Incumbents Still Welcome Wall Street's Poison

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)

 

Why Wall Street's Political Poison Is Still Catnip for Many Incumbents

oday's quiz: At a time when California's Republican gubernatorial candidate Meg Whitman is losing ground to her Republican rival in the primary because of her ties to Wall Street, when Utah's incumbent Senator Robert Bennett was just booted out by Republicans who are furious that he voted to bailout Wall Street, when New Jersey's Jon Corzine lost his bid for reelection partly because of he was formerly head of Goldman Sachs, when Connecticut's Chris Dodd was so tarnished by his close ties to Wall Street that polls showed he had little chance of reelection - at a time, in other words, when Wall Street is political poison, why are politicians still so intent on doing its bidding?

Answer: Wall Street's almost endless supply of money for upcoming campaigns.

Case in point: The measure in the banking bill that would force banks to push their derivative trading into separate units rather than rely on tax-payer subsidized insured deposits. For reasons I've already stated, the measure is common-sensical.

Wall Street hates it because it would cost it billions.

Already New York Representative Michael McMahon says he'll work to remove it from the bill. Yesterday, New York Representative Gary Ackerman, also a member of the finance committee, told his staff to circulate a draft letter yesterday to House members seeking their opposition to it.

Watch who signs Ackerman's letter. Listen for the positions of members of the conference committee. Vote accordingly next fall.

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Robert Reich is Professor of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He has written twelve books, including "The Work of Nations," "Locked in the Cabinet," and his most recent book, "Supercapitalism." His "Marketplace" commentaries can be found on publicradio.com and iTunes.