The right questions to be asking about politicians and big-money finance

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Karen Tumulty over at Swampland has a question (spurred by this Washington Post article on John Edwards’ work for Fortress Investment Group) on politicians’ ties to big hedge fund and private equity money:

Is this going to be an issue as the campaign moves forward? My own business writing days ended long ago, when derivatives were still considered cutting-edge. So I’d like to ask our blogging cousin Justin Fox over at the Curious Capitalist (who has a growing cadre of fans among the readers of Swampland) for his perspective: Are these kinds of relationships getting the kind of scrutiny they deserve? And what are the right questions to be asking?

I don’t know if I really have an answer, oh growing cadre. I mean, it seems pretty clear that if you have a revolving door between big-money finance and government, that will influence the decisions government makes. We’ve pretty much always had that revolving door for Treasury secretaries; lately it seems to be opening up for ever more politicians and government officials, mainly because there’s just so danged much money sloshing around in hedge funds and private equity and Wall Street.

So yeah, it deserves more scrutiny. My problem is with which questions to ask. “Hey John Edwards, are you a tool of the hedge fund industry?” doesn’t seem like it would produce a very informative answer. Then again, maybe just the fact of asking of such questions — repeatedly — matters more than the content.

Update: I’m sure the comments thread on this will stay over on Swampland, so I thought I’d share this from one Tom T:

… don’t you see that this focus on candidates’ personal lives and finances is destroying the country? Can’t you? Isn’t it more important what he thinks about universal health care?

I have some sympathy with the sentiment: focus on policy, not petty politics. But the growing entanglement of politics and Wall Street is a really big policy question, especially when it relates to trade. Wall Street loves free trade and free financial markets, because it’s been the biggest winner in economic globalization and deregulation. I tend to generally like free trade and free markets, too, so maybe it’s a good thing that all those revolving-door types have been skewing our economic policies in favor of them. But their advice and/or their decisions are not entirely disinterested, and that seems to me to be worth talking about. Even if it briefly distracts us from John Edwards’ health-care plan.