Update: Wanker Bankers Own Capitol Hill

Posted by AzBlueMeanie:

Bankers

Paul Blumenthal at Huffington Post details the financial services industry lobbying efforts in this post Paul Blumenthal: Do They Frankly Own the Place? You Betcha!:

"[Sen. Richard] Durbin remarked about the banking industry's relation with Congress by saying, "they frankly own the place." You would think that this might be an exaggeration, or just a rhetorical bit of anti-bank populism, but if you look at the numbers, Durbin isn't wrong. From 1997 to 2008, financial sector lobbying — represented by the finance, insurance and real estate industries — has amounted to fully 15% of all lobbying spending in Washington.

Since 1997, the financial sector has spent a combined total of $3.6 billion on lobbying the federal government. The total lobbying expenses have increased by 260% since 1997. Over that same time financial sector corporate profits have gone through the roof, with the financial sector reporting up to 40% of corporate profits in recent years.

Over these eleven years, the industry has gotten pretty much whatever it desires. This is just a sampling of the things obtained by the financial sector: the deregulation of financial derivatives and credit default swaps, the elimination of the line between investment banks and commercial banks, the increased hardship for those filing for bankruptcy, and the total free hand for Fannie Mae and Freddie Mac to muddle their books and evade responsibility. And all of this has been fueled by the 3,000 or so finance sector lobbyists meeting with, calling up, and emailing congressional offices and executive branch agencies.

Lobbying Expenses by the Financial Sector (1997-2008)
2008 $459,312,006
2007 $419,754,990
2006 $375,133,174
2005 $371,666,173
2004 $338,123,874
2003 $324,385,802
2002 $267,586,799
2001 $235,049,868
2000 $230,368,026
1999 $213,801,725
1998 $209,659,907
1997 $177,374,000

It is likely and that there have been tens of thousands, if not more, unreported contacts between financial sector lobbyists and government officials. These contacts have no doubt been aided by the high number of former officials who have taken the revolving door to lobby for the finance sector. According to a report by Essential Information and the Consumer Education Foundation, at least 142 former government officials lobbied on behalf of finance sector firms since 1998. These revolving door lobbyists include at least five former congressmen and dozens of top aides to congressmen, senators, and key congressional committees.

The Obama administration is taking a first step in requiring agency officials to report lobbying contacts as they relate to funds distributed from the American Recovery and Reinvestment Act. Seeing as how the financial sector has been running wild through Washington over the past 11 years — getting whatever it pleases and blocking whatever it doesn't — Congress, and the administration, should consider requiring the disclosure of these unseen lobbying contacts to help provide the public and officials with better information about the nature of the Washington lobbies, particularly the financial sector lobby.

Both Congress and the people would do better without a single lobby owning the place. Disclosing their lobbying contacts would be a first step in that direction."

All data obtained through the Center for Responsive Politics (CRP) site OpenSecrets.org.

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The American News Project is out with this video of the Mortgage Bankers Association – you know, the people responsible for the sub-prime and alt-loan mortgage "bubble" and financial meltdown when it burst – in a celebratory mood as Sen. Durbin's cramdown amendment went down to defeat:

Bankers toasting their success in killing a measure that would have helped troubled borrowers puts a new spin on the notion of moral hazard. In the meantime, bankruptcy judges can continue as usual to renegotiate the terms of mortgages on vacation homes and investment properties, owned mostly by the wealthy. h/t washingtonindependent.com

0 responses to “Update: Wanker Bankers Own Capitol Hill

  1. They only way to eliminate the problem of Fannie Mae and Freddie Mac (in my opinion) is elimination of those (and others) special government lending “businesses”.

    http://mises.org/story/2627

    One other disclosure bill that might help spread some additional sunshine would be Ron Paul and Bernie Sanders’ Federal Reserve audit legislation: HR 1207/S 604.

    http://www.ronpaul.com/2009-04-29/ron-pauls-bill-to-audit-the-federal-reserve-now-has-100-co-sponsors/

    So long as the FDIC and the US Treasury/Federal Reserve are expected to to guarantee the banks (not to mention NCUA and the credit unions) I foresee continued bank (and credit union) instability. So long as bank depositors of America continue to be offered no reason to shun a bank that engages in risky lending they will continue to patronize them.

    It would be nice if we could just say abolish credit default swaps, financial derivatives and “wanker” banks/bankers but the vast majority of the problems are caused by continued excessive involvement (guarantees/subsidies/mandates/bailouts) by government of private financial businesses. End government guarantees (and subsidies and mandates and bailouts) and the financial industry might just stop engaging in excessively risky behavior.

    http://mises.org/story/2963

    Of course the wanker bankers (and their counterparts incompetent wanker legislators) have proven to have a lock on the US government for many decades. I look forward to any legislation that will address the problem. I am not sure lobbyist disclosure is the solution but doing nothing is assured to allow the current system and its weaknesses to continue.

    Remember that lobbyists are a symptom of the problem, not its cause.