Post-Lehman, 'Washington Is the New Wall Street'

Nation's political and financial capitals
By Wesley Oliver,  Newser Staff
Posted Sep 13, 2009 11:38 AM CDT
The nation's political and financial capitals have grown closer one year after Lehman's collapse.   (Shutter Stock)

(Newser) – For decades, more than just 228 miles separated Wall Street from Washington, as financiers cast a casual eye at government regulators. But a year after Lehman Brothers’ dramatic implosion, the nation’s financial and political capitals are forging a new, closer relationship that has some concerned, David Cho, Steven Mufson, and Tomoeh Murakami Tse write for the Washington Post. “Washington is the new Wall Street," one billionaire investor says. “No major capital transactions appear to occur without the intervention of Washington.”

While JPMorgan and Citigroup have shifted attention to DC, former regulators are in high demand among companies looking for government expertise. Washington is seizing its opportunity, not only using taxpayer funds to buy major stakes in companies, but demanding intelligence about prospective deals and executive compensation. “In the old days, Washington was refereeing from the sideline,” says one exec. Now, “not only is Washington refereeing from the field, it is also a player as well. That changes the dynamics significantly.”