From the deregulatory period of 1998 to 2009, the financial sector spent $3.3 billion on lobbyists. In 2007, the financial industry employed 2,996 separate lobbyists, five for every member of Congress. During the debate over financial reform last year, the industry flooded the nation’s capital with its own lobbyists. On just one issue — regulating derivatives — financial industry lobbyists outnumbered consumer group lobbyists and other pro-reform advocates by 11 to 1. In fact, by 2010, the industry had hired a whopping 1,600 former federal employees as lobbyists. Included among these lobbyists were high-ranking former public leaders like former Democratic House Majority Leader Dick Gephardt (MO) and Kenneth Duberstein, Ronald Reagan’s chief of staff. Much of this lobbying is done through elite K Street firms that specialize in hiring government insiders. Yet there are also bank-funded front groups like the Chamber of Commerce that deploy lobbyists on behalf of the big banks.Both the magnitude of the institutions which the protestors are challenging (aka “The One Percenters”), and the comparably small grassroots, ostensibly leaderless composition of the Occupiers themselves (aka “The 99 Percenters”) reminded me of an essay by another acquaintance of mine, Christopher Ketcham, a freelance journalist who has written for magazines like Harper’s and GQ. This essay, entitled “The Curse of Bigness,” was published in Orion Magazine last March, though it’s certainly as instructive now as it was last year. It’s a lucid dissection of the problem of institutional size, and of the tendencies of larger corporations to keep themselves afloat through tax breaks, subsidies, bailouts, and other coerced concessions and protections from government which, ironically, reminds one of socialism.
“Marx, in his innocent, and now obsolete, way thought it would be the workers who would force the pace of socialism,” wrote John Kenneth Galbraith way back in the comparative innocence of 1985. “He must be looking with surprise at the way, in our time, it is the bankers and the big industrialists who lead the march, carry the flag.” And lo, swollen with government money, while the world economy immolated throughout the summer and fall of 2009, Goldman Sachs posted its largest profits ever.
In 1834, Roger B. Taney, who would become chief justice of the Supreme Court, warned about the supersized hostage-taking capacity of big concentrations in business. Listening to the bailout justifications throughout 2009, one could appreciate the fatefulness in Taney’s message. The big interests, he observed, “may now demand the possession of the public money . . . and if these objects are yielded to them from apprehensions of their power, or from the suffering which rapid curtailments on their part are inflicting on the community, what may they next not require? Will submission render such a corporation more forbearing in its course?” Ask Goldman Sachs.