Saturday, January 02, 2010

The Cash Committee: How Wall Street Wins On The Hill

The Cash Committee: How Wall Street Wins On The Hill is a long but worthwhile article. Particularly the third page starts getting into why democracy is difficult.

"In the fall of 2008, Democrats took the White House and expanded their Congressional majorities as America struggled through a financial collapse wrought by years of deregulation. The public was furious. It seemed as if the banks and institutions that dragged the economy to the brink of disaster -- and were subsequently rescued by taxpayer funds -- would finally be forced to change their ways. But it's not happening. Financial regulation's long slog through Congress has left it riddled with loopholes, carved out at the request of the same industries that caused the mess in the first place. An outraged American public is proving no match for the mix of corporate money and influence that has been marshaled on behalf of the financial sector."

"In short, by setting up the committee as a place for shaky Democrats from red districts to pad their campaign coffers, leadership made a choice to prioritize fundraising over the passage of strong legislation. "It makes it difficult to corral consensus," says Rep. Stephen Lynch (D-Mass.), a subcommittee chairman, of the unwieldy panel."

And in this case it's not the Goldman's or the Bank of America's getting the influence, it's small auto-dealers or insurance agencies. Then again: "Then Waters chastised Kosmas for skipping out: "Even yesterday when we were engaged with consumer advocates, one member got up and left and went to a fundraiser with the banking community, in the middle of all that. Well, all I have to say is, I'm hopeful that our advocates will be stronger than ever and we will fight against this opposition.""

And it's not my congressman's fault: "As the House leadership set up committees for the 111th Congress in early 2009, Frank pushed to shrink the size of his own panel in order to better meet the historic challenges presented by the financial collapse and bailout, say several members of the committee including Reps. Watt, Miller and Lynch. Instead, it got bigger. "He was obviously outvoted," quips Lynch. "Either that or he missed the meeting." Frank doesn't conceal his distress at the size of his panel. "I had no part in setting up the committee. That was all the Speaker," Frank says when asked about the front-row frontliners. "

"Ultimately, though, Democrats are essentially relying on a "great man" strategy, figuring they can dump as many bank-friendly Democrats on the committee as they want and Frank will generally keep them in line. "We have a lot of faith in Barney. He can handle it," says a senior Democratic aide when asked about the phenomenon. Frank's senior staffers, say several current and former committee aides, similarly outmatch their counterparts. The chairman, they say, is able to use the knowledge gap at both the member and the staff level to his advantage."

1 comment:

Anonymous said...

First - Until campaigns are no longer financed by large contributions from powerful and moneyed interests, the powerful and moneyed interests will always get what they want from government.

Argue all you want about the fine points of campaign finance and congressional committess, nothing will change until big donations (say > $100) are taken out of politics.

Second - The bankers and other financial executives committed crimes (fraud) and until they are appropriately prosecuted and given sentences befitting of the largest financial crime in history, they and their decendents will simply continue the same, or similar, shady and illegal practices again, knowing that they do so, not only with impunity, but with the tacit approval and support (think bailouts without strings and the open window at the Federal Reserve) of the Federal Government.

Argue all you want about the fine points of securities law, but until hundreds of people go to jail for these crimes (think S&L crisis), nothing will change, and we will end up paying for their theft and arrogant speculations yet again.

Where is the change Obama promised?

Oh right I forgot, Wall Street was an early and big supporter of then Senator Barack Obama in his long shot bid for the Presidency. It appears he pays off his debts.