If we’ve learned nothing over the past decade, we’ve learned that on Capitol Hill, Democrats and Republicans hate each other. So I suppose we should all be applauding the unanimous approval of Mary Jo White as the new head of the Securities and Exchange Commission. Apparently not one single U.S. Senator was concerned that, for the last decade, she worked to defend banks like JPMorgan Chase & Co. (NYSE:JPM), Morgan Stanley (NYSE:MS), and UBS AG (USA) (NYSE:UBS).
Maybe that doesn’t matter, and White will be completely unbiased. Even so, the number of cases she’ll have to recuse herself from seems likely to exceed the number she’ll be allowed to hear in her first year, because of the number of personal connections she still holds in the banking world.
The warm embrace of familiarity
Wall Street’s love of American politics has never been in question, and in the 2012 election, the financial sector gave over $88 million to presidential campaigns, according to the Center for Responsive Politics. The close connection the industry feels with politicians has led to what many have deemed a revolving door between Wall Street and Capitol Hill.
During the financial crisis, then Treasury Secretary Hank Paulson was reported to have held closed-door meetings with his former employer, JPMorgan Chase & Co. (NYSE:JPM). Those close ties may lead to weakness in policy and in litigation. Unfortunately, White’s nomination isn’t a breath of fresh air, but just more of the same.
Commenting on the appointment, the Investment Company Institute — a trade group for money markets, which recently tried to sue the Commodity Futures Trading Commission — applauded the appointment. Without making it a black and white issue, shouldn’t we want the people who are working on behalf of the companies that are suing the government to be more upset with these appointments? While they might have to work together, I’d be happier if the Institute had been furious.