The American Spectator

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“The SEC could have told them to go out and raise capital,” says Lynn Turner, a former chief accountant at the SEC and a frequent critic of the agency. “If Bear Stearns had had enough capital there never would have been a run on the bank — because there would have been confidence in the system.”

br> The article did mention “daily” official SEC contact with Bear Stearns all the way back to last summer, but made it sound as if all the agency did was “privately urged Bear Stearns to raise cash.” Not mentioned was that those contacts and urgings were phenomenally successful: Bear’s reserves, its “liquidity pool,” grew from $8.4 billion on Jan. 31 (and from $5.5 billion the year before) to $21 billion in the first week of March. By all accounts, including that of Fed Chairman Ben Bernanke, Bear’s holdings were substantially above the required minimums for the safety of its customers. And, as Cox himself has noted repeatedly, customer cash remained safe throughout — and, for that matter, the collateral held by Bear for its investors was, to a particularly large degree, of “high-quality” types such as “agency securities.” Moving forward, Bernanke and other Fed officials in April 3 congressional testimony credited the SEC for its careful oversight after the Bear buyout, and Bernanke noted that the collateral offered is good, “investment grade.”

In his testimony, New York Federal Reserve Bank President Timothy Geithner included Cox in his short list of people specifically named as having provided “really exceptional leadership in a difficult time.” And one can search in vain for criticism of Cox even by liberal Senate Banking Committee Chairman Chris Dodd (D-CT), or by liberal committee member Chuck Schumer (D-NY). Indeed, reading between the lines of their comments at the April 3 hearing, one can see Dodd and Schumer no less than the Republicans showing respect for Cox’s performance throughout.

ALL OF WHICH leads…well, where? Why should we care?

We should care because conservatives too often search in vain for leaders of principle who know their roles, do their jobs well, maintain a calm control, and enhance teamwork rather than trying to feed their own egos or reputations.

In the case of the Bear Stearns buyout, conservatives will long question the various risks and rewards, the wisdom of recklessness, of the actions taken by the Federal Reserve and the Treasury. For now, the energy and industry of Fed and Treasury officials looks very good in short-term retrospect, as does the steadiness of the SEC. There is no question whatsoever that not only was a broader crisis averted in the short term, but that the SEC has moved strongly to do its part to stabilize the system for the long haul. This performance by Cox is the stuff of competent and quiet heroism. As he has been on many other occasions in public life, Cox was the right man at the right time for the job.

National Review’s Jay Nordlinger once called Cox “omnicompetent.” Such competence, combined with principled action, deserves not sniping but instead a promotion.