The New Financial Capitol

Government Spending Is Shifting The Center Of Economic Power From Wall Street To Washington

(CBS)  The DigitalBridge company is trying to bring broadband technology to the small town of Appomattox, Va. But in this economy, financing is not easy to find.

"It's been incredibly hard to raise venture capital and only the best business plans get funded," said Kelley Dunne, the CEO of DigitalBridge.

Private investment into these kinds of deals has collapsed from $30 billion a year in 2007 to only an estimated $18 billion this year, reports CBS News correspondent Anthony Mason.

With the country's banking system rocked by the economic crisis, Wall Street isn't the country's financial center anymore. American businesses looking for capital are turning from Wall Street to K Street.

"Very simply, Washington has become the financial capital of the United States," said Ian Bremmer, an international business consultant with the Eurasia Group. "Washington is going to drive who the winners and losers are going to be out of this crisis - and that really changes the ball game."

So businesses are signing up for matchmaking sessions to link them with government agencies giving out stimulus money.

"Wherever the government is actually is where you need to be," said Alex Fortunati.

Or, heading to K Street headquarters for Washington's high-powered lobbyists.

Thomas Hale Boggs, Jr. is often called the "King of K Street."

"How many lawyers do you have?" Mason asked.

"Six hundred and some," Boggs said.

His firm Patton Boggs is getting clients they've never heard of before: companies, small towns, even banks, who want a piece of the action.

"If the government's the bank, how much money is there in the bank?" Mason asked.

"The total pie is over 2 trillion dollars," Boggs said. "That's a big bank."

Government agencies, like the Transportation Department, can't give it out fast enough.

"Forty-eight billion needs to get out within two years," said Lana Hurdle, a deputy assistant secretary of Transportation.

The money does come with conditions.

"We aren't just standing on the street handing out money to anyone," Hurdle said.

But if Wall Street's vice was greed, Washington's vice is politics.

"It's not just about what Obama wants, it's also about what Congress wants, and that creates inefficiencies and it slows down the process," Bremmer said.

"How long is this going to be the financial capital?" Mason asked Boggs.

"Well, I would say it's going to certainly be the financial capital for the next five, six or seven years," Bogg said.

DigitalBridge is banking on it.

"We have currently 150 applications that we're getting ready to submit and they total about $40 to $50 million in stimulus funding," Dunne said.

America's financial landscape is changing - so is the economy's power structure.

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[John_Merritt]

This reminds me of the kids who could not play fairly and nice with the other children, and the parents had to come in and take away their implements of pleasure. Maybe if they can show they are responsible enough to warrant the return of their 'toys', than it might change for the better. But before that happens, some hard and fast rules need to be instituted. Does this remind you of a dysfunctional family? I, for one, believe that responsibility always starts at the top and should permeate down through the ranks. Otherwise there is disorderly function in the structure of the unit. Do you see where Obama and company are going with this? Not that I agree with him on some things; there is a new sheriff in town and maybe this is what he meant by change. Now if only all of us could agree that something was definitely wrong and reparation cannot take place until the slate has been wiped clean of the trash within. I see where he is going with this, and I encourage ingenuity. Let's see where and how this plays out before we jump to conclusions, OK?

[despido]

Government Spending Is Shifting The Center Of Economic Power From Wall Street To Washington...

Oh Great... Tell me who is dumber: Wall Street runs their firms in the ground, rapes the American people and pockets hundreds of billions of dollars - personal profit. They then tell Bernanke and Paulson that if the government doesn't give them hundreds of billions more... the world will implode. Bernanke, Paulson, Reid, Pelosi, Geithner, Bush and Obama fall all over themselves to write the check. In return America gets options on the grifters stock. The same grifters then pocket billions more in bonuses, salaries and retainers while negotiating the re-purchase of their options at 25 cents on the dollar. The government agreed - it accepted $68 billion as full repayment for $250+ billion. Today, these same suits granted their cronies a 50% salary increase, returned to business as usual and now threaten to sink Bernanke. Who looks stupid now?

If only these guys were on our side - Then Ahmadinejad, Kim, Terrorists, whoever.... wouldn't stand a chance. BUT, we've got Obama, Giethner, Bernanke . . . and Congress. We're doomed.