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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
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(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.”

The nation's political and financial capitals have grown closer one year after Lehman's collapse.
The nation's political and financial capitals have grown closer one year after Lehman's collapse.   (Shutter Stock)
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It's often said that Wall Street is no longer the financial capital, that it's Washington, D.C., and that's certainly true. I don't think this is destined to change. I think this is going to be a fact of life.
- Richard H. Clarida,
former assistant Treasury official

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COMMENTS
Showing 3 of 3 comments
dax
Sep 13, 2009 6:10 AM CDT
More like Wall Street is the new Pennsylvania Ave.---- http://industry.bnet.com/finan.../
JoeQ
Sep 13, 2009 6:01 AM CDT
Goldman Sachs and J P Morgan have revolving doors with the Fed. Whenever the feds heavily regulate any industry it always becomes a quasi-monopoly with them pulling the strings behind the scenes.
cognitivefilter
Sep 13, 2009 5:18 AM CDT
this will not end well. if washington is putting our taxes in major companies then basically the market runs our lives. we get to investing in pharmaceutical companies for the purpose of national healthcare and then al the power is still with big pharma. follow the money, it flows from the elite river of power

 
Wall Street • Citigroup • business • Washington • Lehman Brothers • JPMorgan Chase • bank regulation

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