Another Example of Corporatocracy-Government Axis Corruption

[TampaYankee]

Hedge-Fund Titans Got Inside Political Tips

By Jonathan Chait

I’m surprised this Wall Street Journal story, detailing how hedge funds manage to obtain profitable inside information, hasn’t gotten more attention today. The whole story seems pretty explosive. I’d like to pull out a bit at the end, about how some hedge-fund players learned that key Democratic moderates in the Senate would jettison the public option in the health care bill in 2009:

The weekend before the Dec. 8, 2009 session, Senate Majority Leader Harry Reid (D., Nev.) held Senate sessions on Saturday and Sunday, seeking a deal. Another senator, Tom Carper (D., Del.), also was trying to help. The central issue: Would the bill call for the government to create a public health insurance plan, the position supported by President Barack Obama?

To counter Republican opposition, Democrats needed votes from Messrs. Lieberman and Nelson, who said they had major concerns with a robust government-insurance plan. As negotiations neared a resolution, JNK Securities and its hedge-fund clients met a half-dozen lawmakers in the U.S. Capitol. Among those who spoke to the hedge funds were Mr. Lieberman and Mr. Carper on Dec. 8, according to their offices. The roster included Viking Global's Scott Zinober and Karsch Capital's Eric Potoker.

The broad outlines of an agreement had been circulating for days, but the lawmakers confirmed they were close to a deal that discarded the public insurance plan, a boost to private insurers. Viking, a hedge fund that manages $13.8 billion, bought six million shares of Aetna in that fourth quarter of 2009, according to regulatory filings. Karsch, which manages $2.4 billion, bought half a million Aetna shares during the same period, according to regulatory records. Shares of Aetna rose 14% in the fourth quarter.

There was always a slightly puzzling dynamic at work in the fight over the public option. It polled extremely well, but key Democrats in the Senate opposed it. Now, you could envision a justification for Democrats from red states opposing the measure on political grounds – even if the measure itself was popular, perhaps they saw more value in breaking from the liberal wing and demonstrating “moderation,” regardless of the specifics of the issue. But then you had, among the public option skeptics, blue state Democrats like Lieberman and Carper. It’s … interesting to learn that they were meeting with hedge-fund executives and telling them about their efforts to subvert the public option.

There’s a broader problem here for the liberal economic agenda. Democrats live in a milieu that is far richer, and more attuned to the needs of business, than their broader constituencies. Republicans in Congress basically never need to pay attention to labor unions or poverty advocates. But Democrats in Congress are surrounded by rich people, and are usually rich themselves. Even putting aside their need for campaign donations, Democrats have a social support network that strongly incentivizes them to adopt “moderate” pro-business stances. Even if absolutely nothing untoward occurred between the hedge funds and the senators, the corruption inherent in the relationship is profound.

See the original article at:

http://nymag.com/daily/intel/2011/12/hedge-fund-titans-got-inside-political-tips.html

[TampaYankee]

In this respect, GOP or Dem doesn't matter. Both parties are in the pocket of Big Money. With GOP it is a matter of party policy. With Dems it's a matter of individual personal failures for some, political exigency for many others, maybe a majority of, office holders. Money in politics provides motivation for individual members to 'go with the flow'. I don't like any of it.

Support these constitutional ammendment efforts to get big money out of politics -- business and unions alike.

[lookin]

TY, you certainly have a big one by the tail. I don't think the full story of Washington/Wall Sreet 'collaberation' is out there yet, but the snippets that do make it over the wall give me the heebie-jeebies.

I used to think of my government as the thing that kept the corporations somewhat at bay. I still think that's true to some extent, as the Dodd-Frank Act seemed to have a few teeth and the health-care reform act has already done some good and will do more. But the way that business joins hands with government when legislation is getting crafted seems almost impossible for ordinary citizens to replicate.

The 60 Minutes interview with Jack Abramoff was no cause for comfort. It seems that these legislative clerks who actually write much of the legislation that gets signed into law are very likely going to go to work for the companies or lobbying firms that help them write it. How is an ordinary citizen going to get represented in that process?

Well, the answer would have to be by electing representatives who know how to look through all of that stuff and retain a commitment to represent their constituents. They're definitely out there and they may even be in the majority.

But not for long if these systemic abuses keep piling up.

It does show the importance of having a President who represents the people directly. I'd be surprised if much banking reform would have got done without Obama and astounded if universal health care would have. Even he couldn't get a clean public option in the legislation, although I wonder if the 'insurance exchanges' might morph into that.

Thanks very much for bringing this topic forward.

[Guest hitoallusa]

Usually the children of corrupted politicians and businessmen pay for their parents' sin. I always wonder when these corrupt politicians, who light up their house with Christmas lights and giving out expensive gifts with money they either stole or commandeered, are actually happy. Most of them seem miserable so they have to go luxury hotels and abuse poor employees there to feel like they are something when they are nothing. They spoil their children with those corrupted money and their children usually fall and pay the price. Eventually it leads to the fall of society and a new society will replace it.