I think you can imagine how a major bank/investment firm like Goldman Sachs can gain access to power. They obviously can make or withhold campaign contributions. They can throw money into political action committees that go after politicians who want to mess with them. They also can offer politicians lucrative six or seven figure jobs should they ever fail to win reelection or want to retire from public service. They can use their pull to get their employees hired by the government. They can hire their regulators. There are many ways that rich Wall Street bankers can assure that Washington DC will let them do pretty much anything they want to do, even if it’s harmful to the country. But, sometimes, they don’t need to do anything.
Oversight Committee Chairman Rep. Darrell Issa (R-CA) raised hell last year to stop the federal government from investigating Goldman Sachs regarding allegations that the company defrauded investors. In April 2010, shortly after the Securities and Exchange Commission (SEC) announced a civil suit against Goldman Sachs, Issa sent a letter to SEC Chairwoman Mary Schapiro demanding to know if there was “any sort of prearrangement, coordination, direction from, or advance notice” between the SEC and the Obama administration or congressional Democrats over the timing of the lawsuit.
Issa’s investigation of the SEC’s investigation into Goldman Sachs stole the headlines and reinforced Goldman Sach’s claim that they had done nothing wrong. Explaining his defense of Goldman Sachs, Issa said he was representing the views of ordinary Americans who are worried about the “growth of government and the growth of government wanting to become more complex, with more agencies and more control over our lives.”
However, recent personal finance disclosures reviewed by ThinkProgress paint a different picture of Issa’s motivations. According to documents filed recently with the House Clerk, Issa went on a buying spree of high yield Goldman Sachs bonds at the same time he was running defense for the investment bank in Congress. From February to December of 2010, Issa bought 12 Goldman Sachs High Yield Fund Class A bonds, each worth up to $50,000 (view page 10 the disclosure here). Many of the bonds were purchased in the months after he filed his letter to the SEC. The $600,000 in new Goldman Sachs investments added to Issa’s already multimillion dollar stake in the company, valued from $5.1 to $15.5 million.
I’m not going to harp on Rep. Darrell Issa. He’s merely one of the more obvious examples of politicians who use their insider knowledge and power to enrich themselves. Any political system is going to have more than a handful of characters like Darrell Issa. It’s human nature.
This problem extends well into the Democratic Party as well (see, for example, Evan Bayh). The problem we have in this country is that, unlike in Greece, the people are not inclined to threaten to string Darrell Issa and his Goldman Sachs benefactors up by the balls. The lack of any credible counter-pressure allows our politicians to rip us off on a daily basis. In fact, people are getting ripped off in Greece despite their more active protestations. This is the way the world is structured.
Money talks, and the rest can usually be safely treated as bullshit. The Supreme Court has been on a rampage over the last two years in solidifying this situation by gutting all efforts to rein in the influence of corporate money on our governments.
At this point, progressivism is under assault and is being weakened steadily. It’s enough to discourage almost anyone. But there is a backlash growing. We have to nurture that backlash.
