Wall Street “Democrats”
by David Atkins
Wall Street “Democrats” like Jon Corzine are why so many have given up on the Democratic Party and by extension the normal electoral process. From the Gray Lady:
Months before MF Global teetered on the brink, federal regulators were seeking to rein in the types of risky trades that contributed to the firm’s collapse. But they faced opposition from an influential opponent: Jon S. Corzine, the head of the then little-known brokerage firm.
As a former United States senator and a former governor of New Jersey, as well as the leader of Goldman Sachs in the 1990s, Mr. Corzine carried significant weight in the worlds of Washington and Wall Street. While other financial firms employed teams of lobbyists to fight the new regulation, MF Global’s chief executive in meetings over the last year personally pressed regulators to halt their plans.
The agency proposing the rule, the Commodity Futures Trading Commission, relented. Wall Street, which has been working to curb many financial regulations, won another battle.
Yet with MF Global in bankruptcy and regulators scrambling to find $630 million in missing customer funds, Mr. Corzine’s effort may come back to haunt him.
The proposed rule would have restricted a complicated transaction that allowed MF Global in essence to borrow money from its own customers. Brokerage firms are allowed to use customers’ money to earn interest, not unlike banks, but this rule would have outlawed using customer funds for a loan to the firm itself.
While such financing is not unknown on Wall Street, it carries substantial risk. An outside lender would require a firm like MF Global to produce strict accounting for a loan. Without that oversight, regulators worried that firms could use such internal customer money inappropriately, including bolstering the business in hard times. The proposed rule would have affected several dozen other financial firms.
Regulators are now examining whether these transactions explain the missing money at MF Global, according to people briefed on the investigation.
In order for Democrats to be credible over the long-term in the eyes of the voting public, they will have to ditch dead weight like Corzine, the epitome of a Goldman Sachs “Democrat.”
For far too long these folks have skated by in Democratic circles because they’re good on social issues, and because they keep the Wall Street cash rolling in. But with a Republican Party resurgent just a couple of years after it was declared near dead, and the vast majority of the progressive spectrum fiercely against Wall Street, it is no longer feasible for Democrats to keep running the Wall Street playbook simply from a political perspective (to say nothing, of course, of the wrongness of this type of thing from a policy perspective.)
I realize that asking the President to change course, stop trying to protect Wall Street and the big banks, and fire Tim Geithner is like beating my face into a brick wall in one sense. But unlike with the brick wall, it can’t hurt to make the attempt.
No matter what happens with the Presidential election, those who are still looking to make change through the electoral process–and I have yet to read a coherent progressive theory of change that details another scenario in practical and explicit terms–would do well to identify and remove all Wall Street Democrats at the Congressional and State levels. It’s well past time for a cleansing purge of guys like Corzine.
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