The problem of human lobbying
I put this in the lead to Wonkbook today, but I want to make a few further points:
The report cites 243 government insiders turned lobbyists working for the industry. Of those, 202 used to work in Congress, and the rest served in the White House, Treasury Department or government agencies. The list includes 33 former chiefs of staff, 54 former staffers to the House Financial Services Committee or Senate Banking Committee and 28 former legislative directors.
The report also estimates that six banks – Goldman Sachs, Bank of America, JPMorgan Chase, Citigroup, Morgan Stanley and Wells Fargo – and their trade organizations have spent about $600 million since the first major federal bailout of Bear Sterns in March 2008. Between 2008 and 2009, the six big banks spent about $69 million on campaign contributions and lobbying, according to the report.
The American Bankers Association, the Securities Industry and Financial Markets Association, the Financial Services Roundtable, the Financial Services Forum, the Futures Industry Association, the International Swaps and Derivatives Association and the Consumers Bankers Association spent $263 million on lobbying, policy work, salaries and conferences in 2008. The report assumes the same spending in 2009.
I've often thought that lobbying is, in part, a con, and this just confirms the impression. These shops are extracting a tremendous amount of money from the major banks. And for what? I'm skeptical that outcomes would be different if the six megabanks had spent $400 million rather than $600 million since the bailout.
Of course, the lobbying shops are simply positioning themselves at the center of one of Washington’s most frustrating realities: Washington controls a lot more money than it uses. These expenditures mean nothing to the banks making them. But this is a torrent of cash by Washington standards. Very few investments offer the possibility of multi-thousand fold returns. Washington is one of them.
Finally, I worry much more about the people than the money. Let the banks spend money. But when you've got 54 former staffers from the relevant committees and 33 former chiefs of staff and more than 200 former congressmen, you're talking about something much more effective than spending: You're talking about social relationships. People return e-mails and take calls and listen closely to the people they know. This is, essentially, what journalism is about: Leveraging social relationships to get people to tell you things they probably shouldn't be telling you, and that they certainly wouldn't tell someone they didn't know and have human feelings for.
If the banks spent $600 million but had to hire people who'd never met a congressional staffer in their life, I wouldn't worry about them for two seconds. The fact that they can hire pretty much everyone who ever worked for a previous Congress makes this a much more serious problem.
Posted by: WoodbridgeVa1 | May 11, 2010 12:49 PM | Report abuse
Posted by: srw3 | May 11, 2010 1:02 PM | Report abuse
Posted by: JPRS | May 11, 2010 1:22 PM | Report abuse
Posted by: Jaycal | May 11, 2010 1:43 PM | Report abuse
Posted by: srw3 | May 11, 2010 2:12 PM | Report abuse
Posted by: Holla26 | May 11, 2010 3:56 PM | Report abuse
Posted by: Levijohn | May 11, 2010 5:14 PM | Report abuse
Posted by: srw3 | May 11, 2010 5:58 PM | Report abuse
Posted by: TomPhilpott | May 11, 2010 9:36 PM | Report abuse
Posted by: Holla26 | May 12, 2010 9:26 AM | Report abuse
Posted by: archamprog | May 12, 2010 1:47 PM | Report abuse
The comments to this entry are closed.