Bloomberg radio's Kathleen Hays's interview yesterday with former Republican Senator Judd Gregg caught my attention. Being that I aim to exploit every opportunity to expose incidences of cronyism to my readers, I find Mr. Gregg---who went straight from the U.S. Senate to Goldman Sachs---to be a particularly interesting character.
Now, two years after leaving office, he's made yet another career change; he's now the CEO of the Securities Industry and Financial Markets Association (SIFMA), Wall Street's largest lobbying group. Oh my!!
After the warm-up---where Mr. Gregg spoke inspirationally about how a "strong (insert crony here) capital market system" is essential to the long-term success of everyday folk---followed by a 10 minute love fest that Ms. Hays instigated by lauding his transparency (of all things), a listener tweeted in, asking Mr. Gregg to comment on the fact that Citigroup wrote 70 lines of an 85-line bill titled the Swaps Regulatory Improvement Act. Ms. Hays added; "isn't this just a little too cozy?". He attempted to redirect by talking about his experience (just before he left office to go to work for Goldman Sachs btw) as one of two senators in charge of "negotiating" derivatives regulations in the wake of the financial crisis. Ms. Hays interrupted him mid-stream with "but what about the latest one---the Swaps Regulatory Improvement Act---and how this one's coming down?" He then struggled through an explanation of how existing swaps regulations were poorly written and that, while he doesn't know who wrote this bill, "if it's better than what we're dealing with, and does a better job of making the markets safer, but also liquid, then that's what you want."
So, regulations that would better deal with the systemic risk posed by gargantuan banks, could---in your wildest dreams---be better written by gargantuan banks?? I tell ya, gargantuan banks must be (oh they indeed are) paying and promising an awful lot to get otherwise intelligent people (present and future lobbyists) to insult our intelligence in such a manner...