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Pecora Part II?
Peroca on TIME magazine, 1933
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April 24, 2009

"Pecora was a smart lawyer and he knew that the game plan that he had to follow was to, quite frankly, whip up some popular outrage. If he could get people angry enough, if he could get the clamor for reform strong enough — once that anger was in place, once that clamor for reform was in place — Congress essentially fell in line."
-Michael Perino

Pecora — it's a name that's all over the media these days; THE NEW YORK TIMES: "Where Is Our Ferdinand Pecora?" Condé Nast PORTFOLIO: "Congress Should Keep its Cotton-Pickin' Hands Off the 'Pecora' Commission," "The Ghost of Ferdinand Pecora." Calls for modern-day Pecora hearings have increased since Speaker of the House Nancy Pelosi called for congressional investigation into the financial meltdown. But many average citizens might not know the name and accomplishments of Ferdinand Pecora.

The hearings that bear Pecora's name was set up under a Republican-dominated Senate Committee on Banking and Currency in 1932 to investigate the causes of the Great Depression. After nearly a year of minimal results, the committee hired Sicilian immigrant Ferdinand Pecora, an assistant district attorney for New York County, and the commission continued its work under the new president FDR. Pecora's tough questioning now backed by subpoena power, of bankers and titans of finance, including J.P. Morgan. Jr. made headlines. It earned him a place on the cover of TIME magazine in 1933 with an accompanying article headlined "Wealth on Trial".

Among the highlights of Pecroa's questioning was the admission by Morgan that he had not, in fact, paid personal income tax in 1930, 1931, and 1932. But the results of the hearings were more than headline-making political theater. The outrage and demand for reform of Wall Street and the banking industry that came from the Pecora hearings led to the founding of the Securities and Exchange Commission — the body tasked with regulating the markets and protecting investors ever since. In addition, within a year Congress passed The Glass-Steagall Act, which among other things, separated commercial and investment banking. Many of those trying to deconstruct this financial debacle point directly to the undercutting of Glass-Steagall Act over recent decades as a leading cause.

Of course it remains an open question as to whether "new" Pecora hearings will yield a complete answer for 'what went wrong' this time. Pecora closed his autobiography with the phrase: "Laws aren't a panacea and they're not self-executing." Michael Perino reflects: "What I take from that is [...] Yes, we need to have the right set of laws. But we can't expect much without keeping an eye out and making sure that those laws are enforced. And even then we have to recognize that the best enforcement and the best laws are not going to prevent all of these things from happening again."

Use the resources below to investigate the Pecora hearings for yourself and read the debate over forming a 'Percora II.'

Published February 24, 2009.

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References and Reading:
Read the Pecora Hearings Transcripts
The Library of Congress presents a searchable set of transcripts online.

FRONTLINE: The Long Demise of Glass-Steagall

History of the Securities and Exchange Commission

"Pelosi Wall Street Probe Follows Pecora After Crash," Mark Pittman and Laura Litvan,

"Support Grows for Inquiry Into Wall St. Woes," Kate Phillips, THE NEW YORK TIMES, April 22, 2009.

"Where Is Our Ferdinand Pecora?" Op-Ed, THE NEW YORK TIMES, Ron Chenow, January 5, 2009.

"The Ghost of Pecora," Steve Christ, Baltimore Personal Finance Examiner,, April 22, 2009.

"Congress Should Keep its Cotton-Pickin' Hands Off the 'Pecora' Commission," Gary Weiss, Condé Nast PORTFOLIO

Published February 24, 2009.

Also This Week:

Bill Moyers talks about the economy and Wall Street's future with Simon Johnson, former chief economist of the International Monetary Fund (IMF) and a professor at MIT Sloan School of Management, and Michael Perino, professor of law at St. John's University and an advisor to the Securities and Exchange Commission.

Investigating Wall Street? The demand is growing for new Pecora hearings, the 1930s investigation into the causes of the Great Depression. But just who WAS Ferdinand Percora, and what changes did the investigation bring about?

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