"Regulators keep falling down on the job, and keep getting rewarded for it by Wall Street" - Taibbi

[tpsbmam]

Revolving Door: From Top Futures Regulator to Top Futures Lobbyist

Taibblog

While America focused on New Hampshire, a classic example of revolving-door politics took place in Washington, going almost completely unnoticed. It’s a move that ranks up there with the hire of Louisiana congressman Billy Tauzin to head the pharmaceutical lobbying conglomerate PhRMA -- at a salary of over $2 million a year -- immediately after Tauzin helped ram through the Medicare Prescription Drug Bill, a huge handout to the pharmaceutical industry.

In this case, the hire involves Walter Lukken, who toward the end of the Bush years was the acting head of the Commodity Futures Trading Commission. As the chief regulator of the commodities markets, it was Lukken’s job to spot and combat speculative abuses and manipulations that might have led to artificial price hikes and other disruptions.

<snip>

By insisting that the spike was “not a result of manipulative forces,” Lukken helped Wall Street in its efforts to avoid reforms that might have prevented such abuses, like the closing of a series of loopholes and exemptions that allowed a handful of major speculators to play a lopsided role in the setting of commodity prices.

Lukken's reward? He'll now head the Futures Industry Association (FIA), which is the "chief lobbying arm of futures investors."

<snip>

Obviously this kind of thing has been going on forever in Washington, but some revolving-door hires feel worse and more shameless than others, and this is one of those. But really it's the same old story: regulators keep falling down on the job, and keep getting rewarded for it by Wall Street, and nothing gets done about it.

I can't possibly do Taibbi's post justice in 4 paragraphs. This is a must read IMO.

Sadly, the revolving door that was supposed to at least slow down is just as bad as it had been under Bush, etc. As was quoted later in the piece, Mike Masters said this is the height of revolving door politics......“It’s not the revolving door. It’s the express elevator,” he says.

"Regulators keep falling down on the job, and keep getting rewarded for it by Wall Street, and nothing gets done about it."

Promises, promises. Sigh.

[sabrina 1]

1. Thanks, I haven't read the whole article, but will do so later.

Nothing about what caused the financial Melt Down will be fixed until there is a thorough investigation of the cause of it.

The Bi-Partisan Senate's two year investigation uncovered many incidences of 'possible criminal activities' and was sent to the DOJ for review. That seems to be a good place to start, but so far, since they completed their investigation, we have nothing more from the DOJ, hopefully we will.

[librechik]

2. As Obama has explained the laws have been changed to make these abuses even more common

He can't arrest people for not breaking the law. This is Congressional Republican mischief played out in the last minutes of the 20th century to make it impossible for reform.

AGs and district attorneys are refusing to prosecute because (thanks to the revolving door Repubs) it's just too difficult for them to make a case, and the opposition is formidable and well-financed.

This needs to be changed through Congress, Obama can ask for it, (and he has) but he can't change the laws, which have been undermined by interested parties.

[woo me with science]

3. Too bad he doesn't know anyone, or have any influence, in Washington. nt

[librechik]

4. I think that was meant to be sarcasm, but it's really true

Has Obama gotten any cooperation at all from Washington Republicans, the only ones at this point who are able to introduce legislation? No. In fact, Obama has less influence on the Congress than any previous president, in my opinion. He has (a very few) friends on Wall Street, but of course those friends are not at all helpful becasue they benefit from the situation and certainly don't want it changed.

[woo me with science]

5. He certainly seems to have friends on Wall Street.

He keeps finding new people for his administration there.

Of course he has influence. He is the President of the United States. He was certainly able to pressure attorneys general across the country to abandon their criminal investigations of corrupt banks and pursue settlements instead. The claim that there is nothing to prosecute is simply untrue. The attorneys involved in these cases have wanted to continue them, and the President has obstructed that with his settlements.

With regard to activities that should be illegal but are not, he should have thought about that before allowing bankers to write the banking "reforms" that have proven to be milquetoast at best. If he truly wants more stringent regulations, there is nothing stopping him from calling loudly and persistently for a return of Glass-Steagall or, at the very least, issuing a clarion call for other specific changes he wants and instructing every Democrat to echo that call and rally the people behind them to demand change.

Instead, he hires a Wall Street banker who profited from the housing collapse as his new Chief of Staff.

[Wind Dancer]

6. +1

Makes you wonder!

[banned from Kos]

7. No one with a week of experience in bank regs would trade Dodd-Frank for Glass-Steagall.

No consumer protection
no credit rating liability
no derivative regs
no TBTF liquidation
no commodity limits
etc

Glass Steagall is for the know nothings.

[Quantess]

8. That's interesting.

I have not looked into it yet. So typical, just a band-aid over a sliced aorta.

[woo me with science]

9. "No one with a week of experience in bank regs would trade Dodd-Frank for Glass-Steagall."

If by that you mean bankers, you are probably right. I'm not being tongue-in-cheek here. Your attempt to paint Glass-Steagall as discredited and Dodd-Frank as acclaimed by those in the know is simply and flatly untrue. In fact, there are very few apart from bankers and those beholden to them who agree with you, which is clear from even a cursory review of what has been written about both over the past year.

Bankers wrote much of this behemoth, and a huge part of the problem with it is that it was purposely designed to be a behemoth: over a thousand pages of rules and regulations that nobody will ever read, and of which only a tiny fraction has even been put into effect over a year and a half later. Probably most of it will never be put into effect, and for what IS put into effect, we will be finding loopholes and caveats and subclauses for years that will clog and muddy the process of punishing offenders, protect the banks, and prevent meaningful change. The way Dodd-Frank is written, regulators will be chasing after banks after they have committed their crimes and after the damage is done.

Glass-Steagall makes very clear what the rules are up front and could be implemented immediately. It would eliminate the problem of banks' growing so large that they threaten the entire economy when they collapse. Most importantly, it does the one critical thing that the bankers fought hard to ensure that Dodd-Frank does not: separate the asset-holding and speculating sections of the financial industry. *There* is your consumer protection: keeping banks from playing rigged casino games with the hard-earned deposits of Americans. For all its thousand and few hundred pages, Dodd-Frank, even with the Volker rule, does not accomplish this critical fix. That is why the bankers like it. They are back to business as usual, making profit from our money and coming for *our* cars and houses when the entire economic house of cards collapses

The bankers are trying to distract Americans with a tray full of economic band-aids, while keeping intact the core of the system that stuffs their pockets while annihilating the savings of Americans and crashing the global economy.