This blog is called Decline Of The Empire, so I suppose I should write about the Empire's decline once in a while. Our ongoing decline is a fait accompli, a done deal, so there's no point in making that argument anymore. I would remind you that when I speak of America's decline, I am talking about the fact that the interests of America's elites & political leaders have almost completely diverged from the interests of most of America's citizens.
Nonetheless, it is still interesting to talk about how that decline plays out. It is of great psychological interest to me. I'll explain what I mean at the end.
The object of interest today is a post which appeared on the New York Times Dealbook blog called Banks’ Lobbyists Help in Drafting Financial Bills. This article illustrates why it would be difficult to overstate just how blatant corruption in America's governance has become. The post is about dismantling the Dodd-Frank financial "reform" bill which became "law" during Obama's first term. I don't have to comment much on the various atrocities exposed—they speak for themselves.
WASHINGTON — 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 [the Swaps Regulatory Improvement Act] 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.
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.)
That is crystal clear—Citigroup's lobbyists are writing the legislation which is reversing regulation of Citigroup, or exempting it from regulation.
The cordial relations [between the banks and the Congress] now include a growing number of Democrats in both the House and the Senate, whose support the banks need if they want to roll back parts of the 2010 financial overhaul, known as Dodd-Frank.
This legislative push is a second front, with Wall Street’s other battle being waged against regulators who are drafting detailed rules allowing them to enforce the law.
That's the important theme in this exposé—the Democrats, not the Republicans, are caving on Wall Street's second front. Always follow the money.
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.
In recent weeks, Wall Street groups also held fund-raisers for lawmakers who co-sponsored the bills. At one dinner Wednesday night, corporate executives and lobbyists paid up to $2,500 to dine in a private room of a Greek restaurant just blocks from the Capitol with Representative Sean Patrick Maloney, Democrat of New York, a co-sponsor of the bill championed by Citigroup.
Industry officials acknowledged that they played a role in drafting the legislation, but argued that the practice was common in Washington. Some of the changes, they say, have gained wide support, including from Ben S. Bernanke, the Federal Reserve chairman. . The changes, they added, were in an effort to reach a compromise over the bills, not to undermine Dodd-Frank...
Bank lobbyists, in their own defense, argued that the practice was common in Washington! I am speechless.
... Lawmakers who supported the industry-backed bills said they did so because the effort was in the public interest. Yet some agreed that the relationship with corporate groups was at times uncomfortable.
Did you catch that? Lawmakers who supported the bills which Citigroup lobbyists wrote claimed they did so because these efforts were in the public interest. I am speechless again.
How does one rationalize that?
“I won’t dispute for one second the problems of a system that demands immense amount of fund-raisers by its legislators,” said Representative Jim Himes, a third-term Democrat of Connecticut, who supported the recent industry-backed bills and leads the party’s fund-raising effort in the House.
A member of the Financial Services Committee and a former banker at Goldman Sachs, he is one of the top recipients of Wall Street donations.
“It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption. It’s unfortunately the world we live in.”
It's appalling! It's disgusting! It opens the possibility of conflicts of interest and corruption! I don't have the words; there are no words to describe this level of craziness.
Anyway, the Dealbook article goes on and on. I recommend you read it if you want more. It ends on this happy note.
Six days after the vote, several freshmen Democrats were in New York to meet with bank executives, a tour organized by Representative Joe Crowley, who helps lead the House Democrats’ fund-raising committee. The trip was planned before the votes, and was not a fund-raiser, but it gave the lawmakers a chance to meet with Wall Street’s elite.
In addition to a tour of Goldman’s Lower Manhattan headquarters, and a meeting with Lloyd C. Blankfein, the bank’s chief executive, the lawmakers went to JPMorgan's Park Avenue office. There, they chatted with Jaime Dimon, the bank’s chief, about Dodd-Frank and immigration reform.
The bank chief [Dimon] also delivered something of a pep talk.
“America has the widest, deepest and most transparent capital markets in the world,” he said. “Washington has been dealt a good hand.”
OK, that's more than enough.
How crazy is this? I said that America's decline was psychologically interesting. What does that mean?
Those with a crude view of human behavior and motivation assume there are multiple conspiracies between bankers and legislators to promote financial interests. That's not how humans work. That's not how the minds of Joe Crawley (D, NY) or Jim Himes (D, Ct) work.
Simply put, these representatives of "the people" believe their own bullshit. The bank lobbyists believe their own bullshit. Jaime Dimon believes his own bullshit. And so on.
One could say that self-interest drives all of these people, and thus they are inclined to believe their own bullshit. That's true, but this observation does not go nearly far enough. Everybody in our mainstream media talking about how wonderful America's democracy is also believe their own bullshit.
The corruption is pervasive and ubiquitous, but no one is able to acknowledge the corruption.
In a recent post called Is American Democracy In Trouble?, I attributed much of this craziness to Mark Twain's corn-pone opinions—"You tell me whar a man gits his corn pone, en I'll tell you what his 'pinions is."
But I'm here to tell you that corn-pone opinions (pure self-interest) only explain part of what's going on here. How can we explain the kind of compartmentalization in the human mind which allows Representative Jim Himes, formerly of Goldman Sachs and one of the top recipients of Wall Street donations, to say
It’s appalling, it’s disgusting, it’s wasteful and it opens the possibility of conflicts of interest and corruption.
and then explain it away by saying
It’s unfortunately the world we live in.
but not find himself appalling, disgusting and benefiting from numerous conflicts of interest?
And this is not the world we happen to live in. It is world humans like these politicians made. In this important sense, the world is indeed what we make of it.
The human mind is the outcome of a long evolutionary process, but, from my point of view, we are talking about damaged goods here. In the dissociateive statement of Jim Hines, I believe we have touched on the core of the difficulty with humans.
This typical human behavior/speech strikes me as bat-shit crazy. Totally deranged. Yet, it is typical human behavior we see in this corruption story. It is very difficult to talk about this. There are no words to properly describe it, no theories of the human mind which fully explain it, at least which I'm aware of.
That's why watching America's decline is psychologically interesting to me.
But I've got to stop now. Even talking about this kind of total derangement is making me crazy.
It seems the only person making an effort to stop this crap is Elizabeth Warren, and she seems to be a Don Quixote tilting at windmills.
Posted by: John D | 05/30/2013 at 11:38 AM