I see that former Clinton Secretary of Labor Robert Reich is on the anti-big bank bandwagon:
A larger explanation, I am afraid, is the grip Wall Street has over the American political process. The Street is where the money is and money buys campaign commercials on television. Wall Street firms and executives have been uniquely generous to both parties, emerging as one of the largest benefactors of the Democrats. Between November 2008 and November 2009, Wall Street doled out $42m to lawmakers, mostly to members of the House and Senate banking committees and House and Senate leaders. In the first three quarters of 2009, the industry spent $344m on lobbying – making the Street one of the major powerhouses in the nation’s capital.
Money is powerful. Talk is cheap. Mr Obama recently called the top bankers “fat cats”, and the bankers insisted they were shocked – shocked! – to learn how intransigent their lobbyists had been in opposing financial reform. The bankers even claimed a “disconnect” between their intentions and their lobbyists’ actions. This was all for the cameras, of course.
Why be so oblique? Let’s just consider a few of the bigger fish in the Obama Administration:
- Treasury Secretary Tim Geithner is a fairly young guy and the Obama Administration won’t last forever. He’s unlikely to return to plowing his field in 2012 or 2016 (heck, he might not even make it through 2010). In all likelihood he’ll get a job with one of those Wall Street banks that he was supposed to be regulating as head of the New York Fed and rake in a few of the millions of the billions that he’s helped the banks to, uh, earn.
- Chief of Staff Rahm Emanuel didn’t make a fortune by inventing a better widget. He is first and foremost a Democratic Party fundraiser who got big bucks, er, working for
Fannie MaeSalomon Brothers. He’s another prime candidate for a cushy job at a Wall Street bank. Based on his sterling experience at Fannie MaeSalomon Brothers, of course.
- Steve Rattner, President Obama’s Auto Czar, never toiled in the vineyards of industry. He’s a Democratic Party fundraiser who parleyed political connections into a position as a financier. He could remain in private equity or he’s poised nicely for a job with a Wall Street bank.
Need I go on? This isn’t unique to the Obama Administration. Henry Paulson, Treasury Secretary in the Bush Administration, was CEO of Goldman Sachs. Robert Rubin went from being Bill Clinton’s Treasury Secretary to the board of Citigroup. The list is long, broad, and deep. The number of people in the current administration or the past administration or the one before that who take jobs with the big banks, come from the big banks, or lobby for the big banks is so large a blog could be devoted to nothing but exploring the complex web of relationships among the political parties, government, the big banks, and lobbying firms.
How likely is anything effective to be done about this? Shhh. Don’t kill the goose that lays the golden eggs.