The Wall Street revolving door & the U.S. Trade Representative
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The Obama White House and the Republican leadership in Congress are pushing hard for a massive and environmentally- destructive trade agreement, the Trans Pacific Partnership, and two similar deals. The TPP reflects the philosophy and culture of the Office of the U.S. Trade Representative, which assume that many forms of regulation by democratic institutions inhibit global economic growth.
This is not surprising, given that the U.S. Trade Representative and members of his senior staff frequently rotate through the revolving door to and from positions in Wall Street banks, multinational law firms, corporate lobby shops, political campaign fundraising operations and the executive suites of global corporations. It is no wonder that the public believes our current trade policies are imbalanced.
Take the case of Ambassador Michael Froman, the current U.S. Trade Representative, a former Citigroup executive and bundler of Wall Street and other contributions to the 2008 Obama presidential campaign. Froman has been through the revolving door between Wall Street and government service repeatedly. He is a man who, by background and mindset, responds to financiers and corporate chieftains rather than the woman or man on the street.
In the Clinton Administration, Froman served as chief of staff to Treasury Secretary Bob Rubin (and former head of Goldman Sachs) where they pushed legislation to deregulate the financial services industry: a root cause of the 2008 financial crisis and the subsequent Great Recession.
At the end of the Clinton Administration, Froman followed Rubin to Citicorp where they engaged in alleged casino gambling investments that broke Citi when the house of cards tumbled. U.S. taxpayers had to spend billions to bail out Citi and other Wall Street institutions.
But, Froman did not go to jail or lose his shirt but rather pocketed millions in compensation at Citi. He was then given a reported $4 million bonus, aka a golden parachute, by Citi to join the Obama Administration first on the White House staff proper and now as U.S. Trade Representative — ?where he is pushing for the TPP and other trade deals that would deregulate financial services and put a brake on environmental and other public interest safeguards.
“Why does the revolving door matter?” Senator Elizabeth Warren asks and answers, “Because it means that too much of the time, the wind blows from the same direction. Time after time in government, the Wall Street view prevails, and time after time, conflicting views are crowded out.” It’s time to reform USTR and slam the revolving door shut.
Read the full Friends of the Earth analysis here.
Listen to an interview with Bill Waren, senior trade analyst, as he discusses the report on Alison Rose Levy’s Connect the Dots radio show: