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Why No One's Going to Drain this Swamp

Posted by Conspiracy Cafe on March 16, 2017 at 11:50 AM


by Wolf Richter Mar 8, 2017


The Financial Sector threw $2 Billion at Congress during the Election. Biggest Spenders? Not the Banks.


The Financial Sector – whose products, risk-taking, and shenanigans blew up the sector and everything around it during the Financial Crisis – has finally gotten the memo in a serious way: During the past election cycle (2015-2016), it doused the members of the US Congress with a record amount of money to “influence decision making” and get what they want: deregulation, handouts, and subsidies.


So how much? Over $2 billion.


That’s over $3.7 million per sitting member of Congress, according to a reportreleased today by Americans for Financial Reform. The $2 billion tab fell into two categories:

Campaign contributions by companies, trade associations, and individuals associated with the financial sector: $1.104 billion. This was “almost twice that of any other specific business sector.”

Lobbying expenses by 460 financial sector entities: $898 million

“The financial sector is by far the largest source of campaign contributions to federal candidates and parties, and the third largest spender on lobbying,” the report explains, based on data by the Center for Responsive Politics (CRP), which tracks campaign contributions reported to the Federal Elections Commission (FEC) and lobbying expenditures reported to the Senate Office of Public Records.


This “Financial Sector” includes commercial banks, S&Ls, credit unions, finance and credit companies, securities and investment firms, accountants, and “miscellaneous finance.”

But actual amounts are much higher:


Entities often report this data “many months late”; contributions and lobbying expenses reported after February 8 are not included in the report.

“Financial Sector,” as defined by the CRP, excludes some trade associations and companies with a “very substantial financial interests,” such as the US Chamber of Commerce, which lobbies extensively on financial issues, and the National Auto Dealers Association (NADA) which lobbies on policy regarding auto loans.

Also excluded is “dark money” contributed to nonprofits “that engage in political advocacy in their own right but do not have to report their donors. The total amount of unreported dark-money spending is widely believed to be at least as great as reported spending.”

So the $2 billion is a minimum. The actual total could be $4 billion, or whatever. That is starting to be real money.


The top 20 performers:


Who is Number 1? Goldman Sachs? Wells Fargo? Nope. The National Association of Realtors (NAR). It’s trying to get the government to inflate the housing market in myriad ways, for instance by dominating the mortgage industry, including guarantees and mortgage-backed securities, thereby subsidizing mortgage rates. It’s all about Realtors making more money because commissions are fatter if extracted from higher home prices. And the NAR is very concerned that the government might be cracking down onpandemic money laundering in the housing sector.


The NAR gave more than twice as much as the next guy in line, namely a quant hedge fund, Renaissance Technologies, followed by another hedge fund, Paloma Partners, followed by another hedge fund, Elliot Management, followed by the banking trade association, American Bankers Association.


Commercial banks are further down on this list (campaign contributions and lobbying expenses combined):

National Association of Realtors – $118,622,462

Renaissance Technologies – $53,479,983

Paloma Partners – $41,334,000

Elliott Management – $28,020,354

American Bankers Association (ABA) – $25,750,687

Bloomberg LP – $25,528,952

Soros Fund Management – $24,642,840

Pritzker Group – $23,668,814

Prudential Financial – $19,021,920

Securities Industry & Financial Market Association (SIFMA) – $16,006,600

Starr Companies – $15,316,251

Stephens Group – $15,193,306

Citadel LLC – $14,846,004

Wells Fargo – $14,755,343

Citigroup Inc – $13,676,918

Hendricks Holding Co – $13,499,525

MetLife Inc – $13,196,824

New York Life Insurance – $12,792,478

Goldman Sachs – $12,414,029

Investment Company Institute (ICI) – $12,382,079

The report lists many more entities by name. These are just the top 20.


Clearly, Goldman Sachs, near the bottom of the above list, doesn’t need to spend that much money on campaign contributions and lobbying. It gets what it wants by other means, for example having its ex-executives play major roles in the administration and at the Fed.

This chart of the past 9 election cycles shows how overall performances have improved over the years. So this is certainly an exciting growth sector in the US economy, however crummy the rest of the economy or corporate earnings might be. It also shows how the $2 billion were divided up between “campaign contributions” and “lobbying”:


Here are the top five recipients in the Senate:

Senator Marco Rubio (R-FL) – $8,687,969

Senator Ted Cruz (R-TX) – $5,482,011

Senator Charles E Schumer (D-NY) – $5,345,563

Senator Rob Portman (R-OH) – $4,158,259

Senator Pat Toomey (R-PA) – $3,918,262

And here are the top five recipients in the House:

Representative Paul Ryan (R-WI) – $5,727,069

Representative Kevin McCarthy (R-CA) – $3,397,980

Representative Patrick Murphy (D-FL) – $2,218,697

Representative Joe Heck (R-NV) – $2,167,660

Representative Chris Van Hollen (D-MD) – $2,149,471

The chart below shows campaign contributions to Democrats and Republicans, based on contributions that were identified by party (only a portion are), with the federal election cycle in solid columns and the in-between years in striped columns.


The Financial Crisis is already forgotten, except the key element for the financial sector, including the housing sector: they got bailed out by the government and to a much larger extent by the Fed – and they continue to get propped up with the still ultra-low interest rates and the Fed’s gigantic pile of securities, including mortgage-backed securities, that it has acquired during the phases of QE.


So it’s no big deal, apparently, for these players if there is another financial crisis. But deregulation must happen. Financial reforms must be rolled back. The housing market must be subsidized more than ever. Bonuses, stock-based compensation, share repurchases, and commissions beckon. What is in reality a relatively small amount of money – just a few billion bucks, a pittance really – must be spent by the industry to reap the huge payoffs. As the old saw goes, you have to spend money to make money.


But in the real economy, where has all the optimism suddenly gone? Read… Atlanta Fed GDPNow Forecast Spirals Down in Amazing Manner

Trump hires his FIFTH Goldman Sachs exec with new Treasury hire


The White House announced the nomination of Goldman Sachs banker James Donovan for deputy Treasury secretary

Donovan will be the fifth member of the Trump administration who's worked at the Wall Street bank

The others include Treasury Secretary Steven Mnuchin, National Economic Council director Gary Cohn and Dina Habib Powell, Trump's economic assistant

President Trump's Chief Strategist Steve Bannon worked at the bank after leaving the military


What nobody from J.P. Morgan. Scandalous. Isn't it funny that there is no one from academia qualified to serve their country only those who exploit it.

"The body of economic knowledge is an essential element in the structure of human civilization; it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built. It rests with men whether they will make the proper use of the rich treasure with which this knowledge provides them or whether they will leave it unused. But if they fail to take the best advantage of it and disregard its teachings and warnings, they will not annul economics; they will stamp out society and the human race."

The Greatest Thinker You've Never Read: Ludwig von Mises

Categories: New World Order