We've been poring over the report -- hit piece? -- on the SEC issued today by the Government Accountability Office, and we're starting to understand why Hank Paulson wanted to shut the place down and put all those "enforcers" out of their Kafkaesque misery. The agency got more tips from FINRA -- the financial industry's self-regulator -- than it had the resources to pursue, it lost 11.5% of its lawyers since 2004, and the staff lacked in-house expertise on pretty much all the fancy financial instruments without which we would not have this crisis (in addition to "government securities" which seems a bit sad, the SEC being a division of the government). The agency's revenues were in a downward spiral, with corporate penalties falling 39% in fiscal year 2006, only to fall another 48% in 2007, only to fall another 49% last year.

But as the Columbo-eseque foil for a cabal of deep-pocketed financiers with $87,000 rugs in an absurdist Office Space comedy about how the crisis happened, the SEC as depicted in the GAO report is ideal. We excerpted some of our favorite bits:

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