From Gary Weiss we learn that the Senate Judiciary committee has pushed back its hearings on short-selling for a week. Maybe they took our advice to study up on the subject a bit more before launching headlong into what could have been a nightmare of gullible lawmakers getting duped by fast-talking (and possibly campaign fund contributing) corporate executives. The list of witnesses hasn't been published yet but there have already been questions about exactly where the push to hold these hearings is coming from. As Weiss points out, the history of these kind of hearings is not a happy one.
Increasingly, corporate managers who can't run their companies competently have been shifting the blame to short-sellers, who bet on stocks declining. This is actually an old phenomenon, and certainly not the first time that Congress has obediently served as a PR conduit for such scapegoating.
In Wall Street Versus America, I describe how a House hearing on the same subject in 1989 left one congressman -- future SEC chairman Christopher Cox -- wondering something aloud. He asked if the committee hadn't been "snowed" by excuse-mongering CEOs. It had been. The whining CEOs who appeared before the committee came from three companies, two of which were later prosecuted for fraud.
A Pause That May Refresh [gary-weiss .com]