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Congress finally passed a moderate reform package to tighten regulations on the banksters of Wall Street. Of course, the banksters howled, protesting even the meekest of reforms – but the package is now the law, so that’s that. Right?
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What Congress passed is a 2,300-page compendium of concepts, leaving the real decision-making about the details of financial regulation in the hands of the Federal Reserve, the SEC, the Commodity Futures Trading Commission, and other regulatory agencies. In other words, the game is still on for Wall Street lobbyists! So they’re presently mounting a furious blitz on the rule-writing regulators, still trying to weaken or even kill many of the reform ideas passed by Congress.
To weasel their way inside, the financial giants have reached into the agencies themselves to hire-away nearly 150 regulators, luring them with fat salaries to switch sides and become industry lobbyists. These insiders-turned-outsiders are well worth the big bucks, for they have long, personal relationships with those in the agencies who’re filling in the blanks left by Congress. If nothing else, these newly-minted lobbyists are much more likely to get their phone calls returned by their former regulatory colleagues than a stranger would.
A New York Times reporter asked one of the switcheroos who’s now working for the dark side if he felt this old-buddy connection gave him a lobbying edge. This regulator-turned-lobbyist bluntly said, “If it didn’t, I wouldn’t be able to justify getting out of bed in the morning and charging the outrageous fees that we charge our clients, which they willingly pay.” He added that “you have to work at an agency to understand the culture and pressure points, and it helps to know the senior staff.”
If the Wall Street banksters are able to pull off this regulatory heist, you’ll know that it was an inside job.
“Ex-Regulators Get Set to Lobby on New Financial Rules,” www.nytimes.com, July 27, 2010.