Chutzpah
October 26th 2009 19:32
Bloomberg reported last week that Citigroup, Inc., which is 34% owned by the Federal government due to its acceptance of $45 billion in TARP funds, has forty-six lobbyists who are registered to work on legislation to regulate the financial industry. I don’t know what you think, but to me that’s like hiring the fox to guard the hen house.
The Citigroup lobbyists are part of a group of lobbyists representing the financial industry, business groups and companies that outnumber consumer groups, unions, and others pushing for tougher regulations by 25 to 1. What is particularly galling is that the TARP funds which bought us the 34% stake in Citigroup apparently did nothing for our ability to influence their decisions on how to run the company. Bob DeFillippo, a spokesman for Prudential Financial Corp., which is also providing 41 lobbyists to represent business and financial interests in the Senate, said, “We see our role as having the ability to be constructive, to provide information that helps draft the kind of regulatory reform that we agree is necessary.” (Bloomber, “Citigroup Taxpayer Ownership Doesn’t Prevent Lobbying,” Jonathan D. Salant and Lizzie O’leary, 10/23/09). We all know the “kind of regulatory reform that” he thinks is necessary; reform that will make it as easy as possible for the financial industry and business groups to cobble together some other form of derivative that can be sold to unsuspecting investors.
I have no gripes with Prudential Financial Corp.; they didn’t have to be bailed out from potential financial collapse with TARP funds. Citigroup did. If they weren’t pressured to accept the bailout, they would have failed, and who knows what would have happened next. David Axelrod, senior advisor to President Obama said, “You would hope after American taxpayers stepped in to save these companies from a disaster of their own making they would be deploying their army of lobbyists to strengthen and not thwart financial reform.” (Bloomber, “Citigroup Taxpayer Ownership Doesn’t Prevent Lobbying,” Jonathan D. Salant and Lizzie O’leary, 10/23/09). Apparently, there is nothing the Federal government can do with its 34% to change the behavior of Citigroup, or any other financial institution that still owes TARP funds; nobody thought of these things before we gave them the money.
Goldman Sachs, which just announced that it was going to give bonuses valued at $16.7 billion this year in an apparent nose thumb at the Federal government, has twenty-nine lobbyists in the Senate lobbying for its idea of financial regulation reform; Goldman Sachs, in a show of chutzpah, can thumb their collective noses at the Federal government because they gave back their $10 billion in TARP loans. They also know that a repeat of the financial crisis will bring another government bailout because the government regards them as too important in the scheme of the overall financial markets to fail. They can pay high priced lobbyists to argue for watered down regulations which will make it easy for them to make huge short term profits but which will do nothing to prevent the financial system from collapsing from their abuse in the future.
Business and the financial institutions believe in laissez-faire capitalism, that is, capitalism without any kind of government intervention. This just happens to be the belief of the Republican/Conservatives. The problem with this is most of the wealth and power is in the hands of business and financial institutions. The only check to this power that the individual has is a strong government because it has the power to tax and regulate, accumulating wealth and control on behalf of its constituents.
Apparently, we have been giving that power away with the TARP funds. Aren’t we generous.
The Citigroup lobbyists are part of a group of lobbyists representing the financial industry, business groups and companies that outnumber consumer groups, unions, and others pushing for tougher regulations by 25 to 1. What is particularly galling is that the TARP funds which bought us the 34% stake in Citigroup apparently did nothing for our ability to influence their decisions on how to run the company. Bob DeFillippo, a spokesman for Prudential Financial Corp., which is also providing 41 lobbyists to represent business and financial interests in the Senate, said, “We see our role as having the ability to be constructive, to provide information that helps draft the kind of regulatory reform that we agree is necessary.” (Bloomber, “Citigroup Taxpayer Ownership Doesn’t Prevent Lobbying,” Jonathan D. Salant and Lizzie O’leary, 10/23/09). We all know the “kind of regulatory reform that” he thinks is necessary; reform that will make it as easy as possible for the financial industry and business groups to cobble together some other form of derivative that can be sold to unsuspecting investors.
I have no gripes with Prudential Financial Corp.; they didn’t have to be bailed out from potential financial collapse with TARP funds. Citigroup did. If they weren’t pressured to accept the bailout, they would have failed, and who knows what would have happened next. David Axelrod, senior advisor to President Obama said, “You would hope after American taxpayers stepped in to save these companies from a disaster of their own making they would be deploying their army of lobbyists to strengthen and not thwart financial reform.” (Bloomber, “Citigroup Taxpayer Ownership Doesn’t Prevent Lobbying,” Jonathan D. Salant and Lizzie O’leary, 10/23/09). Apparently, there is nothing the Federal government can do with its 34% to change the behavior of Citigroup, or any other financial institution that still owes TARP funds; nobody thought of these things before we gave them the money.
Goldman Sachs, which just announced that it was going to give bonuses valued at $16.7 billion this year in an apparent nose thumb at the Federal government, has twenty-nine lobbyists in the Senate lobbying for its idea of financial regulation reform; Goldman Sachs, in a show of chutzpah, can thumb their collective noses at the Federal government because they gave back their $10 billion in TARP loans. They also know that a repeat of the financial crisis will bring another government bailout because the government regards them as too important in the scheme of the overall financial markets to fail. They can pay high priced lobbyists to argue for watered down regulations which will make it easy for them to make huge short term profits but which will do nothing to prevent the financial system from collapsing from their abuse in the future.
Business and the financial institutions believe in laissez-faire capitalism, that is, capitalism without any kind of government intervention. This just happens to be the belief of the Republican/Conservatives. The problem with this is most of the wealth and power is in the hands of business and financial institutions. The only check to this power that the individual has is a strong government because it has the power to tax and regulate, accumulating wealth and control on behalf of its constituents.
Apparently, we have been giving that power away with the TARP funds. Aren’t we generous.
| 32 |
| Vote |
Subscribe to this blog
