By Andy Ostmeyer
Globe Metro Editor
A few years ago, trying to run down perspective on some Wal-Mart controversy, I called a business professor at the University of Arkansas.
“In the interest of full disclosure,” he began, “I should tell you that I am the Alice Walton chair at the Sam Walton College of Business.”
Never mind, was my first instinct. But to be fair, this man whose department and very job were subsidized by Wal-Mart and Walton money, presented both sides of the issue.
But his opening remark helped clarify, at least to my mind, the relationship that has evolved between the business community and the rest of the world. It also may illuminate some of what has transpired of late between Wall Street and Washington.
For more than two centuries, the principles of separation of powers and enumerated powers have been controls built into the system.
Separation of power means power is divided into various government branches — executive, judicial, legislative — but beyond that, the phrase “enumerated” means only certain powers are properly the role of the federal government. Under that principle, power then is further divided among varying levels of government — state vs. federal for example.
Although divided and subdivided, all of that power still remains in the public sector, which is counterbalanced by the private sector.
Businesses, the media, academia and the churches (cult being the root of culture) all have private-sector clout, the ability to call fouls and to demand rule changes in the political-economic game. Their power is sometimes further subdivided, management vs. labor for example.
But what happens when one side in this multidimensional tug of war overwhelms?
A segment of the private sector — global corporations — today can use the tremendous wealth at its disposal to “capture” other players, public and private. Corporations buy media outlets outright (General Electric and NBC) or hire reporters for PR jobs. Strapped for money, academia turns to corporations to fund new buildings and endow chairs.
Using political contributions, corporations can manipulate and affect the election of the politicians who not only set up the framework in which they operate, but appoint people to federal and state oversight boards. One result is the revolving door that sees regulators and executives trading spots.
It’s no coincidence that Henry Paulson, the former top executive at Goldman Sachs, is secretary for the Treasury under President Bush, and that Robert Rubin, also a former top Goldman Sachs executive, was Treasury secretary under President Clinton.
That company has, since 1989, given nearly $30 million to politicians, making it fourth on the list of all-time big givers, according to the Center for Responsive Politics.
In this year’s race, Goldman Sachs has been the single biggest giver to Barack Obama’s campaign, pumping him nearly $700,000. It is fourth on John McCain’s list, having given him more than $200,000, according to the Center for Responsive Politics.
Curiously, Citigroup is second on McCain’s list while it is third on Obama’s. And who heads up Citigroup? None other than Rubin, that former vice chairman and co-chief operating officer of Goldman Sachs who went to work for Clinton.
It gets thicker.
Rubin served along with a co-chairman and co-senior partner at Goldman Sachs named Stephen Friedman, formerly of the current president’s National Economic Council.
He’s not to be confused with Kenneth Brody, who, after 20 years at Goldman Sachs, was named by former President Clinton to head up the Export-Import Bank of the United States.
Then there’s Josh Bolton.
The current White House chief of staff is the former executive director for Legal and Government Affairs for — guess who? — Goldman Sachs.
That $700 billion bailout, then, begins to look more and more like a spectacular return on a $30 million investment.
Our system of checks and balances has given way to one with more checks than balance.
Address correspondence to Andy Ostmeyer, c/o The Joplin Globe, P.O. Box 7, Joplin, Mo. 64802 or e-mail aostmeyer@joplinglobe.com.
