New York Times: A Champion of Wall Street Reaps Benefits

The New York Times is posting an interesting series of articles in "The Reckoning" series - exploring the causes of the financial crisis; some of which are quite eye opening. The Phil Gramm ("it's just a mental recession") story is a fun one. One area I harp on a lot, directly and indirectly, is how skewed the system in the U.S. has gotten for the very few, and how money buys so much political favor in the country. I don't know if people are ignorant to it, or too busy surviving day to day life to care - but the implicit laws of fairness in the country which in theory is something that makes us stand apart seem to be have been "bought and paid for". Only when national emergencies arise to we try to fix a few things, until the American public loses interest and then we slowly go back to how things were. The whole lobbyist system in itself is simply a complete disaster. An entire website could be devoted to these piranhas. Frankly, it is all quite dispiriting because while the faces, names, and organizations change - I read the same stories year after year.

Below are some blurbs from the New York Times series in relation to Chuck Schumer, who many consider one of the "good guys" or "moderates". And frankly he is doing what every state representative does (from either party) - protect the turf of his constituents - but since his donor list includes the high and mighty firms of NYC a lot of the "protections" he builds into bills for his contributor list, cost the rest of us. This is just one example, but a proxy for how Cramerica works - for the corporation, by the corporation. The dogma of lack of regulation and let free markets reign (self regulation doesn't stifle innovation!) jammed down our throat for years on end, until it blows up - and then we have to come to the resuce with our personal resources to save the system; the same system which was built agains the "common guy" in the first place. If it wasn't so tragic it would be laughable. I'm just amazed in 3rd world countries people take to the streets and protest "injustices" - here we just say it's the system. And take it.

• As the financial crisis jolted the nation in September, Senator Charles E. Schumer was consumed. He traded telephone calls with bankers, then became one of the first officials to promote a Wall Street bailout. He spent hours in closed-door briefings and a weekend helping Congressional leaders nail down details of the $700 billion rescue package.
• The next day, Mr. Schumer appeared at a breakfast fund-raiser in Midtown Manhattan for Senate Democrats. Addressing Henry R. Kravis, the buyout billionaire, and about 20 other finance industry executives, he warned that a bailout would be a hard sell on Capitol Hill. Then he offered some reassurance: The businessmen could count on the Democrats to help steer the nation through the financial turmoil. The message clearly resonated. The next week, executives at firms represented at the breakfast sent in more than $135,000 in campaign donations.
• Mr. Schumer became a magnet for campaign donations from wealthy industry executives, including Jamie Dimon, now the chief executive of JPMorgan Chase; John J. Mack, the chief executive at Morgan Stanley; and Charles O. Prince III, the former chief executive of Citigroup. And he was not at all reluctant to ask them for more.
• But in building support, he has embraced the industry’s free-market, deregulatory agenda more than almost any other Democrat in Congress, even backing some measures now blamed for contributing to the financial crisis.
• Mr. Schumer, a member of the Banking and Finance Committees, repeatedly took other steps to protect industry players from government oversight and tougher rules, a review of his record shows. Over the years, he has also helped save financial institutions billions of dollars in higher taxes or fees.
• He succeeded in limiting efforts to regulate credit-rating agencies, for example, sponsored legislation that cut fees paid by Wall Street firms to finance government oversight, pushed to allow banks to have lower capital reserves and called for the revision of regulations to make corporations’ balance sheets more transparent. (and this is a Democrat - it's called beholden to those who fund your political campaigns)
• At the same time, Mr. Schumer has cast himself as a populist who looks out for the middle class.
• In an interview, Mr. Schumer said that until the recent market turmoil, he did not fully appreciate how much risk Wall Street had assumed and how much damage its practices could inflict on ordinary Americans. “It is a learning process, no question about it, an evolution,” he said, adding that he now believed that investors and homeowners must be better protected. (something about horses and barn doors would be appropriate here)
• “He is serving the parochial interest of a very small group of financial people, bankers, investment bankers, fund managers, private equity firms, rather than serving the general public,” said John C. Bogle, the founder and former chairman of the Vanguard Group, the giant mutual fund house. “It has hurt the American investor first and the average American taxpayer.”

Bogle nails it - the 2nd half of the story gives many individual stories of bills he fought or watered down to the point of making them useless in terms of regulation. But in our two faced culture of politics (watch what they do, not what they say) after all the things he was parner in (Phil Gramm was his best buddy in many of these initiatives) he has the audacity to come to the floor and say

• “After eight years of deregulatory zeal by the Bush administration, an attitude of ‘the market can do no wrong’ has led it down a short path to economic recession,” Mr. Schumer said on the Senate floor in September.

Laughable.

• He has not assigned responsibility to himself or fellow Democrats, saying he had no way of knowing of the misdeeds going on on Wall Street.
  

And how would we know when our politicians are fighting to make regulation as lax as possible? Duh.

• In recent weeks, Mr. Schumer has listened to Wall Street leaders for advice on what should come next. At a dinner at Morgan Stanley’s headquarters the night before the presidential election, John Mack, the chief executive, and a dozen top hedge fund officials talked with Mr. Schumer about possible changes affecting their industry. “He is mindful that this is a very big part of his constituency — Wall Street.”

*note - before the emails rain in, I am independent and believe both parties have hijacked our system for self benefit. I'm not picking sides. Frankly there is very little different between either side anymore and they enjoy their monopoly. It's a broken system, perio - and as long as they keep the sheep from each side busy fighting each over over minutia - they win. I don't attack one side or the other - they both, plainly, let the average American down in a huge way year after year. The story is simply a showcase of the symptom - it applies to farming bills, energy bills, transport bills, healthcare bills, everything. And to show when we get on our high horse about how everything is superior (USA! USA! USA!) - that it's really no different than crony filled "3rd world" countries - it's just placed in a much nicer package.