Insiders Investigating Insiders

Barry Ritholtz posts a complaint on his blog The Big Picture:

Ever notice the guys who crash planes into the sides of mountains don’t get to do the review of what went wrong?

Same thing with other giant calamities: The Captain of the Exxon Valdez didn’t do the crash review; The Challenger Shuttle engineers weren’t the ones who determined it was the O rings, etc. A separate team of experts comes in to objectively review the evidence.

So won’t someone explain to me why we give a rat’s ass what the big 3 ratings agencies think would be a better way to regulate themselves?

“Rating agencies have come under scrutiny over the past year after they gave overly generous ratings to debt — a move which some say exacerbated the financial crisis.

Agencies like Moody’s, Standard & Poor’s and Fitch Ratings have also been criticized for their business model in which issuers of securities pay the firms to rate them. Some believe this creates an inherent conflict of interest. On Wednesday, the heads of those firms and myriad other credit-rating experts gathered at the SEC to discuss what changes, if any, need to be made to improve oversight of the firms.”

Not critics of the horrific state of affairs — but the companies themselves.

Well, its entertaining to say the least.

He finds it entertaining. I find it reeks of corruption. But maybe Barry has been in this muck so long that he is desensitized, given up hope, and so finds it wildly amusing because it is so hopeless.

The criminals get to write the laws. The insane get to manage the insane asylum.