Quid Pro Quo

Americans have more than one currency. We use the greenback to buy things. And in politics, there’s quid pro quo – the tacit agreement that I will do X for you if you do Y for me. The allegations against Illinois Gov. Blagojevich are a textbook example of this. Federal prosecutors say he wanted to appoint a U.S. Senator who would, in turn, make sure he and/or his wife got a six-figure job.

Quid pro quo was at play in the New York Legislature, too. Three Democratic state Senators from NYC wanted lucrative positions in the chamber’s leadership. After threatening to switch party affiliation and vote Republican, they got what they wanted.

A NYTimes Op-Ed column by Michael Lewis and David Einhorn has another example of quid pro quo – this one in the federal Securities and Exchange Commission (S.E.C.):

Created to protect investors from financial predators, the S.E.C. has somehow evolved into a mechanism for protecting financial predators with political clout from investors.

It’s not hard to see why the commission behaves as it does. If you work for the enforcement division of the S.E.C. you probably know in the back of your mind, and in the front, too, that if you maintain good relations with Wall Street you might soon be paid huge sums of money to be employed by it.

The commission’s most recent director of enforcement is the general counsel at JPMorgan Chase; the enforcement chief before him became general counsel at Deutsche Bank; and one of his predecessors became a managing director for Credit Suisse before moving on to Morgan Stanley. A casual observer could be forgiven for thinking that the whole point of landing the job as the S.E.C.’s director of enforcement is to position oneself for the better paying position on Wall Street.

The column argues that watchdogs need to do a better job of watching – and dogging. I think that’s true of news media, as well.

Because all of us have to know what elected officials are promising for their votes and what they expect in return. If we don’t, we don’t know who’s profiting, who’s losing or – perhaps most importantly – how the players profit. And look what that’s done to the U.S. economy.