Just as Congress enters the final stretch of the financial regulatory reform effort, one of the Treasury Department's leading liaisons to the Hill, Damon Munchus, is bailing out to go work for a financial services lobbying and consulting firm.
Munchus was one of Treasury's chief negotiators with the House Financial Services Committee.
Cypress is a five-year-old firm that specializes in telling banks and other investors what Treasury is up to and how they can best use that information to cash in. At the same time, a Cypress division is registered as a lobbyist on bank issues -- a kind of dual role that leaves it simultaneously telling clients how to exploit Treasury regulations and market-interventions, while lobbying for or against those regulations and interventions. It also does its own investing.
Munchus worked in the Office of Legislative Affairs, which deals directly with the Hill. His position as Deputy Assistant Secretary for Banking and Finance gave him intimate knowledge not just of the process but of key lawmakers -- what they privately support what they secretly need; what they detest; and what makes them tick.
That's invaluable information to investors. Munchus couldn't be reached for comment.
In case you still wonder why the government is always so flat-footted and outmaneuvered on important reform legislation, this should clue you in:
The ability of Wall Street to lure staffers into high-paying lobbying and consulting jobs has a corrosive effect on the legislative process, as staffers start doing the banks' bidding even before a payday, in the hopes of getting one someday. Moves like Munchus's only increase that incentive.
"You've got to wonder how much of a fight administration lobbyists are putting up against people they see as their future employers," Miller said.[...]
With the acquisition of Munchus, Cypress can now boast to employ high-level officials from four straight Treasury Secretaries.
There are a lot of factors that led to our dysfunctional system but this is the central one that touches all the others. The Village is a company town, and I don't mean the government, I mean Big Business and Wall Street. It's incestuous, corrupt and perhaps worst of all, completely inefficient and ineffectual, even for The Company. After all, Uncle Alan Greenspan eventually had to admit that these Mini Galts are incapable of even properly acting in their own self-interest by keeping American businesses competitive and the financial system working.
Instead they are operating like a tank full of piranhas rushing about furiously gobbling up everything in sight with no thought to whether or not there will be anything left tomorrow. That's fine for fish, but humans are supposed to be a little bit more evolved.
And this is only part of her post. It's not only Democrats that indulge in this behavior, It's whoever is in power. They are thick as thieves. And yet, health care for Americans has awakened the Village deficit hawks.