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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

Category: Regulation
March 12, 2013 at 10:37 AM

Who is Mary Jo White?

Barack Obama, Mary Jo White

President Obama announced in January that he was nominating Mary Joe White to lead the Security and Exchange Commission. (Photo by Carolyn Kaster/AP)

If your blood pressure is already up from the story in today’s newspaper detailing how the Federal Deposit Insurance Corp., facing $92.5 billion in losses from failed banks, “has typically preferred to settle for a fraction of the losses while helping the banks avoid bad press,” better schedule an appointment with the doctor. Mary Jo White, President Obama’s selection to lead the Securities and Exchange Commission, supposed protector of shareholders and markets, is expected to be confirmed by the Senate despite “tough questions” in a hearing today.

White is a classic example of the revolving door between government and Wall Street. She was a federal prosecutor during the Clinton administration and then went to work for Debevoise & Plimpton, a prestigious New York law firm. It was instrumental in defending the Too Big to Fail Banks after they helped bring on the near collapse of the world financial system and the Great Recession, ultimately being rescued by your tax dollars. White acted as a lawyer for former Bank of America Chief Executive Ken Lewis, JPMorgan Chase, Deloitte & Touche, and former Goldman Sachs director Rajat Gupta, who was sent to prison for conspiracy and securities fraud. Other clients of the firm include Morgan Stanley, UBS, General Electric, HCA and Siemens.

The list of cases she would have to recuse herself from is potentially long. The social circle in which she has moved for a decade — and no doubt wishes to return to — is not conducive for curiosity or holding the powerful to account. Indeed, her husband, John White, is a partner at Cravath, Swaine & Moore,  another powerful Wall Street law firm representing clients facing SEC scrutiny. John White also sits on the advisory council of the Financial Accounting Standards Board, which in 2009 allowed the big banks to value their assorted hustles however they wished.

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September 29, 2011 at 9:45 AM

Occupy Wall Street vs. the banksters

For almost two weeks, protesters have been rallying in New York’s financial district under the name Occupy Wall Street. They have numbered from a couple of hundred to about a thousand, and have been peaceful despite a group being pepper sprayed by an NYPD officer. Smaller Tea Party rallies received wide media attention while this event has barely been covered by the main-stream media — but this doesn’t have the powerful corporate backing of the Tea Party.

Like the Tea Party, Occupy Wall Street is an entirely predictable outcome from the events of recent years, where the corporate evil doers, enabled by a ‘fixed’ government, got away with it while millions of Americans suffer unemployment, loss of their homes and downward economic mobility. As the economy continues to suffer, expect more unrest.

The goals are nebulous or evolving, depending on whom one talks to. Is it to protest the enormous social costs and economic damage caused by the swindles of the banksters? Or call attention to high income inequality? Call for real financial regulation? Or seed a movement that can go nationwide?

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August 23, 2011 at 10:00 AM

The White House regulatory overhaul and trade-offs

This morning, President Obama announced plans to streamline and roll back a number of regulations with the goal of saving at least $4 billion over the next five years. This is just a few days spending on our military adventures, but no matter. The move is partly political, to cover the president against criticism from conservatives, some of whom would mostly abolish the Environmental Protection Agency. And it’s Bill Clinton small-ball — who could argue with this good (small) idea — especially, the changes that would supposedly help small business.

A Small Business Administration report in 2010 stated that the cost of complying with federal regulations increased from $7,647 per employee per year in 2005 to $10,585 in 2008. They probably at least continued to grow at the same pace during the Obama years. To play devil’s advocate, I’ll also mention a 2006 study by Tufts University economist Frank Ackerman that argued:

Reports of the economic burden imposed by regulatory costs have been greatly exaggerated. The widely imagined trade-off between economic prosperity and environmental protection rests on multiply mistaken premises. Many environmental policies impose little or no net costs on the economy; even when regulatory costs appear significant, there may be no short run opportunity to exchange those costs for additional economic growth; and even when growth occurs, it may not lead to desired outcomes such as reduced mortality.

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