Our Wall Street Government

By Amanda Valerio, staff editor America’s finances are complicated enough. Decisions made by the nation’s financial policymakers have been debated with increasing fervor—some would argue hysteria—in recent months.

However, the decisions made now, at the close of the largest economic downturn since the Great Recession, hold painful implications for the country’s unemployed. These decisions are painful enough without wondering whether the decision-maker was thinking toward the country’s long-term economic future or his or her long-term prospects with Goldman Sachs.

Unfortunately, the roster of top policymakers does not inspire as much confidence in our financial and regulatory leadership as one might hope.

Here’s the run-down: William C. Dudley, President of the New York Fed, was chief economist of Goldman Sachs. Former Chief of Staff Rahm Emanuel was on the Board of Directors of Freddie Mac. Gary Genler, head of the Commodity Futures Trading Commission, was an executive at Goldman Sachs.  Head of the S.E.C., Mary Schapiro, is former CEO of the self-regulatory organization for the investment banking industry, FINRA.

And not only does the government hire many of its top economic positions from Wall Street. Many leave federal jobs to pursue lucrative positions in the private sector, such as former S.E.C. chairman Arthur Levitt who left the position for Goldman Sachs.

It is clear that what Charles Fergusons’ documentary Inside Job described as our “Wall Street government” has outlived the mortgage crisis.

Earlier this week former OMB director Peter Orszag accepted a job with Citibank. What’s more, he’s not the only former Cabinet member to join Citi this week. Former Commerce Secretary Carlos Gutierrez took a similar post.

There are a great many intelligent individuals working on Wall Street. But we need to stop putting them in charge of regulating their industry. The days of once and future Wall Street bankers in Washington need to come to a close.

One hopes that the appointment of the decidedly non-Wall Street Elizabeth Warren to the nation’s fledgling financial regulatory agency will tighten the lid on the Bureau of Consumer Financial Protection. But only time will tell.

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