One can easily make the case that Wall Street has more influence over the Obama administration than might be ideal, but for the real story on Wall Street’s political influence you need to look at what’s happening in Congress:
The House approved a Democratic plan on Friday to tighten federal regulation of Wall Street and banks, advancing a far-reaching Congressional response to the financial crisis that rocked the economy.
After three days of floor debate, the House voted 223 to 202 to approve the measure. It would create an agency to protect consumers from abusive lending practices, set rules for the trading of some of the sophisticated financial instruments that fueled the crisis, and take steps to reduce the threat that the failure of one or two huge banks or investment firms could topple the entire economy.
When they call this one a “Democratic plan” they’re not kidding. The climate and energy security bill got nine Republican votes. The health care bill got one Republican votes. The bill to tighten regulation of the financial sector got zero Republican votes. And it got zero Republican votes after it was already watered-down to an extent by Blue Dog objections. And yet somehow conservatives are now anti-bailout populists?
Their view, I guess, is that we should pretend we’re going to let large banks fail so there’s no need to regulate them. Then when they do fail, they get bailed out. This was the Bush/Paulson/Greenspan approach and it looks like it’s still alive and well.