I try to be cynical, but I can’t keep up. Not only is Congress punting rulemaking to captured and compromised regulators, Wall Street lobbyists are now actually drafting the bills. “Wall Street writes its own laws” used to be a useful polemic, now it’s a statement of fact.
Bank lobbyists are not leaving it to lawmakers to draft legislation that softens financial regulations. Instead, the lobbyists are helping to write it themselves.
One bill that sailed through the House Financial Services Committee this month — over the objections of the Treasury Department — was essentially Citigroup’s, according to e-mails reviewed by The New York Times. The bill would exempt broad swathes of trades from new regulation.
Citigroup wrote its own law? What do lawmakers get for doing Wall Street’s bidding?
In a sign of Wall Street’s resurgent influence in Washington, Citigroup’s recommendations were reflected in more than 70 lines of the House committee’s 85-line bill. Two crucial paragraphs, prepared by Citigroup in conjunction with other Wall Street banks, were copied nearly word for word. (Lawmakers changed two words to make them plural.)..
And as its lobbying campaign steps up, the financial industry has doubled its already considerable giving to political causes. The lawmakers who this month supported the bills championed by Wall Street received twice as much in contributions from financial institutions compared with those who opposed them, according to an analysis of campaign finance records performed by MapLight, a nonprofit group.
Remember when President Obama wanted to break up Citigroup and Turbo-Tax Geithner “slow walked” him out of it? Maybe Geithner was just thinking ahead – someone had to write these laws. Congress is too busy raising money from Wall Street to spend time writing the bills to regulate Wall Street. It’s called pragmatism, folks.
And as the bribes campaign contributions double for those who let Wall Street write the bills, you know those other representatives are licking their lips wishing that could get a taste. Of course, they will want to wait for everything to calm first and ensure that the rules are so esoteric they can claim ignorance and the public will be none the wiser. This is the real price of not breaking up the Too Big To Fail and Jail Banks – leaving them in place means eventually their money will buy back all their political influence they lost from causing the 2008 crash.
We are right where we were in 2007 with the best financial regulation money can buy.