I’m writing this on a really hot, clammy day in New York. So, forgive me if I’m a little bit steamed.
Recently, political journalist Matt Taibbi sounded an alarm that should have sparked a national debate about the conduct of ex-Attorney General Eric Holder. The story was crowded out by the furore over Donald Trump, and the fuss about the crowded field of Republican Presidential candidates. Once again, personalities trumped real matters of importance.
While in office, Holder, the nation’s top law enforcement official for six years, was repeatedly criticized for failing to send a single senior banking boss to jail for playing a role in the mortgage fiasco that led to the 2008 financial crisis.
Taibbi calls him a Wall Street “double agent” for returning to his lucrative partnership at a powerful law firm, known for defending financial firms. At the very least, Holder’s actions raise questions about the cozy relationships between top officials and the industries they are supposed to regulate.
His case is far from the only one. This widespread practice by the Beltway’s power players has a profound impact on the system of corporate subsidies, tax breaks, and other ways that special interests benefit from their ties to Congress and the Administration.
“The revolving door phenomenon is particularly acute in the financial services sector,” writes Craig Holman of he liberal group Public Citizen. “Statistics published by the Federal Reserve Bank of New York show a dramatic rise in the movement of financial executives into positions as financial regulators, and regulators into private sector financial firms, growing threefold over the last decade.”
Liberals aren’t the only ones to call for action. In this week’s episode of our How Do We Fix It? podcast, University of Tennessee Law Professor Glenn Reynolds, a well-known libertarian conservative blogger on Instapundit, calls for a surtax on top or regular earnings of at least 50% on pay hikes received by former senior government officials when they go back to the private sector.
“There are all kinds of laws to limit influence peddling and they’ve all been failures,” Reynolds told us. Powerful interests are willing to pay large amounts of money to former cabinet members and top officials for what they know. “It seems only fair for the government to share in those profits.”
The revolving door, where Washington D.C. “Fat Cats” jump back-and-forth from powerful government positions to highly-paid lobbying and industry jobs, is a “corrupting influence,” says Reynolds. He sees the tax code as the most powerful instrument to reduce this corrosive threat to our democracy.
His proposal may not go anywhere, but Glenn Reynolds, Matt Taibbi, Elizabeth Warren and others who’ve called to laws to slow down the “automatic door” deserve far more attention than they’ve received so far.