Fed whistleblower and regulatory capture (Story in BoingBoing)

The story: Fed whistleblower secretly recorded 46 hours of regulatory capture inside Goldman Sachs

From the piece:

The Fed had vowed to reform this culture, and Segarra was supposed to be part of that mission. But once she reported for work at the Fed department at Goldman Sachs (Fed regulators actually work at desks inside the banks they’re regulating), she discovered a culture rotten with cowardice and capture, where her boss’s idea of a really stern rebuke for lying in official filings was to mildly mention that there appeared to be some irregularities in the compliance regime, then trailing off ineffectually.

We know this because of the recordings, which were edited into a documentary by This American Life that aired yesterday. It’s an absolutely riveting and essential hour of audio (MP3), and the accompanying package by Pro Publica is likewise essential reading.

Congress and/or President Obama could do something about this, not overnight, but given some prioritization. The problem of course is that they are bought as well. Some folks need to go to jail, but in any case we need electoral reform so that we can actually have a government willing to take on this sort of corruption.

The United States is an Oligarchy

A group at Princeton recently completed a study (to be published this Fall of 2014) that shows pretty definitively that over the 80’s and 90’s (the period studied), the United States government has represented wealthy interests and ignored the broader public interest.

The study is entitled Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens (see original pdf preprint), and it looks at the correlations between policy preferences of particular groups and policy outcomes. The authors looked at preferences of wealthy citizens, average citizens, wealthy/commercial organizations, and public organizations without a commercial interest. While often it appears that the federal government is acting on behalf of the people, the data and analysis strongly suggest that is only because of how often the preferences of the average citizen aligns with the preferences of the wealthy interests.

This story was covered by multiple sources back in April. Here’s an article at the BBC. It was also covered by The Young Turks, an online news network that has spent a large amount of time on the issue of corruption and money in politics:

Wolf PAC Petition Calling for a Constitutional Amendment

We have a problem of corruption here in the United States (see other posts in this section) with multiple causes and manifestations. Money in politics is one major driver, which over our history has led to greater concentration of power which has in turn made money in politics an even bigger problem. Two-party politics, public apathy, and gerrymandering all play a role as well. Many groups are attempting to address it. Several organizations are taking on the problem, including the Mayday PAC (led by Lawrence Lessig), Public Citizen, Move to Amend, Represent.Us, and Wolf PAC, among others. The following is a brief overview connecting the dots to a call for an Article V convention (made possible by the US Constitution).

Particularly in Congress/at the federal level, money has massively corrupted our government such that just about every issue you might care about is dominated by not just special interests, but moneyed corporate interests. Representatives spend more than half their time raising money rather than dealing with the issues (whether that be spending time with other reps, studying the issues, or hearing from constituents). While an increase in voter participation would be a huge help, the money will continue to flow and …

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