In the battle between Wall Street and the Senate Permanent Subcommittee on Investigations, the public is represented by nine Senators aligned like Eisenhower's Allied Armies against the forces of Goldman-Sachs and their Wall Street cabal. It's their job to protect us against fraud, abuse and manipulative practices that have brought the biggest economy in the History of Man to its knees. You think it's a fair fight?
Lloyd Blankfein, Goldman-Sachs CEO, grew up in a housing project in Brooklyn. He attended New York City's much-maligned public schools. Son of a postal worker, sans legacy, he earned his admission to Harvard at age 16. He's never received a paycheck that wasn't directly related to the income he produced for his employer. Like him or not, he's a big hitter, the personification of the capitalist ethos. Blankfein didn't get to be CEO at Goldman-Sachs accidentally. Without big-shot relatives to oil his path, he scratched and crawled all the way to the tip-top of the capitalist tower. The litter in his wake, the lesser talent fallen by the wayside, may be unknown to you and me, but it is not unimagined.
Now he and his buddies are up against the Senate Permanent Subcommittee on Investigations. And who are they? The timeworn subcommittee Chairman, Carl Levin, received his law degree 51 years ago. Lloyd Blankfein was a toddler then. Levin soon become a public servant. He's spent a lifetime in public office. The Chairman has no special experience, no knowledge or training in complex financial instruments. Yet, he leads this investigation. The fear that must strike in Blankfein's blackened heart!
Those on Levin's subcommittee offer nothing more than their Chairman. They remind one of a Homeowners Association board. Like a group of local neighbors, volunteers with no real-life experience relevant to the task at hand, these Senators are entrusted with the responsibility for making complex assessments about issues they know little or nothing about. Even worse, like so many in public office, once attached to the title "Senator" they assume a patina of competence distinctly undeserved.
The subcommittee's Democrats from Delaware are an example. Tom Carper is former military. Yes, he did get an MBA. But instead of going into business, Carper ran for public office at age 29. He's still there. Ted Kaufman's background provides no better qualification. Back in 1976, when Lloyd Blankfein was a 15 year-old kid in Brooklyn, Kaufman joined the staff of then Senator Joe Biden. Thirty-three years later, he replaced Biden in the Senate.
Another subcommittee Democrat, Arkansas' Mark Pryor graduated from law school in 1988. Within 3 years he too held elected office. He's worked in government ever since. Pryor's financial expertise, like Carper and Kaufman, is limited to... well he has none. Claire McCaskill of Missouri, the final Democrat on Levin's team has actually held a private sector job. She proudly lists on her website. She worked as a waitress in a luxury summer resort while attending college. Other than that, McCaskill's entire adult employment has been with the government. Her financial expertise, like her colleagues', is nonexistent.
What about the Republican members of this subcommittee? They're supposed to be the party of business. Not today. Sen. Tom Coburn from Oklahoma is a doctor. After medical school he worked as an OB/GYN physician. But not for very long. At 46, Dr. Coburn turned in his physician's white coat for the politician's metaphorical skillfully cut, chocolate silk suit. While working only as a doctor in 16 of the last 27 years, and not since 2005, Coburn now spends more time talking about being a doctor than actually being one. In the world of high finance he has no known expertise.
Nevada's John Ensign also has a medical background of sorts. He is a veterinarian. He claims to have opened Las Vegas' first 24-hour vet store. But, like fellow doc, Tom Coburn, other horizons beckoned to Ensign at an early age. In his mid-thirties he ran away from the barnyard - straight for Congress. He's been there ever since. When looking at credit swaps, can Ensign spot a dog?
Another GOP subcommittee member, Susan Collins of Maine, graduated from college in 1975 and immediately went to work in Washington on the staff of Maine's Senator William Cohen. Collins has spent her whole adult life in Washington where, like her mentor, she's assumed a mantle of leadership. Based on what? Who would say Collins' could challenge the big guns of Wall Street?
The last member of the Senate subcommittee is John McCain of Arizona. We all know his background - unlike Blankfein - a legacy admit to his college, The Naval Academy, where he barely graduated; a spotty record as a Naval flyer; shot down in Vietnam; returned from being a POW as a national hero and - of course - ran for public office. Nearly 74 now, still there. McCain's financial experience consists mainly of his questionable involvement as one of "The Keating Five." He knows nothing of the complex world of high stakes esoteric financial instruments. Plus, while McCain never pretended to be an intellectual giant, too much of what he did know he seems to have forgotten lately.
There's your line-up: Wall Street v The Senate Permanent Subcommittee on Investigations. Blankfein must be shaking in his boots, don't you think? No. The Street is smirking. And we should be asking: Why is the public so poorly represented? It's not a fair fight.