Nexus: Chapman's Journal of Law and Public Policy

After the financial meltdown of the last year and a half we stand at the edge of a crossroads in American ideals and goals. The failure of the large financial institutions was largely the result of politicians and lobbyists working together to allow banks and other institutions to operate relatively unimpeded. I believe that this is due in large part to the revolving door in politics and the huge amounts of money that are necessary for a successful bid for election and/or reelection. Fixing this problem is neither going to be easy or quick.

Taking the money out of politics is much easier said than done. Interests have become so entrenched in the political machinery of this country that it will take a major upheaval of the system to reform it. It is clear, to me at least, that this was a major cause of the financial meltdown. It is the same institutions that created the global crisis that are now working to prevent the regulation needed to prevent a recurrence, and they are willing to pay those legislators who can impose such regulations very handsomely. Many of those legislators are willing to acquiesce because it will inevitably guarantee them a high paid job after they leave public service, the “revolving door.”

It is true that such regulations have failed in the past. The savings and loan crisis of the 1980’s was met with action by Congress to redefine how S & L assets were to be valued which hurt many of those institutions, and the courts eventually ruled for the owners of these institutions and forced the government to pay compensation for their losses which they considered a “taking” under the Fifth Amendment. The beauty of history, however, is that we can learn from our mistakes and make better and more effective decisions. With politicians acting for the benefit of those that line their pockets and overlooking the needs of the people change will never occur that will prevent such a crisis from happening again. America needs to start looking at the big picture and let politicians work for those who elect them and not those that fill their coffers and are waiting patiently outside the revolving door with their arms wide open.