When banks were actually making money, they weren’t tossing it around just for their own compensation.
Bank execs also happily lined the pockets of senators involved with banking legislation. Surprise, surprise.
Forbes put together a ranking of senators who received by the highest share of their campaign contributions from the finance, insurance, and real estate industries between 2003 and 2008.
Not surprisingly, Sen. Chris Dodd (D-Conn.), chairman of the Banking, Housing and Urban Affairs Committee, comes in first. And the committee’s ranking Republican, Richard Shelby of Alabama, places second.
Here are the top five, with the share of their donations received from the finance industry and the total dollar amount of those donations:
• Chris Dodd (D-Conn.): 35.7 percent, $9.1 million.
• Richard Shelby (R-Ala.): 33.4 percent, $2.5 million.
• Charles Shumer (D-N.Y.): 32.8 percent, $3.3 million.
• Tom Carper (D-Del.): 32.5 percent, $1.5 million.
• Mike Crapo (R-Idaho): 32.2 percent $947,000
Simon Johnson, former chief economist of the International Monetary Fund, points out that this situation resembles what often happens in an emerging-market economy: simple cronyism.
“The financial sector boom that happened in the United States and in other countries had this characteristic very much like an emerging market boom,” he said in a recent speech.
“At first it makes sense. You have some efficiency gains, you’re generating sensible profits,” he says.
“Then the sector gets more politically powerful. It’s able to take control of its own regulatory destiny. And it does that in a way that feeds into further concentration of political power.”
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