Congress for Sale

Barry Ritholtz is annoyed at Congress. It seems that a lot of Congress people took a lot of bribes donations from banks and (surely by coincidence) forced changes in the accounting rules to make the banks look more sound. An investor trade group claims that this is very misleading for investors.

But wait – if the accounting changes are bad for future investors, must they not be good for existing investors? And why would anyone invest in banks without understanding how the books are cooked kept? I don’t understand enough to have an opinion. UPDATE: Maybe I do – the change in question was the “mark to market” rule. Changing “mark to market” in a transparent way has always struck me as a good deal. The risk comes from changing it in a way that allows the banks to obscure what they’re doing. I don’t know how the recent changes work, but I fear the worst.

And is anyone surprised that money changes hands in Washington? Somehow I doubt that this is the most egregious example – FASB accounting rules are pretty visible – there are much more obscure and secretive opportunities for Congressional chicanery.

Nevertheless, the appearance of impropriety is worrisome. I hope that the top ten recipients (Democrats all) face a lot of heat and embarrasing questions in the 2010 elections. Gee, I can remember when Republicans were the party of big business.


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