Uncovering the nation’s economic crisis

Heather Murren

Sunday, Jan. 31, 2010 | 2 a.m.

Most Americans have felt the profound impact of the financial crisis and are wondering, as I am, how exactly did the world’s greatest free-market system go so terribly wrong?

The free-market system has always been central to a healthy democracy, and our nation’s financial stability has always been the foundation of our internal and external strength. The collapse of almost every market begs answers to the most fundamental questions asked decades ago by a man named Ferdinand Pecora.

Most won’t know his name, but all will almost certainly have benefited from his work more than 70 years ago. Pecora led the investigation of the stock market crash of 1929. His tenacious brilliance is widely credited with uncovering irregular practices by Wall Street banks that led to the crash, providing the popular outrage that helped lawmakers usher in major reforms to the American financial system.

The question is: Are our financial institutions national assets or national dangers? Making that determination is the charge of the Financial Crisis Inquiry Commission.

The Financial Crisis Inquiry Commission is an independent group of 10 American citizens established to examine the causes, domestic and global, of the current financial and economic crisis. This body is independent: It works outside of Congress, and no one who holds an elected position may serve.

The members have a diverse array of political and economic views, and have distinct professional and personal backgrounds. But the commission is united in one common mission: identifying the real reasons behind the current economic collapse. And it is prepared to use everything, from the most incisive investigative techniques to its power to subpoena, to answer the questions that every American is asking.

We recognize the crucial nature of our work — we cannot let a crisis like this happen again.

Nevada has been ground zero for much of the fallout from the financial meltdown. We are fortunate, thanks to the seniority and importance of Senate Majority Leader Harry Reid, to have two commissioners from our state appointed as part of this important group.

The current condition of our great nation includes 10 percent unemployment, more than a million homes in foreclosure and more than 1.5 million personal bankruptcies filed last year.

Meanwhile, bankers are having the best compensation year ever.

But banker compensation is likely only part of the problem — at every level, individuals and institutions seemed to have failed to exercise the barest standards of personal and professional conduct. No down payment for a mortgage? No income verification? Not being responsible for the mortgages you facilitated because your company sold them to someone else? Not checking the quality of the mortgage you packaged into new investments because your own money wasn’t at risk? Regulators increasingly loosening their scrutiny of the industries they regulate?

Fortunately, Americans are willing to ask the tough questions. We are willing to admit mistakes, learn from them, and move on. But it requires accountability. We can reset the playing field, but first it requires acknowledgement that egregious mistakes of both judgment and of ethics were made.

This commission is committed to uncovering these mistakes and reviewing the economic and regulatory principles that govern our financial systems and how they might have failed. It is also committed to unearthing the individual behaviors that determine what is written in the history books.

Our task is to both research and investigate, and we are asking for the help and support of the American people. We welcome your questions, observations and ideas. Please contact us at FCIC.gov. We are your voice in Washington. We serve you.

The lessons learned from our complete, unbiased and thorough investigation will mean that future generations will have confidence in the strength and safety of our financial system. We are committed to a safer economic future, and ensuring that our financial system is never again seen as a danger to our well-being and always seen as a valuable asset to our nation and the world.

Heather Murren, co-founder and a member of the board of directors of the Nevada Cancer Institute, is a member of the Financial Crisis Inquiry Commission.