Gold Plated Piranhas
by digby
Yesterday I wrote about how Chris Dodd has agreed to put the erstwhile independent Financial Consumer Protection Agency under the Treasury dept. I speculated that he did this not so much because of Republican recalcitrance but rather to please Wall Street, which doesn’t really want this agency to begin with, but will acquiesce as long as it will be staffed with “professionals,” preferably at the Fed or the OCC. I mused that Treasury might be a very nice faux compromise since it is staffed with may of the fine “professionals” preferred by the money men.
Lo and behold:
March 1, 2010 Advisors to Geithner, Paulson Join The Cypress Group; Open New York, Dallas Offices (Washington, D.C) — One of the first senior-level officials to leave the Obama Treasury Department is headed to The Cypress Group, a financial services lobbying and consulting firm based in Washington, D.C. Damon Munchus, who served as the Deputy Assistant Secretary for Banking and Finance in Treasury’s Office of Legislative Affairs, will open the firm’s New York office as a Managing Director. The Cypress Group will also open an office in Dallas headed by Managing Director Jeb Mason, who served as the as Deputy Assistant Secretary for Business Affairs under Secretary Henry M. Paulson Jr. With these additions, The Cypress Group now employs former senior-level advisors to the past three Secretaries of the Treasury as well as Secretary Geithner. At the Treasury Department, Mr. Munchus'[s] responsibilities included acting as principal liaison between the U.S. Congress and Treasury regarding financial institutions and capital markets, counseling senior Treasury officials on all pending financial matters, and creating and directing legislative strategy in order to achieve the Administration’s goals before Congress. Prior to his Treasury Department position, Mr. Munchus served as a member of President Obama’s FDIC Review Transition Team, a Vice President within the Investment Banking Division of Jefferies and Co., and a senior financial analyst for credit portfolio strategies at Fannie Mae. Mr. Mason, who served as Policy Advisor to Secretary Paulson, was awarded the Distinguished Service Medal by the Secretary for his contributions during the financial crisis. Prior to joining Treasury, Mr. Mason served the White House as Associate Director for Strategic Initiatives, advising senior White House staff and Cabinet officials on a myriad of issues including tax, budget, economic, and international issues.
Just as Congress enters the final stretch of the financial regulatory reform effort, one of the Treasury Department’s leading liaisons to the Hill, Damon Munchus, is bailing out to go work for a financial services lobbying and consulting firm. Munchus was one of Treasury’s chief negotiators with the House Financial Services Committee.[…]
Cypress is a five-year-old firm that specializes in telling banks and other investors what Treasury is up to and how they can best use that information to cash in. At the same time, a Cypress division is registered as a lobbyist on bank issues — a kind of dual role that leaves it simultaneously telling clients how to exploit Treasury regulations and market-interventions, while lobbying for or against those regulations and interventions. It also does its own investing. Munchus worked in the Office of Legislative Affairs, which deals directly with the Hill. His position as Deputy Assistant Secretary for Banking and Finance gave him intimate knowledge not just of the process but of key lawmakers — what they privately support what they secretly need; what they detest; and what makes them tick. That’s invaluable information to investors. Munchus couldn’t be reached for comment.
In case you still wonder why the government is always so flat-footted and outmaneuvered on important reform legislation, this should clue you in:
The ability of Wall Street to lure staffers into high-paying lobbying and consulting jobs has a corrosive effect on the legislative process, as staffers start doing the banks’ bidding even before a payday, in the hopes of getting one someday. Moves like Munchus’s only increase that incentive. “You’ve got to wonder how much of a fight administration lobbyists are putting up against people they see as their future employers,” Miller said.[…]
With the acquisition of Munchus, Cypress can now boast to employ high-level officials from four straight Treasury Secretaries.
There are a lot of factors that led to our dysfunctional system but this is the central one that touches all the others. The Village is a company town, and I don’t mean the government, I mean Big Business and Wall Street. It’s incestuous, corrupt and perhaps worst of all, completely inefficient and ineffectual, even for The Company. After all, Uncle Alan Greenspan eventually had to admit that these Mini Galts are incapable of even properly acting in their own self-interest by keeping American businesses competitive and the financial system working.
Instead they are operating like a tank full of piranhas rushing about furiously gobbling up everything in sight with no thought to whether or not there will be anything left tomorrow. That’s fine for fish, but humans are supposed to be a little bit more evolved. Certainly one would expect the elite leadership of the most powerful country in the world to have enough sense to realize that allowing the financial sector to have unfettered free rein again is just a tad risky. Left to their own devices there will be nothing left of this democracy and economy but bare bones.
But, hey, I’m sure this Damon chap in a fine fellow whom they all like very much. And besides he might be in a position to hire one day too …
Update: From Jamie Dimon’s mouth to Dodd’s ear. They’re going to put it in the Fed.
Why even bother?
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