The Big Bank Lobby: Too Big to Bear?

[depakid]

240 former legislators, bank committee staffers, and Treasury officials deployed to lobby. $600 million spent in lobbying, trade association activity and political contributions since March 2008. And that is just from the six biggest banks. The entire financial industry is spending an estimated $1.4 million a day, hiring 70 former members of Congress to make their case.

These figures, drawn from a http://www.ourfuture.org/bigbanktakeove">rnew report released by the Campaign for America's Future (which I co-direct), would be shocking if they weren't so sad and predictable. As the Senate moves towards passing financial reform legislation, it is worth focusing on how the lobby works.

Bailed out by taxpayers, the big banks -- Goldman Sachs, Bank of America, JPMorgan Chase, Citigroup, Morgan Stanley and Well Fargo -- are emerging from the financial crisis larger and more concentrated than ever. Their very size offends market competition. Entities that are too big to fail cannot be disciplined by the market.

Worse, as former IMF economist Simon Johnson has emphasized, their size and wealth also undermine democratic accountability. As the report shows, they exercise immense political power which they use not only to fend off reforms that might curb their excesses, but to sculpt laws and regulations that consolidate their privilege and profits. So despite popular anger at the banks, the Senate last week voted down the Kaufman-Brown amendment that would have put a lid on the size of banks, forcing the break-up of the big six.

The report, written by Kevin Connor of the Public Accountability Initiative and Lil Sis, highlights the corrupting revolving door that Washington insiders view as a sensible career path. The banks heavily rely on hiring retired legislators, former committee staffers and legislative aides. Although these are salad days for Democratic lobbyists, bipartisanship reigns. The banking lobby includes Dick Gephardt, former leader of the House Democrats, Trent Lott, former leader of the Senate Republicans, and former Republican House leader Dick Armey, and putative leader of one branch of the Tea Partiers. Connor names names of the major players of over 240 former government insiders now on the banks' payroll.

Needless to say, former legislators and staffers are masters of the back rooms. They gain easy access to sitting legislators. They help draft legislation. They know how to slip in key amendments and loopholes in dead of night. They know the players and the process.

More corrosively, the players -- the sitting legislators and current staffers -- know that after leaving Congress, they can comfortably make the family fortune by joining the lobbying profession. Not surprisingly, many seek to curry the favor of those who might later employ them. The revolving door doesn't just give special access to the bank lobby; it compromises sitting legislators and staffers looking out for their own futures.

More: http://www.huffingtonpost.com/robert-l-borosage/the-big-bank-lobby-too-bi_b_571973.html

[Scuba]

1. Whatever happened to anti-trust laws? Indict these guys.

[Demeter]

2. Ronald Reagan

He decided to destroy unions, and succeeded.

[cornermouse]

3. If they're too big to fail, they're too big to allow to continue to exist.

Break 'em up and shut 'em down.