Long Read: “Wall Street’s Straight Man in Washington”

I appreciate a story that tells me something I didn’t already know. The capitalists on Wall Street have traditionally been tolerant about their captive politicians’ religious quirks, as long as those quirks didn’t get in the way of Wall Street’s religion — aka, The Almighty Dollar. Here’s a great tale by Joshua Green at Bloomberg Politics about another government Talibangelical whose existence had not previously crossed my awareness, Rep. Scott Garrett (R – NJ), “chairman of the powerful Subcommittee on Capital Markets & Government Sponsored Enterprises”:

Garrett’s committee is vital to Wall Street. “The rules of the road for handling money and anything with the SEC go through this committee,” says Marcus Stanley, policy director of the nonprofit Americans for Financial Reform. “There’s a ton of money at stake.” In Washington, the committee is known as the ATM, because banks and hedge funds shower the chairman with contributions. After the Dodd-Frank financial law forced hedge funds to register with the Securities and Exchange Commission, Garrett, already the recipient of more Wall Street money than almost any other member of the House, got millions more. The banks pay to have a voice, ensure they’re at the table when new rules are discussed, and insinuate themselves into the chairman’s good graces.

Much of the money Garrett collects from Wall Street is supposed to be passed along in the form of party dues to the GOP’s campaign arm, where it’s used to help other candidates get elected. So the committee is also important to Republicans because it binds the party with the business community in a mutually profitable arrangement. But back in July, Garrett threw a wrench into this smoothly humming machine.

At a private caucus meeting, he got into a heated dispute with his colleagues by declaring that he’d withhold hundreds of thousands of dollars in National Republican Congressional Committee dues to protest the party’s support for gay candidates. His outburst immediately caused a rift in the caucus…

Some of Garrett’s colleagues were simply upset that he was stiffing the NRCC. But others understood that he was jeopardizing the party’s electoral and financial fortunes: As the GOP struggles to widen its appeal, Garrett’s comments, which quickly became public, reaffirmed the impression of Republicans as stridently intolerant…

The political fallout from Garrett’s remarks pales compared with the anguish it’s created in some corners of Wall Street. The financial industry ranks among the biggest donors to the Republican Party. But it has also been a pioneer in advancing gay rights. Garrett’s reelection race presents banks and investors with a fascinating—and excruciating—moral dilemma: Do they follow their financial interests and continue supporting a chairman whose antiregulatory views largely jibe with their own? Or do they honor their professed commitment to LGBT equality by cutting off that support and potentially angering a powerful industry overseer?…

…[B]anks and investors inclined to drop Garrett over his antigay views would be taking a risk: They rely on him to fight their battles and could open themselves up to retaliation. Garrett, for example, has led the effort to block the Treasury Department from designating nonbank institutions as “systemically important financial institutions” and imposing an added regulatory burden. He’s pushed to privatize mortgage markets and abolish Fannie Mae and Freddie Mac. And his jaundiced view of activist investors has led him to explore measures that would make it easier for companies to fend off unwanted attacks…

It’s imperative for Garrett to be seen as firmly in command of the capital markets subcommittee, because that’s the basis of his Wall Street donations. A weak chairman ostracized by his colleagues won’t move many bills or sway the full committee; the invisible transaction of Washington influence will stop working for him. Bank lobbyists who write checks to remain in his favor and get their CEOs invited to his hearings to offer their “perspective” will be less receptive to fundraising entreaties.

Yet Paul Ryan, the new House speaker, won’t dare remove Garrett, because punishing recalcitrant members of the Freedom Caucus is what cost his predecessor, John Boehner, his job. Garrett’s biggest threat is the possibility that his financial supporters will abandon him—something that’s already begun happening in the wake of this summer’s controversy. Banks and hedge funds are loath to address Garrett’s remarks, but his most recent disclosure filing shows that several major donors stopped giving to him, including Goldman, JPMorgan, and his biggest donors, Singer and Elliott Management…






46 replies
  1. 1
    Baud says:

    Interesting read. Thanks.

  2. 2
    John Revolta says:

    Trying to remember when I ever saw the word “subcommittee” without the word “powerful” in front of it.

  3. 3
    debit says:

    I think this calls for a Nelson Muntz “Ha ha!”

  4. 4
    Mike J says:

    @John Revolta: No results found for “powerful Subcommittee on Environment and Economy”.

  5. 5
    Baud says:

    Some of Garrett’s colleagues were simply upset that he was stiffing the NRCC. But others understood that he was jeopardizing the party’s electoral and financial fortunes: As the GOP struggles to widen its appeal, Garrett’s comments, which quickly became public, reaffirmed the impression of Republicans as stridently intolerant…

    Ain’t hurt them yet.

  6. 6
    Corner Stone says:

    I saw this a day or so ago. It wasn’t here?

    ETA – I guess it was somewhere else pointing to Bloomberg.

  7. 7

    It’s not a hard call. If the Wall Streeters cared about gay rights more than the almighty dollar, they wouldn’t be supporting the Republicans in the first place. They’d love to have both, but when push comes to shove, they care more about money than anything else.

  8. 8
    debbie says:

    The banks, like the GOP establishment, are finding the beast they created isn’t as docile and submissive as they’d hoped.

  9. 9
    John Revolta says:

    @Mike J: heh. I stand corrupted.

  10. 10
    Adam L Silverman says:

    Couldn’t have happened to a nicer guy.

  11. 11
    Bill Murray says:

    Do they follow their financial interests and continue supporting a chairman whose antiregulatory views largely jibe with their own? Or do they honor their professed commitment to LGBT equality by cutting off that support and potentially angering a powerful industry overseer?

    is there really any doubt here? Mammon uber alles

  12. 12
    Patricia Kayden says:

    @Roger Moore: Exactly. Republicans’ homophobic views are out there. If you support Republicans, you’re supporting an anti-gay rights party. There is no doubt that a Republican President will nominate Justices to overturn last summer’s marriage equality SCOTUS ruling.

  13. 13
    cmorenc says:

    @Baud:

    Some of Garrett’s colleagues were simply upset that he was stiffing the NRCC. But others understood that he was jeopardizing the party’s electoral and financial fortunes: As the GOP struggles to widen its appeal, Garrett’s comments, which quickly became public, reaffirmed the impression of Republicans as stridently intolerant…

    Ain’t hurt them yet.

    We can still root for injuries.

  14. 14
    Baud says:

    OT: Bernie just released his Medicare for All plan. Vox has the rundown here.

  15. 15
    The Republic, Blah Blah Blah... says:

    Garrett’s comments […] reaffirmed the impression of Republicans as stridently intolerant…

    Huh? Impression?

    Ain’t no impression about it…

    I feel I’m on safe ground calling Republican intolerance a bare-knuckled fact of life…

    but (Garrett’s) most recent disclosure filing shows that several major donors stopped giving to him, including Goldman, JPMorgan, and his biggest donors, Singer and Elliott Management…

    Now this – when it starts costing them serious money – might eventually make an impression on them… but then, maybe not, if others step up to replace those dollars…

  16. 16
    Breezeblock says:

    Yah, he’s not my Congress-asshole, but he IS an asshole par excellance. This whole “who do you love more, money or your partner?” dynamic will be interesting to watch.

    My money (ha!) is on money.

  17. 17
    The Republic, Blah Blah Blah... says:

    @Breezeblock: What did Bob Dylan once say?

    “Money doesn’t talk… it swears”?

  18. 18
    I'mNotSureWhoIWantToBeYet says:

    @Baud: Thanks.

    It will be good to see RM’s take on it.

    The last lines of the Vox piece say:

    The plan is pretty vague about details outside of financing. It does specify that unlike Medicare, the plan would have no deductibles or copayments at all.

    Sounds great, in a way.

    But what about Part B, Part D? What about Medicare basically covering everything – how would cost increases be kept under control?

    Blue-sky thinking about how the system could be different is good and necessary. Doing the figuring of how to pay for it is good and necessary. But there’s so much more that needs to be known before we really know if this plan would actually work if it passed Congress. Which it won’t, of course. (Not until after the 2020 Census and redistricting, anyway.)

    Presumably he’ll be asked about it during the debate tonight. I trust HRC will have a comeback about it, also too.

    My $0.02.

    Cheers,
    Scott.

  19. 19
    kindness says:

    I’m surprised. New Jersey, eh? Ain’t the NY/New England values I grew up with. But you know, things were different then. Republicans believed in the right to an abortion.

  20. 20
    Corner Stone says:

    Sean Penn is just inconsolably nuts.
    /newsflash

  21. 21

    punishing recalcitrant members of the Freedom Caucus is what cost his predecessor, John Boehner, his job.

    Screaming bullshit. Boehner himself had to go begging Ryan to take over his job. If the guy you fired gets to keep his job until he finds his own replacement, because you sure as Hell can’t find anyone, then you have not in any meaningful way fired him. Boehner got sick of the Tea Party whining and quit.

  22. 22
    Felonius Monk says:

    @Corner Stone:

    Sean Penn is just inconsolably nuts.

    Old news. :)

  23. 23
    Ruckus says:

    @Frankensteinbeck:
    He may have gotten tired of the morons but he still seems to want to live on their side of the street. Of course there does seem to be a few conservatives who don’t like the morons but like JB I don’t hear or see many of them jumping ship.

  24. 24
    a hip hop artist from Idaho (fka Bella Q) says:

    @Adam L Silverman:

    Couldn’t have happened to a nicer guy.

    QFT

    OT: Do you have an update on Meal Team Six?

  25. 25
    David *Rafael* Koch says:

    Australian open begins tonight on ESPN 2

    Serena is opening the tournament right now in a beautiful mango/yellow outfit.

  26. 26

    @Ruckus:
    They don’t like how the morons are making their racist, plutocratic, mean-spirited, misogynistic, Christianist policies look racist, plutocratic, mean-spirited, misogynistic, and Christianist. Damn it, when will Morning In America come again?

  27. 27
    the Conster says:

    Why is Bernie allowing Cornel West to be a rep for him? In South Carolina????

  28. 28
    the Conster says:

    @David *Rafael* Koch:

    I think the color is marigold – the color that Michelle rocked at the SOTU.

  29. 29
    David *Rafael* Koch says:

    @the Conster: cuz spending his adult life in a non-diverse community has left him outta touch with everyone who isn’t white-male. Kind of like the people who vote for Oscars.

  30. 30
    Punchy says:

    This shit speaks to why Trump is so popular. This kinda barely-legal, blatant palm greasing and pseudo-extortion just really pisses off non-financial types. No wonder the rubes want the whole place flushed out.

    The difference, of course, is that the GOP base is too stupid to realize that Trump is exactly the wrong person to fix such a thing. In fact, he actively work to make it worse…

  31. 31
    El Caganer says:

    @the Conster: Democratic Socialist nostalgia?

  32. 32
    Karen says:

    Medicare for all only means that Medicare pays 80% and you pay 20%. 20% can be very expensive, especially with Part D’s donut holes. I’m finding about all this the hard way, I had to get a Medicae Advantage plan.

  33. 33
    Ruckus says:

    @Karen:
    People think that medicare is free health care. Nothing could be farther from the truth. From the monthly deduction from your SS there is those times when things always cost more than medicare pays or the drugs that just aren’t covered. Free my ass. When people said we should just have medicare for all my first reaction was “They don’t have any idea what medicare really costs.”

  34. 34
    Ruckus says:

    @Frankensteinbeck:
    Isn’t that every day channel 4 at 8am?

  35. 35
    gene108 says:

    @Karen:

    Even Canada’s single payer system is not as generous as what Bernie’s proposing. From what I understand, on top of higher taxes, Canadians pay some sort of premium to the government – like Medicare – depending on the type of plan they have.

    If Roberts had not sabotaged Obamacare, we could be close to universal coverage now.

    Universal coverage does not have to equal single payer.

  36. 36
    goblue72 says:

    @Ruckus: Sanders supporters don’t think it will be free. They know it will involve taxes. They just don’t have a problem with increasing taxes. Because we aren’t Democrats-Formerly-Known-As-Republicans like blog. We’re democratic socialists.

    Raise taxes. On everyone. And buy stuff. For everyone. Its not that fucking complicated – its called Denmark.

  37. 37
    dogwood says:

    @goblue72:
    I know plenty of Sanders supporters who think it will be free. They also think college will be free.

  38. 38
    Gretchen says:

    @Adam L Silverman: @Adam L Silverman: @Adam L Silverman:
    Are you the Adam Silverman in the article?

  39. 39
    gorram says:

    @Roger Moore: And it reveals why they ever professed liking The Gays- marketing.

  40. 40
    sm*t cl*de says:

    Garrett’s comments, which quickly became public, reaffirmed the impression of Republicans as stridently intolerant…

    So the guy is retaining the proceeds of corruption for his personal use, against the expectation that he pass some on to the cronies who gave him that job, and the concern is about the appearance of some party members being intolerant?

  41. 41
    gorram says:

    @sm*t cl*de: I think the idea is that this is uniquely threatening to this, um, “donor constituency” because their justification for their financial influence is that even if it’s (more than) a bit plutocratic, this is the land of opportunity. The mythology that anyone can make it (even members of marginalized, even horrifyingly marginalized groups) tames the impression that it’s a very specific class of people buying elections to at least it’s a flexible and changeable minority doing that. So there’s some legitimacy at risk here, although admittedly it’s not like their entire self justification.

  42. 42
    Zinsky says:

    @goblue72: Amen, but let’s talk about what really costs this country a lot of money – THE MILITARY! Having 1,000 military bases scattered around the world is expensive. Having a fleet of nuclear submarines is very expensive. (By the way, ISIS doesn’t even own a rowboat) Having ten aircraft carriers is expensive. (BTW – aircraft carriers are not defensive weapon systems – they are for aggression and forward power projection). Having over 100 military golf courses is expensive. The military is where the taxpayers dollars are squandered, not on social programs. Cut the Pentagon’s budget in half and we all could get a nice tax cut, without being one bit less safe!

  43. 43
    Satby says:

    @Felonius Monk: @Corner Stone: Yeah he is, but he runs a hell of a disaster relief camp. Saw it (and him) in Haiti after the earthquake. Props for that.

  44. 44
    Lurking Canadian says:

    @gene108: At least in Ontario, the big difference between our coverage and Medicaid is that the province doesn’t pay for medication, unless it’s dispensed during a hospital stay.

    There is a provincial subsidy for drug purchases for low-income people, but it’s not part of the base package. Also (at least in Ontario) the health premium is just a tax, really. It’s moderately progressive (doesn’t affect low income people at all, scales a bit depending on income for middle-income people, but saturates at high incomes) but it doesn’t affect the quality of care. You don’t get more for paying more.

    On the subject of the OP…what gets me is how matter of fact it is. This is basically an article that says, “Wall Street is pissed off because their bought lackey in Congress is not staying bought.” Maybe the scandal here should be the BOUGHT LACKEYS IN CONGRESS????? Maybe somebody should raise their hand and say, “Wait. Isn’t bribery, you know, WRONG?”

  45. 45
    Barry says:

    @Punchy: “This shit speaks to why Trump is so popular. This kinda barely-legal, blatant palm greasing and pseudo-extortion just really pisses off non-financial types. No wonder the rubes want the whole place flushed out.”

    Yes, I remember the tens of thousands of Tea Partiers protesting against Bush Administration corruption.

    Not.

  46. 46
    Feathers says:

    Oh, man. When you’ve lost Elliott…

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