News Release

Wall Street and Politics

JAMES K. GALBRAITH
Galbraith is Lloyd M. Bentsen Jr. chair in government/business relations at the Lyndon B. Johnson School of Public Affairs at the University of Texas at Austin. His latest book is The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too.

Galbraith said today: “Revolutions devour their children. Deregulation has been the public faith of the financial sector since Reagan. Under Bush II, waves of predatory finance in housing were aggressively promoted by Alan Greenspan, by McCain’s closest economic adviser Phil Gramm, and by so-called regulators who systematically subverted the public interest. For a year, the Fed and Treasury have been propping up the markets in the hope that this system would recover on its own. It will not, and today’s [Lehman] collapse should mark the end of that mindset.”

A recent interview with Galbraith is at The Real News.
More Information

MAX FRAAD WOLFF
An economist and writer, Wolff is an instructor at the Graduate Program in International Affairs at the New School University. He is a frequent contributor to Huffington Post, Asia Times and The Indypendent. Wolff says that the decision to not bail out Lehman is a political and public relations one; he also states that a Federal Reserve rate cut tomorrow — widely rumored on Wall Street — would amount to a massive subsidy.

A recent interview with Wolff is at Democracy Now.

DOUG HENWOOD
Henwood is author of the book Wall Street and editor of Left Business Observer. He said today: “The weekend’s financial emergency and Wall Street’s Monday morning swoon in reaction to it are further proof that the housing bust and its fallout just won’t go away. Every time it looks like there’s been a resolution — Bear Stearns, Freddie and Fannie — there’s only more to come. This melodrama has more false endings than a bad horror movie. The authorities are scrambling for solutions, improvising as they go along. My guess is that this has more to run, and the structural problems of the U.S. economy (maldistribution of income, excessive borrowing, energy profligacy, etc.) are the underlying causes. Until those are addressed, we’re going to face years of financial problems, economic stagnation, an eroding job market, and strains on living standards. And it looks like we’re exporting these problems to the rest of the world. But our political system seems unable to discuss these issues seriously.”

SHEILA KRUMHOLZ
MASSIE RITSCH
Krumholz is executive director and Ritsch is communication director of the Center for Responsive Politics, which operates the OpenSecrets.org web page featuring in-depth information on money in politics. According to OpenSecrets.org, the top recipients from PACs and individuals associated with parts of the financial sector for the 2007-2008 election cycle are:

Commercial Banks:
Barack Obama: $1,884,358
John McCain: $1,703,678
Hillary Clinton: $1,572,508
Mitt Romney: $798,401
Rudolph Giuliani: $765,001

Insurance Companies:
John McCain: $1,312,155
Hillary Clinton: $1,262,409
Barack Obama: $1,147,886
Rudolph Giuliani: $887,750
Christopher Dodd: $829,106

For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020, (202) 421-6858; or David Zupan, (541) 484-9167