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May. 8 2010 - 1:32 pm | 2,401 views | 6 recommendations | 30 comments

Balance in the Washington Post

Lawmakers from both parties have been eager to excoriate Wall Street. But industry lobbyists warn that populist proposals to shrink, break up or otherwise shackle some of the giants of the financial world could do more harm than good to the economy. These advocates say that stiff regulation could stifle the flow of credit, undermine American competitiveness in global markets and cost jobs.

Among the terms that lobbyists used to describe elements of the legislation: “Draconian.” “Crazy.” “Insanely unproductive.”

via Lobbyists fret over legislation to reshape financial system.

Not sure if anyone saw this piece, but the Washington Post’s Brady Dennis fired off one of the weirder pieces of journalism I’ve seen of late in a news daily on the financial crisis.

The essence of his piece was that Wall Street lobbyists had been banking on the Financial Regulatory Reform bill getting pared down behind closed doors as it got closer to a vote. Over the course of 900 words or so Dennis quoted one lobbyist after another talking about how politicians were getting too emotional about this whole ruined-economy thing, and were proceeding with “crazy” and “insanely unproductive” proposals.

Dennis does this, but he never explains what’s so “crazy” about any of these proposals, and in fact only vaguely even hints at what they are. We get that proposals to cap the size of banks and limit prop trading desks are among the things he’s talking about, but we’re apparently supposed to assume automatically that we understand why those things are “crazy” and “unproductive,” which is very odd given the events of the last two years.

The other thing he doesn’t do is ask anyone on the other side of the deal to comment on the rank silliness of these lobbyists’ claims. Maybe that’s because he couldn’t find anyone on the other side. There are about 1800 financial lobbyists wandering DC these days — I was physically bumping into these guys in DC this week in the halls of Hart and Dirksen — while the leading reform groups (like Americans for Financial Reform) have few if any. (AFR, as far as I understand, has no paid lobbyists and just a few dozen volunteers).

This kind of rhetoric is something you normally see a lot of in campaign journalism. You’ll see whole pieces about how X or Y candidate is “strong on immigration” or “has a good record on defense issues” or “frightens voters with his radical stance on the environment,” but the writer won’t elaborate on what those positions actually are/were. You’re supposed to move straight past the details and just swallow the reporter’s characterizations. It makes it easier to cartoonize stories, which is a big plus especially during campaign season and is also proving useful during a detail-laden behemoth of a story like this FinReg bill.

I suppose there’s a way to read this piece that’s just a bust on all these overpaid lobbyists whining about how much harder than usual it suddenly is to bribe the congress away from real action — that was my first reaction to it — but to a reader who doesn’t know the particulars of this story it still comes across like the Post is saying that the politicians proposing reforms might be out of control and getting carried away by emotion. Which is odd. In general, the amount of rhetoric against this bill that sidesteps its actual content is growing to the point of absurdity.


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  1. collapse expand

    I guess if you’re a lobbyist, you don’t need to buy a ticket to a schmancy editorial salon at publisher Katharine Weymouth’s house in order to have a fair hearing of your case in the Washington Post.

  2. collapse expand

    My five year old could teach this dude a lesson in the art of the Five Ws. What a schill.

  3. collapse expand

    “These advocates say that stiff regulation could stifle the flow of credit, undermine American competitiveness in global markets and cost jobs.”

    Right. As if 30 years of direct and indirect union-busting, obscene transfers of wealth to the already wealthy, bailouts of insolvent TBTF banks, and de-regulation have done wonders for the job market, for our global competitiveness, and the free flow of credit. We’re a second world country, on a good day. The only thing we’re missing is a drug war like Mexico.

    Clearly, no one in DC — the politicians, the journalists, and the lobbyists, none have had their house foreclosed on, lost their jobs, and/or have been unemployed for a year or more. Certainly they’ve not had to live on the median income of $50,000/year. They have no freakin’ clue how fragile our social and economic fabric has become because of the policies they continue to push. Good luck sustaining a middle class with depressed wages and no unions, for example. Good luck sustaining the taxpayer funded infrastructure that makes wealth possible if the top 400 taxpayers earn an average $344 million and pay an effective tax rate of 17%.

    If they’re lucky, things won’t fall apart further.

  4. collapse expand

    Wimblehack 2010, Matt! It’s time!

  5. collapse expand

    The headline should read “Bank lobbyists complain that regulation is unfair, sun also rises.”

  6. collapse expand

    Mr. Taibbi, your work on Goldman is impressive. I’m an amateur writer on Newsvine who utilizes 20 years of experience operating a telecom firm to write hard hitting articles, some on Goldman. I just finished an article that links regulatory capture and rules changes to the overall economic collapse in addition to timing out perfectly for Goldmans ABACUS scheme. http://bit.ly/98oHvu I think my piece contributes nicely to your work and visa versa. I also feel the facts if acted upon become something greater than individual CDO frauds, but financial sabotage and potentially treason. At minimum the regulators and other supporting regulators violated their oaths of office, I believe.

    Keep up the great work. Our lawmakers will do the right thing if they realize their negligent stewardship of financial regulation has produced a financial system synonomous with Organized Crime and Treasonous conduct.

  7. collapse expand

    Mr. Taibbi,

    The Washington Post has a magazine to sell. Who do you think is going to pay beaucoup bucks for Newsweek? Not a bunch of readers, subscribers, or ordinary citizens. WaPoCo knows which side of the bread is buttered.

    That is the short term, long term it is a somewhat different point. Who is going to produce big profits in country in the next few years? Not newspapers, not steel companies, but Wall speculators will. They are the only game in town.

  8. collapse expand

    RE:suppose there’s a way to read this piece that’s just a bust on all these overpaid lobbyists whining about how much harder than usual it suddenly is to bribe the congress away from real action

    With a crook like Dodd in charge, why would you hold out hope for real action?

  9. collapse expand

    Brady Dennis is nothing but a Wall Street spin doctor. A good deal of Wall Street firms, among their other crimes, deliberately launder money for organized crime, including the drug cartels (a story the press has been patheticly weak in covering). As such, it is fair to say that I don’t intend the Wall Street spin doctor label as a compliment.

    Not too long ago Brady Dennis wrote a piece in which he was discussing whether criminality was involved in cases with some Wall Street players and all he seemed to do was hint that S.E.C. action was the preferable way to go rather than criminal action by the Justice Department. It was like: hint, hint, please don’t indict the folks on Wall Street that I spin for. Can’t we just have a nice little civil action from the S.E.C. where everyone just pays a fine and walks away basically unharmed.

  10. collapse expand

    Now, with the internets, there’s no journalist on any side of any argument that’s gonna be able to coast on their reputation or provenance, but rather by their actual content and its reasoning. With demerits for hypocrisy or self-serving..

    (naked puts on GS, MS, ING.. I’ll be happy until the Plunge Protection Team really kicks it into high gear this week with trillion-dollar swaps and flooding the zone with Euros.. I’m just hoping Greek protests will keep folks nervous..)

  11. collapse expand

    In a couple of ways, the rigged game run by Wall Street reminds me of slavery. Powerful financial interests protect the status quo, and, one hundred years from now, no one will pretend it was morally defensible.

  12. collapse expand

    the politicians proposing reforms might be out of control and getting carried away by emotion. ”
    Oh spare me. The wingnuts are always announcing what they are doing and why and how, and then projecting that onto the Opposing side and saying…It is them.
    So simple and sad that these are Americans and they have naught a whit of Loyalty or Love for their country or it’s people.
    And they say WE should follow THEM???
    Sorry Charlie. Forgeddaboudit.

  13. collapse expand

    Americans for Financial Reform will be helping to organize protests in D.C. May 15th-17th.

  14. collapse expand

    The critical issues in the proposed financial regulation bill are quite simple.

    Congress has a habit and long history of crafting poor regulation that over regulates and causes unintended consequences. Their regulation seldom is reform. This should cause everyone to be suspecious or even skeptical when Congress considers legislation.

    In the current financial regulation discussion and proposed bill, it appears the Congress does not fully understand the causes of the financial crisis.

    The financial crisis was started by housing which the Congress pushed and puffed up. It spread because financial firms had excessive short tern debt in their capital structure. This is caused by Congress because they have chosen to tax corporate debt less than equity capital which they tax twice.

    Regulation of Freddie Mac, Fannie Mae, FHA
    is not being considered. Changing the tax structure of debt and equity is not being considered. Bailouts have not been stopped. They have been artfully hidden in the proposed bill.

    Congress always starts regulation discussion with the aim of raising campaign money not changing legislation. They did so in this time too.

    This proposed legislation will not do the job of avoiding the next financial crisis; it wouldn’t have even avoided the last financial crises.

    The government was a main cause of the last financial crisis; they will be a cause of the next one and those that come later.

  15. collapse expand

    Obama attacks ipad, ipod on Mother’s Day:

    Will Obama and his cronies destroy Apple stocks on Monday?


  16. collapse expand

    I had a similar reaction reading a piece in the Post’s poor stepchild, Newsweek.
    This one was on education reform and it began something like “Bill Gates wants to talk education reform. The real kind. Not the kind that the teacher’s unions talk about.” OK, I’m sure I’m mangling it here, but what resonated with me is that the author did not elaborate one bit on why teachers had absolutely nothing to add to the debate. On the other hand, he was more than willing to go to bat for Gates’ proposals which had much to do with saturating the classroom with computers and “connectivity” and probably little to do with the high quality education he once received.
    Of course, not one word on the fact that those trained for these “in demand” high tech jobs may one day be competing with lower wage workers sporting those H1B visas of which Mr. Gates is so fond.
    Mostly I was disgusted with how teachers were simply dismissed with no further discussion.

    A bit of preemption for a poster that may be so inclined– I’m not really interested in discussing the merits of teachers unions.

  17. collapse expand

    “WASHINGTON—The White House said Friday that Elena Kagan’s membership on an advisory panel for the securities firm Goldman Sachs Group Inc. wouldn’t disqualify her for a position on the Supreme Court.”


  18. collapse expand

    Ummm…why the fuck would you ask those guys to comment anyway? Aren’t they getting paid to say exactly that? They are INDUSTRY LOBBYISTS afterall. Is there any mystery at all about what is motivating them to say that? Or is he just banking on hitting a certain percentage of complete numbskulls and swinging their opinion? What’s next, getting advice from the staff of Field and Stream on where to get a good vegetarian meal?

  19. collapse expand

    The Post is part of the establishment and fears reform. Can you believe the EU and IMF just pumped $1 Trillion of vapor money into the system? The Post will report that news like it is a good thing. It is for them.

    2012 Can’t get here soon enough!
    Aimlow Joe

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