Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Obama's Banking Buddies

| Mon Dec. 21, 2009 8:00 AM EST

For all the furor over Matt Taibbi's Rolling Stone story on Obama's economic team, you couldn't argue with the basic thesis put forward: At the very least, Obama has surrounded himself with powerful Wall Street-centric thinkers and bankers and leaders who dictate his Wall Street-friendly economic agenda. Instead of using the financial meltdown to implement radical and necessary changes, Taibbi writes, "What he did instead was ship even his most marginally progressive campaign advisers off to various bureaucratic Siberias, while packing the key economic positions in his White House with the very people who caused the crisis in the first place." In May, Simon Johnson described this very revolving door between Washington and Wall Street in a more articulate and less, well, Taibbian piece for The Atlantic; Johnson called Wall Street's takeover "the Quiet Coup."

In our hard-hitting Wall Street package in the new January/February issue of Mother Jones, I put some names on that image of the Washington-Wall Street revolving door. As you'll see, these aren't all midlevel, pencil-pushing bureaucrats. Some of the Wall Street alums now in Obama's upper ranks include:

  • Treasury Secretary Tim Geithner's deputy and his chief of staff;
  • Obama's own chief of staff and chief economic adviser;
  • the head of TARP;
  • and the managing executive of the SEC's enforcement division.

Talk about the fox guarding the henhouse. Check out the list of names here, and be sure to check out all of our financial stories as they come out.

Midwestern Pastoral

| Fri Dec. 18, 2009 4:05 PM EST

What is the Midwest? Where does it start and where does it end? Who lives there? Despite having lived in the Midwest most of my 23 years—albeit in Michigan, which can get away with the "Mid-" but scarcely the "-west"—I've struggled to answer those basic questions about a place I thought I knew quite well. I've asked fellow Midwesterners, but they offer little clarity: The Midwest starts, traveling westward, in Ohio and ends in Kansas, they say, or picks up in West Virginia (Appalachian country to me) and ends in Utah (Utah?!). That the Midwest is manufacturing country, where people make and build things the rest of the US needs (though nowadays that could define China as well). That in the Midwest, and in Kansas in particular, one friend told me, people spoke the clearest, truest form of American english, a claim I've yet to fully understand but nonetheless made me feel proud of where I came from.

For a much more eloquent depiction of my beloved Midwest, I defer to photographer Lara Shipley, based in Missouri. Andrew Sullivan's Daily Dish, over at The Atlantic, features a series of her photos on the Midwest, and as a completely unbiased Midwesterner, I highly recommend them to all. They remind of Robert Frank's The Americans, but set entirely in the American Midwest. The photos posted, with a mini-essay by Conor Friedersdorf,  are especially evocative of the region's economic decay, as manufacturing jobs have been wiped out and unemployment far exceeds the national average in parts of states like Michigan and Ohio. (For another great photo essay on the Midwest, be sure to check out Mother Jones' "End of the Line," a great photo essay by photographer Danny Wilcox Frazier and writer Charlie LeDuff from our Sept/Oct 2009 issue.)

Shipley's Midwest photos are quiet and eclectic, gritty and darkly funny. They're more than worth ten minutes of your time.

Glass-Steagall Resurrected?

| Thu Dec. 17, 2009 1:29 PM EST

Is the Glass-Steagall Act, the Depression-era law that blocked commercial banks from participating in riskier investment banking, set for a revival? That's what a new piece of legislation, introduced yesterday by Senators Maria Cantwell (D-Wash.) and John McCain (R-Ariz.), would do, forcing major changes to financial titans like JPMorgan Chase, Citigroup, and Bank of America. 

But first, here's McCain on the new legislation on CNBC:

Reestablishing the firewall between commercial and investment banking poses a dilemma for banks such as JPMorgan Chase, which snapped up Bear Stearns' trading operations earlier this year, and massive Citigroup, which includes more staid consumer banking branches as well as riskier trading operations. The already controversial, shotgun-wedded Bank of America and Merrill Lynch relationship wouldn't survive if Glass-Steagall was revived, either. And you can throw Goldman Sachs and Wells Fargo into that mix, too. The McCain-Cantwell legislation would give such institutions a year to break up their different banking arms.

The Depression-era law, you'll remember, was abolished in 1999 by the Gramm-Leach-Bliley Act, one of the most significant pieces of deregulatory legislation in the past few decades, paving the way for the emergence of financial behemoths like Wells Fargo, JPMorgan Chase, and Citigroup (though Citi received somewhat of an exemption to grow even before 1999). It's a long shot at this point, but bringing Glass-Steagall back would be a watershed moment for financial regulation and major step toward scaling back the excesses and ridiculous risk-taking of the past decade or so. At the very least it would protect consumers' savings from use in banks' riskier operations.

And talk about a role reversal for John McCain! McCain voted for Gramm-Leach-Bliley back in 1999—a vote to tear down a law he now wants to restore. And as David Corn wrote last year, one of McCain's closest economic advisers during part of the presidential campaign was the godfather of deregulation himself, former Sen. Phil "Nation of Whiners" Gramm

Rep. Maurice Hinchey (D-N.Y.) is going to introduce similar legislation in the House, the Wall Street Journal reported Wednesday. Hinchey tried to get his bill into the House's big financial-reform package earlier this month, but Democratic leadership blocked him.

Since the Senate probably won't take up financial regulation until early 2010, it's unclear how soon the McCain-Cantwell legislation will get its day in the sun. It could be tucked into the Senate's financial regulation plans, or introduced as an amendment later in the sausage-making process. Either way, it's a promising idea and an encouraging start to the Senate's financial overhaul.

Obama's Wall Street Window Closes

| Tue Dec. 15, 2009 3:50 PM EST

This week the last of the big banks—Citigroup and Wells Fargo—announced they're repaying their TARP funds, ending a major chapter in the Great Bailout Era. (It's not the end of the Era entirely, as many banks still benefit from the Federal Reserve's guarantees and other means of support.) As the banks exit TARP, they proudly shed the bailout's stigma—namely, needing the federal government as a crutch—and are free from the scrutiny of compensation and governance that came with federal assistance. But from a financial-reform standpoint, the bailout represented a huge, once-in-a-lifetime opportunity for the Obama administration: They had leverage, huge amounts of it, Long-Term Capital Management-sized leverage over Wall Street and its "fat cats." Obama, Geithner, Summers, and their allies in Congress (i.e., Rep. Barney Frank (D-MA)) had a window in which they could enact rigorous, meaningful, lasting reforms in the way our financial markets and institutions do business.

Now's as good a time as ever to ask: How'd they do?

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