Why Does Wall Street Always Win?

"After a long summer of high-profile scandals – JPMorgan Chase trading, Barclays rate-fixing, HSBC money-laundering and more – the debate about the financial sector is becoming livelier.
Why has it has become so excessively dominated by relatively few very large companies? What damage can it do to the rest of us? What reasonable policy changes could bring global megabanks more nearly under control? And why is this unlikely to happen?
If any of these questions interest you – or keep you awake at night – you should take another look at the last time we had this debate at the national level, and reflect on the work of Ted Kaufman, the former Democratic senator from Delaware, who was far ahead of almost everyone in recognizing the problem and thinking about what to do.
Senator Kaufman represented Delaware in 2009 and 2010, and Jeff Connaughton – his chief of staff – has a new book that puts you in the room. In “The Payoff: Why Wall Street Always Wins,” we see Senator Kaufman as chairman of oversight hearings on the Justice Department and the F.B.I.’s pursuit of financial fraud, pushing the Securities and Exchange Commission on the dangerous rise of computerized trading and working with Senator Sherrod Brown, Democratic of Ohio, on the legislative fight to impose a hard cap on the size and debts of our largest banks. (I wrote many pieces supporting the work of Senator Kaufman at the time, including in this space, but I never worked for him.)
Mr. Kaufman was unique in ways that should give us pause. He was appointed to his seat (after Joe Biden became vice president) and immediately said he wouldn’t run in the next election. So he never had to raise any money to reach the Senate or stay there longer. His experience gives us a glimpse of what we would get if we could really remove the money from politics.
Mr. Connaughton is a fascinating witness and raconteur because he’s been through the revolving door several times: in between work in the Senate and the Clinton White House, he spent 12 years in one of Washington’s top lobbying firms. This author has really lived in and understood the Wall Street-Washington corridor. The book is partly about his education – and ultimate disappointment, most of all with the Obama administration but definitely with both parties.
The system is rotten, to be sure, but this president came to office promising change – and that is exactly what we did not get on most crucial dimensions related to the financial sector. The failure depicted on this front is political and ultimately about money – and all the power that Wall Street can buy, one way or another..."

at http://baselinescenario.com/2012/08/23/why-does-wall-street-always-win/