The Washington-Wall Street Revolving Door Keeps Spinning

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We’ve already made our choice for the best headline of the year, so far: “Citigroup Replaces JPMorgan as White House Chief of Staff.”

When we saw it on the website Gawker.com we had to smile — but the smile didn’t last long. There’s simply too much truth in that headline; it says a lot about how Wall Street and Washington have colluded to create the winner-take-all economy that rewards the very few at the expense of everyone else.

The story behind it is that Jack Lew is President Obama’s new chief of staff — arguably the most powerful office in the White House that isn’t shaped like an oval. He used to work for the giant banking conglomerate Citigroup. His predecessor as chief of staff is Bill Daley, who used to work at the giant banking conglomerate JPMorgan Chase, where he was maestro of the bank’s global lobbying and chief liaison to the White House. Daley replaced Obama’s first chief of staff, Rahm Emanuel, who once worked as a rainmaker for the investment bank now known as Wasserstein & Company, where in less than three years he was paid a reported eighteen and a half million dollars.

The new guy, Jack Lew – said by those who know to be a skilled and principled public servant – ran hedge funds and private equity at Citigroup, which means he’s a member of the Wall Street gang, too. His last job was as head of President Obama’s Office of Management and Budget, where he replaced Peter Orzag, who now works as vice chairman for global banking at – hold on to your deposit slip — Citigroup.

Still with us? It’s startling the number of high-ranking Obama officials who have spun through the revolving door between the White House and the sacred halls of investment banking. Sure, you can argue that it makes sense that the chief executive of the nation would look to other executives for the expertise you need to build back from the disastrous collapse of the banks in the final year of the Bush Administration. Remember — it was Bush and Cheney with their cronies in big business who helped walk us right into the blast furnace of financial meltdown, then rushed to save the banks with taxpayer money. That little fact seems to have been overlooked in the current primaries.

All this brings back memories of Hank Paulson, doesn’t it? Hank Paulson, the $700 million man who became secretary of the treasury for President Bush. Paulson had been head of Goldman Sachs, the rich investment bank. As his successor at Goldman Sachs, Paulson chose Lloyd Blankfein. Several times, according to Bloomberg News, Rolling Stone, and Paulson’s own memoir, the treasury secretary made sure Blankfein and Goldman got privileged inside information.

But Bush and Cheney aren’t the only ones to have a soft spot for financiers. President Obama may call bankers “fat cats” and stir the rabble against them with populist rhetoric when it serves his interest, but after the fiscal fiasco, he allowed the culprits to escape virtually scot-free. When he’s in New York he dines with them frequently and eagerly accepts their big contributions. Like his predecessors, his administration also has provided them with billions of taxpayer dollars – low-cost money that they used for high-yielding investments to make big profits. The largest banks are bigger than they were when he took office and earned more in the first two-and-a-half years of his term than they did during the entire eight years of the Bush administration. That’s confirmed by industry data.

And get this. It turns out, according to The New York Times, that as President Obama’s inner circle has been shrinking, his “rare new best friend” is Robert Wolf. They play basketball, golf, and talk economics when Wolf is not raising money for the president’s campaign.

Robert Wolf runs the U.S. branch of the giant Swiss bank UBS, which participated in schemes to help rich Americans evade their taxes. During hearings in 2009, Michigan’s Senator Carl Levin, chairman of the permanent subcommittee on investigations, described some of the tricks used by UBS: “Swiss bankers aided and abetted violations of U.S. tax law by traveling to this country with client code names, encrypted computers, counter- surveillance training, and all the rest of it, to enable U.S. residents to hide assets and money in Swiss accounts.

“The bankers then returned to Switzerland and treated their conduct as blameless since Swiss law says tax evasion is no crime. The Swiss bank before us deliberately entered United States, actively sought U.S. clients and secretly helped those U.S. clients defraud the United States of America.”

And so it goes, the revolving door between government service and big money in the private sector spinning so fast it becomes an irresistible force hurling politics and high finance together so completely it’s impossible to tell one from the other.

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  • Ethelyntheisen

    I have missed Bill Moyers 1st and 2nd programs. Will they be aired again on PBS ?

    Jan. 23, 2012
    Thank you,
    Ethelyn Theisen

  • Sergneri

    I just watched them via this web site, quite good as usual for Moyers and company.

  • http://www.billmoyers.com/ AnneLBS

    Hi Ethelyntheisen,

    Try watching the full episodes on our site, http://billmoyers.com/video/. We make the shows available on Friday nights.

  • Stormkite

    Okay, harder question:  Are transcripts available for people who don’t have stream-capable connections?

  • Anonymous

    You found the statement “Citigroup replaces JPMorgan as Whitehouse chief of staff.”, amusing…….try this one
    http://open.salon.com/blog/km_breay/2011/11/21/goldman_sachs_announces_candidacy_for_president 

  • http://www.billmoyers.com/ AnneLBS

    Transcripts are always available directly below each video. Click below the video where it says “Full Transcript”, good luck!

  • Bonniesoley

    The first two shows were excellent! Looking forward to more. My only hope that the “right” people will watch the shows instead of refusing to be confused by the facts!

  • Anonymous

    The above article may give the reader the impression that the tight connection between the presidency and Wall Street is a recent development.  Murray Rothbard wrote an excellent essay that dates this connection to the nineteenth century.  
    http://www.lewrockwell.com/rothbard/rothbard66.html   The fox has been in the hen house for much longer than most would suspect.

  • PhilipGregory

    You couldn’t make this stuff up…

  • Anonymous

    Promises from a slimy, parasite BlueDog. BlueDog = republican parasite. Then you have your Bankster parasite, see how the virus morphs? Democrat, Republican, Libertarian, one big crime resistant virus that’s made us all sick. Is there a cure? Afraid not, not in time anyway. All we can hope for is that, when the revolution erupts the military will have enough smarts to support it. but, don’t count on it, history gives us a grave insight. I hope to be dead by the time all this is realized. There’s your hope people. 

  • Anonymous

    You’re right in your assessment. I have a nightmare of Syria every night.

  • Anonymous

    The fox is a polar bear now.

  • Anonymous

    That’s super-service. Thanks Anne.

  • Anonymous

    This website is my home away from home. THANKS!

  • David F., N.A.

    Off-topic rant:  Did anyone notice that President Obama didn’t even mention Glass-Stegall, last night, during his SOTU.  I heard him mention it at least 10 times, in ’08, and there were at least a half dozen campaign speeches on youtube with it (all which have been conveniently scrubbed or I’d be embedding them all the time).  I guess Obama and his neoconservaDem drones are satisfied with his Dodd-Frank CDS loophole-laden, sweeping finance reform bill.

    This is for all you neoconservaDems drones out there; do you know the difference between politician who will really walks-the-walk when it comes to fighting for a cause and a politician who caves-in to his or her opponents?  Either, you honestly don’t know, or you’re just as full of crap as the neoconservaDem media (MSNBC…).  I, personally, think Obama intentionally squandered his two-year window with a Democrat majority in the House and Senate.  And don’t give me that filibuster excuse.  Because the Senate could have used reconciliations which only require an up-or-down vote (51%) and trump filibusters.  Face it!  Obama, along with the rest of Washington, is a multinational corporation employee.  None of them care about what is right for America because they ALL answer to BofA, Exxon-Mobile, UnitedHealth, GE…

    Occupy DC!

  • Anonymous

    3 years ago Moyers (see To Nationalize….2009 on Bill Moyers Journal Blog) was asking us to entertain the idea of taking over and liquidating the too big to fail banks.
    Now Moyers’ rhetoric has “back-slid” to just getting the most informed segment of the electorate to pay attention and ask questions. I partially blame the financialist run Obama administration for this degenerate regression. I have often said Barack Obama is a hostage of the Oligarchy with all the policy making power of Drew Carey or Wayne Brady. As far as re-election- If the Price is Right he’ll Make a Deal.
    (Republican candidates are more of the Who Wants to Be a Millionaire   or    Wheel of Fortune persuasion. Next debate look for Romney to “phone a friend” while Gingrich bounces his belly while shouting “Big Money, Big Money, Big Money.” Paul is still playing  Truth or Consequences and Santorum, Queen for a Day.)

  • Droque

    Bill Moyers needs to produce a Documentary on
    the “International Private Mutual Welfare Trust” (IPMWT or Trust) if we really want
    to end the Washington-Wall Street Revolving Doors.

    Only the IPMWT can check the power of the
    Multinational Corporations over our economy, society, and the world.

    View our Website & Video that shows
    how to establish Democratic Capitalism that democratizes monopoly vulture capitalism. 

  • Neil C Denver

    Occupy Wall Street’s efforts are completely misplaced.  The real culprits are in Washington.  Honest liberals and conservatives alike should “put on their marching shoes” and march on the White House and the Capitol Building.

    I found it amazing when President Obama named Jeffery Immelt to head his Council on Jobs and Competitiveness.  GE has been one of the worst offenders of Crony Capitalism.  During the ‘peak’ of the financial crisis, GE Capital, the company’s financial arm, received over $120 billion
    in loans from the FDIC with interest
    rates of less than 1% to bail them out of mistakes that they were totally responsible for themselves.  And of the $340 billion subsidies of the government’s Temporary Liquidity Guarantee Program (TLGP), the records show that they received 26% of that amount.

    It should be noted that GE ‘invests’ over $18 billion annually on lobbying.  And it paid off.  Although clearly ‘not’ a bank, GE lobbied for and received ‘bank’ status under the TARP program.

    Additionally, under Jeffery Immelt, GE outsourced over 40,000 jobs to India.  In 2010, while GE earned over $14.2 billion of which $5.1 billion came from domestic operations – - – they paid $0 in federal taxes. 

    Slime aside, just how successful was Obama’s choice for heading his Council on Jobs and Competitiveness?  Well, Immelt was named GE’s CEO in September  of 2001.  Their stock reached a high of 29.19 that month in 2001 and as of one minute ago stood at 19.00, a decline of 34.9%.  Not exactly a hero or good spokesperson for American jobs and competitiveness.

  • LForest

    Regarding Access:  My husband’s in another state, and wanted to see the John Reed interview online.  His company has blocked billmoyers.com- whether intentional or not, I don’t know.  I was able to email the transcript- so glad to have that option.

  • http://billmoyers.com BillMoyers.com

    Sorry to hear that LForest, but glad you found a good workaround. All of our episodes and segments have transcripts immediately below the videos. Know that some of the segments can also be found on our YouTube channel:

    http://www.youtube.com/user/MoyersandCompany

  • Tomcorrigan

    I really would love to know if President Obama is watching Bill Moyers these days….

  • Leonard Lucenti

    Nice comments here, but did you notice that our eloquent president is slowly backing off catch-phrases like “fat cats”, and Glass-Stegal?  I wonder why.  Maybe they are slowly getting to him to tone down the rhetoric, so that nobody would notice all the board hopping and C.E.O. shuffling around going on.  The end result, the fraction of the 1% elite still rule the day….because they don’t get paid by paycheck-to-paycheck.  Rather it’s about stock options, bonuses and golden parachutes.  Until the masses start thinking and doing what the invisible elite do, expect more of the same…no matter how many nice speeches we get from our president.

    Meg Whitman, former head of ebay and now with Hewlett Packard, paid over two hundred million dollars to run for California Governor.  How many families does that feed?  All this goes unnoticed as we focus on jobs that won’t be there for our kids, and they play ring-around-the-Reaganomics game.  All fall down

    Just listen to former labor secretary Robert Reich talk.  He makes a lot of sense to me.  Get him on  for another show. 

    Three hundred years of the industrial revolution, the next hundred years should be about creating jobs to save planet earth.  Industry has a negative side which our government fines modestly when caught.  When the Exxon Valdez ruined the Alaskan waterfront, the damage taxpayers paid for was over fifty billion dollars.  The fine was two billion dollars, still being argued in courts, last I heard. 

    Instead of soaking the poor working people, start strategically fining severely the careless, top heavy corporations polluting earth.

    Thank you, and a goodnight to all. 

  • Burtwiggins

    Wig
    The only fight you all have left is at the voting. Don’t forget to bring all your friends.

  • http://www.facebook.com/rraznikov Richard Raznikov

    http://lookingglass.blog.co.uk/2012/01/25/bloodsucker-and-the-big-o-12515650/
    for more on how the administration has loaded up with these guys.  

  • http://www.facebook.com/rraznikov Richard Raznikov

    Since the full cite wasn’t published, anyone interested will have to look for this column: “Bloodsucker and the Big O”.  It was published on January 25th.  

  • GradyLeeHoward

    Obey the Lord or be cast out!

  • Calvin Leman

    Solution to this: This is a campaign of, for, and by the
    people.Rocky Anderson, voterocky.orgI am Calvin Leman at treegrower.org