An unnamed bloggist at Salon.com has picked up my anti-Constitutional ball and is running with it. In a post this morning entitled "It's time for Wall Street to just shut up," (s)he gives more background on the reasoning behind the first proposal from the reformist agenda I posted here recently:
Yes, constitutional freedom of speech protections apply even to banks. But the system is clearly broken
The Epicurean Dealmaker has posted a ten-point manifesto for regulatory reform. Everything on it makes sense to me, starting with point one:1) Ban political campaign contributions by the financial industry.At The Baseline Scenario James Kwak observes that "there is at least one constitutional problem and possibly two" involved in the recommendation. That's a non-trivial issue.
But the financial industry's influence on legislation is equally non-trivial. There's got to be a better way. Check out the bombshell in Michael Hirsh's new Newsweek piece on Barney Frank and the perils of crafting new regulations for derivatives tradingIn the first three quarters of 2009, financial-industry interests have spent $344 million on lobbying efforts, putting them on pace to break all records, according to the Center for Responsive Politics. That's just for lobbyists' and lawyers' salaries, junkets, and dinners, and doesn't include political donations and issue ads. Even more impressive is the lobbying strategy that money is buying. According to insiders and industry e-mails obtained by NEWSWEEK, the banks have sought to stay in the background and put their corporate customers -- a who's who of American business, including Apple, Whirlpool, and John Deere -- out in front of the campaign. "This is an orchestrated, well-funded effort by the banks to manipulate our legislation and leave no fingerprints," says a congressional staffer involved in drafting the legislation.An industry that would not even be functioning without massive government help is now spending money at a record pace to prevent legislators from fixing the system so as to avoid a repeat. Set aside conflict of interest issues. The sheer gall of banker arrogance and self-interest is inexcusable. As none other than Treasury Secretary Timothy Geithner told Bloomberg News on Friday, even Goldman Sachs' protestations that it would have weathered the financial crisis without government assistance are nonsense.
There is more.
Now, I am no constitutional lawyer (thank God), but it does strike me that one can draw a useful distinction between "freedom of speech" and "freedom to influence policy through direct and indirect bribery," which is what a very large portion of our current lobbying and campaign contribution system seems to encourage. This problem is not limited to the financial services industry, either, but rather permeates the entire political and legislative process in this country.
I think few people would deny that the current system encourages undue influence and bad policy.
Is there a solution? (The lawyers may now speak.)
Sources: It's time for Wall Street to just shut up at Salon.com.