“All political activities — including all lobbying — will be halted immediately.”
-Federal Housing Finance Agency Director James Lockhart (Bloomberg)
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Here is a factoid you may not have been aware of. It explains a lot of things about the political philosophy, crisis resolution, and approach to regulation in Washington D.C. It also explains to a large degree why the final version of the Dodd-Frank bill looks the way it does, and goes so relatively easy on the institutions at the core of the crisis.
The conclusions are not pretty. Indeed, its downright fugly.
Let’s start with the FACTS, something Washington D.C. seems to be allergic to:
When the GSEs were put into conservatorship by Hank Paulson, several steps were immediately effected: The CEOs and much of the senior management were fired. One of the very next steps put into place was a total ban on all political activities, including — most especially — lobbying. Common stockholders were placed last in line for any claims, with preferred shareholders right behind them.
Compare that to the rescues of Citigroup, Bank of America, Merrill Lynch, and the rest of the bankers wrecking crew. The vast majority of senior management and board members who created and oversaw their own implosions are still in place. A report on Corporate Governance by Professor Emma Coleman Jordan of the Georgetown University Law found that 92% of senior bank execs were still working in their same jobs.
http://www.ritholtz.com/blog/2011/01/fnmfre-banned-from-lobbying-not-cbacjpmmergsms/That's a good question
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