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“Which Interests Does He Have In Mind?”: Jeb Bush Says He’s Going To Tackle Special Interests In Washington. Don’t believe Him

Jeb Bush didn’t just release 33 years of his tax returns this week. He also had his campaign create a snappy online presentation, complete with graphs, to help everyone understand them. In the accompanying narrative there was one line that caught my eye. While he may have made millions after leaving the Florida governor’s mansion, Jeb wrote, he didn’t debase himself by doing any lobbying. “That was a line I drew and it was the right one. And it’s a line more people should be drawing in Washington, D.C., where lobbying has become our nation’s premier growth industry. And this culture of special interest access is a problem I plan to tackle as President.”

I don’t know about you, but I’m eager to hear more. How exactly will Bush tackle the culture of special interest access? Does he have some strict new rules in mind to lock the revolving door between government and business? Or will it be merely the power of his personal integrity that will keep those dastardly special interests from getting what they want?

Bush might surprise us, but if I had to guess I’d say this is something he’ll pay lip service to during the campaign, but then do little or nothing about if he actually becomes president. He’d be following a well-worn path if he does — candidates always say they’re going to change Washington’s culture and reduce the power of special interests, but somehow they never do.

That’s in large part because the institutions, norms, and relationships of Washington, D.C., are so firmly entrenched that one administration can’t do too much about them. And whatever kind of reform a president might have in mind, it’s always secondary to the policy goals any administration has, so it’s easy to put it to the side in favor of more pressing issues.

While some might like to shut the doors of the Capitol to lobbyists, that’s impossible — their work is protected by the First Amendment, which after mentioning freedom of religion, speech, the press, and assembly, says that we all have a right “to petition the Government for a redress of grievances.” And though there’s plenty of petitioning going on and plenty of grievances crying out for redress, there has actually been a slight decline in the number of registered lobbyists in recent years: While the number peaked at 14,829 in 2007, last year it fell to 11,800. The drop may be due to any number of reasons, but one lobbyist friend told me he was leaving the business because a divided government means there just aren’t enough bills being passed to lobby about.

Even when they make a sincere effort, presidents have trouble transforming Washington culture. When Barack Obama took office, he announced that no registered lobbyists would be allowed to serve in his administration. That probably helps explain the reduction in registered lobbyists, since many Democrats hoped to get a job with the administration one day, but few people believe the rule has seriously diminished the influence of special interests. After all, the administration found over and over that people it wanted to hire had lobbyist pasts, so it kept making exceptions.

On the flip side, there are public-spirited people who claim they have been shut out by the administration for being the kind of registered lobbyists we would presumably want more of. We’re talking about people who lobbied for causes like domestic violence prevention and environmental protection.

Which brings up the question: How special does an interest have to be before it’s problematically special? When we hear that term, it’s always said with disdain, assuming that somebody’s getting something they don’t deserve. In practice, though, we think of only the interests we don’t like as the ones who shouldn’t have influence.

You could look at it this way: You just need to pick the constellation of special interests you prefer, and vote accordingly. Would you rather that labor unions, environmental groups, and civil rights organizations had the ear of the government, or oil companies, anti-abortion groups, and the NRA? They’re all special interest groups to one degree or another, even if they all believe that what’s good for them is good for America. Chances are that if you dislike a politician for being beholden to special interests, what really turns you off is which interests she listens to.

Of course, that tells only part of the story. Some of the most effective special interest influence is exercised in ways that don’t make headlines, on behalf of interests most people know little about, and much of that isn’t partisan. For years before the financial crisis of 2008, the banking industry was acknowledged by many as the single most effective special interest lobby in Washington, in part because the congressional committees that had oversight of the industry were basically in the industry’s pocket — and that applied to both Republicans and Democrats.

The truth is that special interests are always going to get what they want to at least some degree, because that’s just the nature of special interests. When you have a particular interest in something — let’s say you’re a defense contractor who really wants the government to fund your new fighter plane — you’re going to marshal all kinds of resources to make it happen. The rest of us may have a diffuse interest in the plane not being built, if it’s a boondoggle. But we probably won’t organize to fight it, and our voices won’t be heard by those making the decision.

I’m not arguing for cynicism, or saying that every administration is equally steeped in the kind of legalized corruption that is endemic to Washington. But when a politician tells us he wants to get rid of the special interests, we ought to ask him which interests he has in mind, and exactly how he’s going to go about it. Because chances are it’s little more than posturing.

 

By: Paul Waldman, Senior Editor, The American Prospect; Contributor, The Week, July 2, 2015

July 5, 2015 Posted by | Jeb Bush, Lobbyists, Special Interest Groups | , , , , , , , | Leave a comment

“Hurt Feelings”: Banks Demand Pity Party Over Volcker Rule Losses

Whatever successes might have been attained within the hundreds of pages of regulations implementing the Volcker Rule, our nation’s bureaucrats must have known they couldn’t do anything that would force banks to unearth any long-buried losses in their financial reports. Because then many bankers would feel victimized. They would demand that regulators rush to soothe their hurt feelings. And America would never be the same until the banks could keep those losses unrecognized again.

Yes, I’m kidding. But the banking lobby isn’t. This week, a Utah-based lender, Zions Bancorp, said it would have to take a charge to earnings in the neighborhood of $387 million because the new rules will force it to sell a bunch of collateralized debt obligations. Those CDOs declined in value a long time ago. But the accounting rules said Zions didn’t have to include those losses in its earnings. Now that Zions has to sell them, it can’t keep the losses buried and must count them on its income statement.

A few hundred other lenders may be in similar situations, though probably none as extreme as the one at Zions. Now the banking industry’s numerous lobbying groups are complaining to regulators and asking for clarification of the rule — footnote 1,861, if you care to look it up — which means they don’t like it and want it changed. They also have enlisted several U.S. senators to intervene with regulators on their behalf.

It generally isn’t a good idea for the government to pick winners and losers or to tell companies what investments they can’t keep. Surely there is money to be made somewhere buying up assets that banks aren’t allowed to own anymore. It’s hard to tell if the regulators intended the consequences in this instance or not, as part of the rules’ prohibitions against banks sponsoring or owning stakes in hedge funds and private- equity funds.

That said, the point of the Volcker Rule was to keep banks from gambling with depositors’ money. So it shouldn’t come as a surprise that banks face new restrictions on the types of investments they can make. At some point, after three years of hand-wringing, the banking regulators have to stop revising what they’ve passed and declare it final, which they happen to have done already this month. Whining from bankers about their sudden inability to paper over losses on old CDOs isn’t a sufficient reason to reopen the process all over again.

 

By: Jonathan Weil, Bloomber View, Published in The National Memo, December 23, 2013

December 26, 2013 Posted by | Big Banks, Financial Institutions | , , , , | 1 Comment

Morgan Stanley Executive Calls For Higher Taxes On The Rich: ‘We Cannot Cut Our Way To Greatness’

Several wealthy bankers, investors, and entrepreneurs have called for higher taxes on the rich as an important part of reducing the nation’s deficit, led most prominently by Warren Buffett. “It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again,” wrote wealthy entrepreneur Nick Hanauer in an op-ed last week. “Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system.”

Joining the list of those in financial positions of power that are calling for higher taxes on the rich is Morgan Stanley Chief Financial Officer Ruth Porat who, as the Huffington Post’s Bonnie Kavoussi reported, said over the weekend that it’s “inappropriate” that income inequality in the country is continuing to grow while taxes on the rich stay low:

“The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that,” Porat said. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.” “We cannot cut our way to greatness,” she added.

The rising compensation of executives and those in the banking industry is one of the major factors driving the nation’s income inequality. And at the same time that the rich have been getting richer, their tax rates have been plummeting. It’s refreshing to hear someone in the banking industry acknowledge these truths and want to rectify them, rather than decrying higher taxes on the rich as akin to the Nazi invasion of Poland.

 

By: Pat Garofalo, Think Progress, December 5, 2011

December 6, 2011 Posted by | Wealthy | , , , , , , | Leave a comment

   

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