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Matt Stoller: Naked Capitalism – Your Anti-Lobbyist

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By Matt Stoller, the former Senior Policy Advisor to Rep. Alan Grayson and a fellow at the Roosevelt Institute. You can reach him at stoller (at) gmail.com or follow him on Twitter at @matthewstoller.

If you’ve ever spend time physically going to and from Capitol Hill on the subway or the buses, it’s pretty hard not to notice the advertising. This isn’t standard advertising, for soap or consumer products, it’s advertising for corporate lobbying. Boeing splays posters all over Capitol South about their job creating efforts, JP Morgan for American innovation, and the American Association for I Just Set Up This Coalition to Push Corrupt Products for whatever the lobbyists have dreamt up that day.

The Hill trade publications have these same ads; in fact you can pretty much tell what is being fought over in Congress by the ad campaigns. Lobbyists take a slice of their budget, put it into ads, and thereby ensure that all information channels into policy-makers are owned by industry-friendly sources. Journalists on the Hill often go back and forth between staff jobs, think tanks, and lobby shops. This has traditionally formed a high wall around policy-making. With traditional tools of lobbying, campaign finance, and private think tanks replacing government expertise, the wall has traditionally been impenetrable. Staffers on the Hill literally have the Financial Services Roundtable and/or Mortgage Bankers Association put on “financial services university”, a multi-day training on how the financial system works.

The problem isn’t that they do this, it’s that there were almost no other structured ways to learn about finance if you were outside the industry. If you needed to learn about credit default swaps, it seemed no one could give you credible information except financial services lobbyists. In 2008, no one could tell you what was going on, except Treasury and the Fed. This monopoly of information allowed for enormous corruption in decision-making, as Congress was steam-rolled into approving TARP despite enormous skepticism among rank-and-file members.

But something odd happened in 2008, during and in the wake of the crisis. Capitol Hill staffers and members of both parties began looking for expertise on how finance actually worked. And they began reading financial blogs. Lobbyists just didn’t or couldn’t help them understand how to deal with the massive systemic failures; they knew in some sense that the information they were getting was rigged. They just didn’t know how. The financial blogs began to tell them.

Over the course of the next few years, the financial blogs became a new alternative system which delivered one of the most valuable commodities that previously had been monopolized by financial lobbyists and institutions like the Fed – credible information. That’s why there was an actual debate during Dodd-Frank over reining in the size of banking institutions, and auditing the Fed. Instead of second order industry shills distributing information they have been fed by the PR departments of big banks, communities of end-users of finance began to talk directly to lawmakers through mediated forums on the internet.

Naked Capitalism is at the heart of this new financial blogosphere. Yves builds her arguments meticulously, with the help of a community that is actually engaged in the system being reformed or challenged. Together, you and Yves challenges the witch doctors of finance, the economists in the Fed, at Treasury, in the housing finance industry. This site has seen the propagation of the chain of title theory on mortgage origination, and there have been multiple hearings on the Hill on the housing finance situation because of the work Yves and you have done. These are literally trillion dollar questions being influenced by this community.

Many people give to politicians, or charities, or foundations. They do so because they believe doing so will create leverage for change. And they are right. It’s why the big banks buy up every economists they can, why it’s nearly impossible to find experts who are untainted by the corruption in the system. Yves isn’t part of that, you aren’t part of that, and Naked Capitalism isn’t part of that. This forum stands apart in the integrity and value it brings to the debate. I pushed Yves to ask you for donations, because I know how much you want this site to influence the debate, to grow, and thrive. So far, there have been hundreds of us that have given to show that. I can guarantee there is no higher leverage investment than Naked Capitalism in terms of making a better society.

The truth is, you can get lies for free. Wall Street is only too happy to buy advertising, to make sure you hear from their well-credentialled experts. If you are not paying for your media, though, then they are. And you aren’t the customer, you are the product being sold. While this arrangement works, what it means is that you’ll get lies for free. And this is a very expensive proposition. So I hope that you’ll consider, if you haven’t already, putting some dollars towards the Naked Capitalism fundraiser. If you can’t afford much, give only a few bucks. If you can afford more, give more. If you can afford to give a lot, give a lot. It will pay for itself, I guarantee you. This isn’t just giving, it’s a statement that you are want a different debate, a different society, and a different culture. It’s about saying you are tired of the lies you are being fed for free, and are willing to put your valuable resources into reshaping how information in our society flows. It will help policy-makers understand that if they make good decisions, they have allies, and if they don’t, they have enemies.

Naked Capitalism is a very powerful leverage point. Yves and the Naked Capitalism community are relentless, day in and day out. That’s how policy-makers operate, relentlessly, day in and day out. If you’re there, as they make decisions, they will have no choice but to listen. They may not do what you want, but they will at least by forced to hear that there is an alternative. And that, my friends, is power.

Join us.

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27 comments

  1. Flying Kiwi

    Matt the phrase is “reining in”, being an allusion to the use of a horse’ reins to control a bolting or unruly animal.

  2. LucyLulu

    Thanks, Matt. I didn’t realize this blog was having an influence on our legislators. How cool! It IS a great source of unbiased information, and Yves DOES do a fabulous job with it. She’s a veritable wealth of information and brilliant to boot. Praise the Lord for the Internet and Yves.

    Until a couple years ago when I first started delving into the mortgage crisis, I never realized just how biased the mainstream media is. A few months later I started reading some blogs and found out they were even more biased about which stories they printed than I first realized. Too bad it took me so long to find this blog, not that aren’t other good ones, too. Just look at the stories that have been printed on OWS for evidence of bias. Few have any semblance of accuracy. Investigative journalism seems to be extinct among mainstream media. I never would have dreamed I’d consider Rolling Stone a serious source if somebody asked 20 years ago, but Matt Taibbi has done some of the very best work on the financial crisis. I used to think the NYTimes was the ultimate. Hah! I traded in my subscription to support Yves instead.

    1. Christophe

      There is an amazing justice in trading in your NYT subscription to support NC. The Times developed its market by selling the rare commodity of journalistic integrity to its customers. Now it sells the all-too-common commodity of journalistic bias to its advertisers. Since you are no longer the customer, but the audience to be manipulated, why on earth should you pay for it? Lies are free.

      Yves, on the other hand is providing the exceptionally rare combination of seasoned expertise and intelligent analysis, without even charging for it. She is doing a much better job than the Times of serving our needs, so she certainly deserves more of our money for that service.

    1. Amateur Socialist

      I used my credit union’s online bill payer system to set up a series of monthly subscription donations. Took 2 minutes, no pay pal involved.

  3. Middle Seaman

    Matt is preach to the choir. Those of us who have been here a long time know the the great value and the immense effort that it takes. (I neglect to mention the huge talent.)

    Sadly, we have to admit that the impact NC has on reforming the foreclosure industry, for instance, is less than what we want.

    NC is one soldier in a small army fighting a huge oligarchy made up of WS, the two main political parties and most of the media. But realism is not despair.

    1. Matt Stoller

      Housing finance is a ten trillion dollar industry. It’s not easy to influence, but even a small influence is quite meaningful.

  4. Ummm

    “The truth is, you can get lies for free.” Within which a lot is said, Gresham’s Law re-stated for the modern world.

  5. psychohistorian

    Thanks for the posting.

    Yves and her contributors truly are lights shining in the darkness.

    May their efforts help turn our darkness into light.

  6. tiger

    When i first open this page in the morning and read the first article, the links to the most recent 5 articles on top of the page all become gray, even though i didn’t click on them yet, and i can’t read what they say. So 2 issues (i) unread links being displayed as read (ii) the color representing read links is too light

    Just saying… :)

    1. Valissa

      That happened to me too when I first upgraded to IE9. But just to the left of the screen refresh button (on my laptop that’s in the address/URL bar) is a button called Compatibility View (looks like a tiny graph) and if you click on that your problem should be solved.

  7. Economic Maverick

    Great post Matt. After Yves, you’re my second favorite poster on this blog, though every single guest poster is fantastic

    I already mailed a check. I didn’t want to give paypal or the credit card company any pleasure of collecting a transaction fee from this contribution.

    Thanks for pushing Yves to ask for donations! Perhaps out of modesty she underestimates how critical she and NC is at the current moment. I too think there is a HUGE thirst for what NC brings to the table. I would implore you all to take this thing to the next level, 10 times over, and scale this thing to the moon. No doubt there will be sacrifice involved, but the WORLD NEEDS YOU right now! We need Yves and her cadre to be on every forum, media show, teach in, civic meetings, conferences, all the time providing a fresh, highly well-informed, non-corrupted perspective.

    You may be surprised by the level of support you get from the community for something like this. Do what you have to do, just make this thing happen. I know i’d personally be willing to sacrifice to help make this happen, and I’m sure many others here would do the same.

    1. aletheia33

      (i’m posting this comment also in the matt stoller piece comments of today, following the similar holler from Economic Maverick there)

      along these lines, here’s an idea, something we at nc could do right from our armchairs:

      starting with the question: can the mass foreclosure/securitization abuses/fraud be explained simply (inspired in part by the people’s mic form of presentation)?

      how about we put together a one-page crib sheet/pr (talking points) flyer that occupiers (and others) can use to fight the deadbeat borrower meme, starting perhaps at their foreclosure occupations at people’s homes? occupiers and others could hand out this flyer to members of the media, supportive neighbors, and other supporters who show up at these events.

      a paper flyer may sound primitive, but it could have the virtue of simplicity. could hand-to-hand distribution at foreclosure points in neighborhoods be an effective way to reach people who are spending all their evenings, exhausted from their vampire jobs, isolated in front of fox tv? and wouldn’t such a flyer come in handy for many other audiences/venues? (like the u.s. congress, apparently they don’t have this information either.)

      the flyer could include a link to an online webpage that people could use for mass printing and forwarding of the flyer via the internet.

      this could be especially effective if done in a humorous way, or at least with some humorous effects–maybe even using graphics or some dramatic elements. (that might be too far afield from straight talking points–maybe would have to be a second project)

      yves and perhaps other members of her band of experts could preview, participate, and give final approval, to the extent they are able and needed, to make sure everything in the flyer is accurate and to the point.

      pieces have been written by experts refuting the deadbeat borrower meme; they could serve as a starting point. the challenge is to boil the material down to 1 page of simple points.

      a good way to proceed might be for an expert to volunteer take a stab at framing a first draft in the form of a people’s mic presentation. if someone has already done this as part of an occupation activity, then we have a first draft right there, if we can track it down.

      i cannot volunteer to put this together from scratch, but i am a professional editor (which may surprise readers of my comments), and i would be willing to dig in to the editing of such a document for clarity and correctness of language. (and would be happy to turn this task over to anyone else who’d like to have it–not seeking any kind of control.)

      i’m ready to collaborate on this with any interested nc persons.

        1. Economic Maverick

          I think ideas like this are EXACTLY how NC needs to expand and fully leverage/exploit its community as well as the great thinkers who post!

          I’m not an expert on the foreclosure stuff, but i’d be willing to learn or contribute. Imagine if we created an army of ground troops that could take the NC crib sheets, graphs, picture, illustrations, and than spread it in our own communities, both offline and online, on our own blogs, or writing op-eds to our local papers, etc etc.

          This could turn into an “open source” think tank, or call it “the people’s think tank”, or “social think tank” because it uses horizontal power/managerial principles to bring bold and fresh ideas to the public. A genuine alternative center of expertise on the financial/economic system.

          There is SO MUCH potential for this! Perhaps i’m projecting my own hopes, but I believe this community has some of the brightest minds around, and Yves is our modern Percora – totally relentless truth seeker, armed with analytical brilliance!

  8. Spacecabooie

    This statement bothers me, for some reason :

    “If you needed to learn about credit default swaps, it seemed no one could give you credible information except financial services lobbyists.”

    I am all for government sponsored development projects; no TP here … a frame of mind much the same as the workers of a represented industry as opposed to the sharecroppers and carpetbaggers, err … shareholders, executives, etc. who are represented by management and attorney flunkies, not the true industry experts.

    But I think the reason on needs to buddy up to financial services lobbyists for education is that the sense of power that comes with working, in whatever capacity, in D.C., corrupts the minds of even the least powerful, by convincing one that the advice given to regular folks to “never stop learning” does not apply to them.

    Why can one only learn in seminars where lunch, boobie prizes, and other influences are provided (much as the treats that are provided by the salesperson class in industry, medicine, used car salesmen, etc. … so what does that say about what goes on in Financial Services Industry seminars) ?

    I would submit that these days this is because the ruling and lobbyist classes generally have only money as motivation for anything they do – if this were not the case these folks would not have found themselves being politicians, lobbyists, or journalists. If they had been motivated by the fundamentals underlying the industry they presume to represent then in general they should have been able to learn those fundamentals, but either through lack of intelligence or motivation elected to take the easier, and more lucrative route.

    To learn about Financial Services, just go purchase the series of books written by Moorad Choudry and sit down in private where its quiet with your own tea and cookies and study the fundamentals. The volume of power point words used to teach financial services in the most thorough seminar would comprise less than 1/10 of a percent of the volume of words comprising these books.

    1. Yves Smith Post author

      Each Representative has a grand total of one staffer. He is supposed to cover everything that his boss in interested in (which means more emphasis on stuff related to committees he is on). They don’t have the bandwidth to go off for days and study the entire financial services industry. And you have to start from a lower baseline for people who don’t know about finance and economics, and pols don’t.

      1. HTML Reader

        “Each Representative has a grand total of one staffer.”

        Do you have a source for this assertion? When speaking about this problem last summer, Darcy Burner said* that each Rep. had several (18, but effectively, “4 1/2″), but that it was a small number, that they were low-paid, and that they were young and inexperienced. In either case (one or several), it is still a “problem” that appears to be self-inflicted by the Congress, and which ought to be easily fixed if they wanted lobbyists to have less influence.

        * http://www.netrootsnation.org/node/1948 (around the 10-minute mark in her presentation)

        1. Yves Smith Post author

          Sorry, I meant those working on policy, not doing what amounts to executive secretary/paralegal level tasks. I should have made that clear.

      2. Mark S.

        “Each Representative has a grand total of one staffer.”

        That’s flat-out not true, Yves. Each House member has around 9-10 staffers in their DC offices alone (and more in their district offices). And most House members have 4 full-time legislative staffers — a Legislative Director and 3 Legislative Assistants, and the four of them divide the different policy areas between them. This is all public information — Legistorm.com has been listing the staff information, including salaries and job titles, for every House and Senate office for years.

        For as much as you comment on politics, and confidently declare that different members of Congress are fundamentally corrupt, I would have thought that you’d have at least a minimal understanding of Capitol Hill.

  9. rotter

    I appreciate this blog and the need to support it. I have budgeted a donation, slightly more than i could afford, and The money has been sent.

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