How the govt is unprepared for the next Lehman

Figures the Republicans in Congress are spending so much time  at the ongoing hearings this week trying to figure out if regulator Gary Gensler was playing footsie under the table with his old Goldman boss, Jon Corzine, late of MF Global. After all, they're used to pursuing dust mites when there's an 800-pound gorilla in the room. In this case the real gorilla is not Corzine himself--who's finished in public life and on Wall Street too--or Gensler, the head of the Commodity Futures Trading Commission who recused himself from MF Global monitoring. The gorilla is looming at us from across the Atlantic. It's the fact that even such a dedicated regulator such as the CFTC, which has found religion under the zealous Gensler, was not equipped to know that MF Global was catastrophically overloaded with European debt. And that's the problem: while the Republicans are gutting Dodd-Frank--which even if fully enforced would be weak--they're ignoring the woeful inadequacy of our half-written regulatory system to detect and take care of the next Lehman, the eurocrisis Lehman. At least that's what my colleague Stacy Kaper and I concluded in our piece, "What If Lehman Happened Today?"