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Headlines that say it all: "Goldman exec named first COO of SEC enforcement"


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Meet the newest Commodity Futures Trading Commission Commissioner:

If you've been reading Mother Jones recently, then you already know quite a bit about Scott O'Malia. Like the fact that he once worked as a top in-house lobbyist for an energy company, Mirant, that manipulated California's market Enron-style. Or that, while on this company's payroll, he lobbied against a bill to expand the CFTC's authority to police derivatives. [...]During his recent confirmation hearing, O'Malia expressed his commitment to bolstering oversight and said he would work to "ensure the CFTC uses all of its legal authorities to curb excessing speculation and prevent abusive trading practices, including fraud and manipulation." Given his track record, there's reason to be dubious.

Submitted by lambert on

I believe it was the FT's Willem Buiter who originated that phrase (2008-05-28). Showing once again, as if it still needed to be shown, that you can often learn more from a smart and principled small-c conservative who knows their stuff than from the typical wannabe Democratic strategerist, even if they're on "your side.")

danps's picture
Submitted by danps on

It's not even a year and a half old. Feels like longer. The phenomenon it describes, of course, has been around forever.

Submitted by lambert on

But I would say that the complete identification of regulators with regulated -- which is not the same as corruption, being both cheaper and more effective -- is relatively recent. I could be wrong, maybe it's a periodic thing. But it seems to me to be like a spot of mildew vs. mildew destroying an entire garden.

danps's picture
Submitted by danps on

general corruption. Used to be there was no SEC, corruption flourished. SEC created, corruption somewhat restrained but chafing. CRC implemented, corruption flourishes again. The idea of finding a way to neutralize the SEC is new, as you point out. The idea of turning a regulatory agency into a client of those it is ostensibly regulating is not. James Watt at EPA springs to mind as an example from a previous generation.

Submitted by lambert on

... the regulators don't even think -- can't even think -- of themselves as corrupt or even captured.

It goes to the level of doublethink required. I see Watt as a more straightforward case, if you see what I mean. Maybe I'm not cynical enough.

Submitted by lambert on

Like "excessing" [sic] speculation, as opposed to speculation. Or "abusive" trading practices. There are plenty of well-respected figures (Soros, for example) who don't believe that derivatives should be traded at all. So it's not just "practices."

DCblogger's picture
Submitted by DCblogger on

this goes a long way to confirm my view that the country club wing of the Republican party has taken over the Democratic party.

Submitted by hipparchia on

that he wouldn't staff his administration with lobbyists....

okanogen's picture
Submitted by okanogen on

"In addition, SEC Chairman Mary Schapiro ended a policy requiring agency enforcement attorneys to get approval from the SEC commissioners before negotiating fines and penalties with companies accused of violations."

In other words: "let's settle this quietly. Over lunch perhaps? Michael's?"

Submitted by Randall Kohn on

The linked article, bylined Michael Wolff, ends like this:

As soon as you’re seated, you start assessing who you see (if your lunch date hasn’t yet arrived, you call someone on your cell to report who’s there). Every conversation I’ve had at Michael’s is very analytic, very smart, very precise about who is falling from what height and how fast -- about what forces are about to take what person apart.

It’s all deconstruction.

Which is why lunch is so satisfying.

Hey Mikey, you don't mind if I deconstruct you, do ya? Here goes:

Michael Wolff is a vacuous snob and an all-around worthless piece of shit.

That was satisfying too, and I ate my lunch while typing it.

ElizabethF's picture
Submitted by ElizabethF on

That makes me uncomfortable but it could be that I am a couple of decades older.