Kabuki Democracy: Why a Progressive Presidency Is Impossible, for Now
The bankers' success had many sources, of course. There is much more to the money culture in Congress than ever appears on a contribution list; indeed, Washington operates on a culture of implied bribery no less than it does the real thing. According to Public Citizen, over seventy ex-members of Congress could be found lobbying for Wall Street and the financial services sector in 2009, including two former Senate majority leaders (Trent Lott and Bob Dole), two former House majority leaders (Richard Gephardt and Dick Armey) and a former House speaker (Dennis Hastert). At the staff level, the numbers are even more impressive. When Representative Barney Frank publicly rebuked his former aide, Peter S. Roberson, in April 2010 for switching sides to Goldman Sachs immediately after helping to draft the derivative regulations likely to affect his new employer, the chairman of the House Financial Services Committee treated the occurrence as a relatively rare one. In fact, as a lengthy Huffington Post investigation revealed last December, it happens almost every day. Two hundred forty-three people have worked on the House banking committee staff since 2000, and 126 of them have left the committee. Of these, 62 have registered as lobbyists, largely in the financial industry, while others lobby at law firms and such without being required to fill out forms. Given that the 243 figure includes clerical and technological staff, this means that almost everyone with any expertise on the committee has gone off to sell it to the people whose work they are professing to regulate. And this particular gravy train travels in both directions. Former clients of current committee staff members include H&R Block, the New York Stock Exchange, the Bond Market Association, Wachovia, MetLife and Experian. Not a one has any experience lobbying for consumer organizations such as the Consumer Federation of America, Public Citizen, US PIRG or, God forbid, Acorn.
This is just the way it is. No stigma is attached. No eyebrows are raised when a staffer "moves downtown." Rather, it is "a very logical progression," according to retired committee lawyer Howard Menell. The implied transaction can be seen in the carefully coded discussions that take place at the endless stream of receptions, seminars (really, sponsored vacations) and happy hours offered by these same trade organizations, whose representatives are always happy to lend their expertise to the often harried staffer. In fact, lobbyists need not apologize for the role they play in shaping public policy for private gain in Washington according to its current cultural mores. They are celebrated for it. If you doubt this, check out the daily "Playbook," published every morning by Mike Allen of Politico, the new Bible of political self-promotion in the form of a tipsheet of what's on for the day. Reports of social gatherings, hirings, birthdays and weddings of lobbyists occupy the same space with the same importance as those of senators and editors in chief. Rather than being perceived as pimps or prostitutes, corporate lobbyists are beloved members of the new political establishment where everybody does everybody else's jobs and no hard and fast lines can be found anywhere—save those between winning and losing. After all, government pay does not even begin to approach the levels earned on Wall Street or inside the nation's top law firms. Salaries being what they are, aside from proximity to power, the key perk in Washington is the ability to live beyond one's means. Journalists, with few exceptions, have lost what were once their generous expense accounts and can no longer pick up three- and four-figure dinner checks as a matter of course. Staffers never could. The only people left with cash to make life worth living, luxury-wise, are the lobbyists, and none are richer than bank lobbyists, whose earnings and bonuses are literally twice the average elsewhere in the private economy, much less in the public sector. The Center for Public Integrity's reports reveal that in Obama's Washington, there are actually fewer lobbyists than before, but they spend more money; if nothing else, Obama has succeeded in raising the price of buying what you want in Congress.
Lobbyists for the banking industry benefit immensely from the favors they can offer and jobs they may dangle, but also from their success in creating and propagating an entire ideological framework that does their work for them among members of Congress and the media without anyone being offered anything. In a phenomenon that mimics the observations of the long-jailed Italian communist philosopher Antonio Gramsci, the economists Simon Johnson and James Kwak note that during the 1990s, when both parties benefited from massive investments in Congressional war chests by investment bankers and their allies, "the ideology of Wall Street—that unfettered innovation and unregulated financial markets were good for America and the world—became the consensus position in Washington on both sides of the political aisle." As a result, lobbyists' talking points became "self-evident." The ideology had three components: there was the "idea that financial innovation, like technological innovation, was necessarily good." Second was the idea that complex financial transactions served the noble purpose of helping ordinary Americans buy houses. Third was that Wall Street was the most exciting place to be at the turn of the new millennium. Johnson and Kwak note that Alan Greenspan—now repentant, but for a long time perhaps the most admired man in all Washington—as well as being a longtime acolyte of Ayn Rand, was the pied piper of the ideology of finance. Speaking to the annual conference of something called the Association of Private Enterprise Education, the oracle decreed:
With technological change clearly accelerating, existing regulatory structures are being bypassed, freeing market forces to enhance wealth creation and economic growth…. As we move into a new century, the market-stabilizing private regulatory forces should gradually displace many cumbersome, increasingly ineffective government structures. This is a likely outcome since governments, by their nature, cannot adjust sufficiently quickly to a changing environment, which too often veers in unforeseen directions. The current adult generations are having difficulty adjusting to the acceleration of the uncertainties of today's silicon driven environment. Fortunately, our children appear to thrive on it. The future accordingly looks bright.
Together with the money and the revolving jobs door, and the cultural capital it enjoyed as the home of what Tom Wolfe called "Masters of the Universe," Johnson and Kwak note, "these powerful forces [give] Wall Street a degree of political influence that no amount of payoffs to corrupt politicians could have bought." Don Lucchese, Michael Corleone's rival for control of the vast riches of the mafia's worldwide finances, summed this philosophy up pretty well in "The Godfather, Part III:" "Finance is a gun," he explained, to Vincent, Michael's nephew. "Politics is knowing when to pull the trigger." Challenged (before being murdered) about the problem of popular opposition facing the politicians he controls, Luchese is impressively unmoved by the prospect of democratic opposition. "He who builds on the people, builds on mud." Could anyone at Goldman or AIG have put it better?