Those financial institutions which spent more on lobbying in the US issued more dodgy mortgages and required more help after the crash.
Now that is a surprise: when a sector is regulated then those being regulated will spend money on politicians to try and amend that regulation. And it\’ll be the dodgier characters that struggle the most to amend the regulations their way.
Of course, our two intellectual heavyweights think that this should lead to more regulation: not noting that this will of course mean more lobbying. And no, you cannot ban lobbying, not in the US. It\’s a constitutional right to be able to petition the lawmakers……as of course it should be.
However, there\’s also one interesting detail that all three, yes including the IMF, have managed to entirely overlook.
Who were the largest financial sector lobbyists? Who spent, by far and away, the most on attempting to bend the law to their will?
Fannie Mae and Freddie Mac spent $7.4 million on lobbying in the first six months this year — $2.9 million by Fannie Mae and $4.5 million by Freddie Mac. Their $174 million in combined lobbying expenses since 1998 put the two companies just behind the U.S. Chamber of Commerce and the American Medical Association and ahead of General Electric Co., according to the Center for Responsive Politics, a nonpartisan Washington-based group that tracks money in politics.
You mean that the Government Sponsored Enterprises, the ones that went bust with such a resounding smash, are the ones that lobbied most for changes in legislation? (Note that this lobbying expenditure was an order of magnitude larger than that by Countrywide, a company that the IMF report tuts at.)
You mean that it was at the nexus, the collusion point, between government and finance that the real problem occured? You mean that the structures entirely dependent upon the politician\’s will shoveled the most money to the politicians?
Colour me unsurprised quite frankly.
Also colour me unsurprised that neither Ritchie nor the TUC see fit to mention this point: and the IMF are very naughty boys indeed for not making it clear whether they have included the GSEs in their calculations or not (and lord alone knows what the figures would be if we included Sallie Mae and the rest of the alphabet soup).