Further corroding trust and confidence in government and government officials, another senior government official takes his turn through the highly lucrative revolving door onto Wall Street: Former Republican House Majority Leader Eric Cantor (R-VA), who stunningly lost a recent primary election largely due to his cozy ties to Wall Street, has landed a top job on Wall Street for millions of dollars a year. His new employer said Cantor was hired to “advise corporate and investor clients on takeovers and other deals” even though he has virtually no finance experience, other than collecting and cashing many large Wall Street campaign contribution checks to him and Wall Street’s other political allies.
In a lengthy interview with New York Magazine, veteran journalist Annie Lowery asked Better Markets’ President Dennis Kelleher a number of questions about Cantor’s new job, his qualifications and what Wall Street is really looking for when it hires senior government officials:
Lowrey: You hire an Eric Cantor. What do you expect him to get up to?
Kelleher: Let’s look at Cantor’s résumé. Let’s look at all his investment-banking experience. Let’s look at his capital-markets experience. He has none. He has no experience or skills that would qualify him to be even an intern at a fifth-tier firm in the financial industry.
This, of course, gets to the question of why does Wall Street hire so many senior government and elected officials and why would it pay them millions of dollars when they have utterly no experience to do any finance-related job? “Ignore the PR spin and the attempt to put lipstick on the pig,” Mr. Kelleher told Politico.com. “Wall Street goes with the sure bet and the well-worn path. It simply doesn’t pay millions of dollars to former high ranking public officials for anything new or different. Wall Street is after what it is always buying: access, influence and unfair advantages.”
Mr. Kelleher also commented on why anyone should really care about the revolving door and Wall Street’s high profile purchased excessive influence on politics and policy:
“The revolving door is really important. It’s not just because of public officials selling out and influence-peddling. It’s even more important because it has this corrosive effect on confidence in government and public officials. The American people basically see Wall Street and Washington as in cahoots. They see massive bailouts funneled to Wall Street. They see no accountability. They see no prosecutions. And they see high-level officials coming from Washington, going to Wall Street, and getting paid.”
“The undue influence on the legislative process? That’s bad enough. But it’s the accumulative, corrosive effect that it has in discrediting government and government officials in my view that’s really bad.”
When is $17 billion less than $10 billion? When the Department of Justice (DOJ) settlement charade structures its latest deal with a Wall Street too-big-to-fail bank like Bank of America: In late August, Bank of America settled all its civil liability (and really ALL its liability of any and all types) related to its role in crashing the global financial system and almost causing a second Great Depression for what DOJ bragged was just under $17 billion. However, about $4 billion of that $17 billion will be tax deductible and it’s possible about half of $7 billion ostensibly targeted for so-called mortgage relief will likely be credit for what BofA already did or was going to do. These settlement charades are meant to mislead the American people into thinking that DOJ is tough on Wall Street and that Wall Street is really paying for its crimes: No double standard here is what they want you to believe. If only. Watch the short, but informative segment that the PBS Newshour did on the settlement and what is really going on.
One the world’s foremost experts and thought leaders in the area of international banking, Better Markets’ Senior Fellow Robert Jenkins recently penned an insightful, hard-hitting piece on the current state of banking in both the EU and the U.S published in the Financial Times: Jenkins weighs in on what a rise in interest rates could mean for the banking system on both continents if another crisis were to hit. “Regulators are reviewing the degree to which major banks could withstand the next period of financial turmoil,” wrote Jenkins. You can read the full opinion piece here.
Everyone likes to get away from DC and news during the Dog Days of August and we hope you did as well, but if you want to catch up on some of the must-read articles you may have missed, here they are:
Push for More Details on Bank Settlements Likely to Intensify: American Banker by Victoria Finkle 8/29/2014
Wrecking the Economy Means Never Having to Say You’re Sorry: New Republic by Dean Starkman August, 2014
The Sorry State of Bank Apologies: ProPublica by Jesse Eisinger 8/27/2014
An Unfinished Chapter at Countrywide: New York Times by Gretchen Morgenson 8/23/2014
Politically Connected Companies Get a Break from the SEC, Study Says: Los Angeles Times by Michael Hiltzik 8/12/2014
Bank of America agrees to nearly $17B settlement: USA Today by Kevin McCoy and Kevin Johnson 8/21/2014
In a Bank Settlement, Don’t Forget the Bulldozers: New York Times by Gretchen Morgenson 8/16/2014
Once Powerful, Mary Jo White’s S.E.C. Is Seen as Sluggish and Ineffective: New York Times by Jesse Eisinger 8/13/2014
When She Talks, Banks Shudder: New York Times by Binyamin Appelbaum 8/9/2014
Here’s How to Ensure Big Banks Don’t Need Another Bailout: The Fiscal Times by David Dayen 8/8/2014
Better Markets in the News:
Wall Street Has a Conscience. This Professor Is Determined to Find It: Bloomberg by Natalie Kitroeff 9/2/2014
The homecoming: Eric Cantor lands on Wall Street: LA Times by Michael Hiltzik 9/2/2014
What a House majority leader brings to banking: Marketplace by Noel King 9/2/2014
The color of Cantor’s parachute is green: MSNBC.com by Steve Benen 9/2/2014
Large or small, Capito tends to side with banks: West Virginia Gazette by David Gutman 8/31/2014