Why Business Should Be Embarrassed by the U.S. Chamber of Commerce
How many business people feel good about what the U.S. Chamber of Commerce does in their name? New reports suggest the country's largest business trade association may have hired private security firms to smear its critics, including labor groups and liberal think tank the Center for American Progress.
The CoC also continues to sponsor what economist Simon Johnson calls "misleading research" about the impact of new derivatives rules on employment. In a recent report, a group linked with the Chamber called Keybridge Research claimed that the new regulations, passed this summer as part of the Dodd-Frank financial reform law, could cost U.S. companies that use swaps as many as 130,000 jobs.
Really? Sadly, no. MIT economist John Parsons debunked the report, leading Johnson to conclude:
The Keybridge document itself is pure lobbying masquerading as research. We know that financial sector players like to have as little capital at possible in all aspects of their business â€"- a reckless degree of leverage is how they boost their return on equity (as Anat Admati is explaining to anyone who will listen). The Keybridge survey seems to have been structured to elicit responses that are pro-leverage.
This is not any kind of research. This is people who want to over-leverage and risk the system -â€" because, once again, they will get the upside and taxpayers/all citizens get the downside.The CoC is actively campaigning to block other elements of financial reform, including a new SEC rule empowering shareholders to nominate corporate directors. The group is also working to roll back environmental regulations proposed by the EPA. Last year, meanwhile, it was accused of illegally using foreign money to fund ads attacking political opponents.
A disturbing picture, in short. Business deserves a strong voice in Washington, but as a lobbyist the Chamber is now among the sleaziest of back-room operators. It's also deeply conflicted as a champion of small business, which the CoC claims is its chief constituency. In fact, the organization is largely funded by a handful of big corporations, whose interests often directly conflict with those of smaller employers.
As a centerpiece of financial reform, for instance, requiring companies that use swaps to hedge their risks to hold more capital will make the financial system safer and more stable. In its present form, the law also would force Wall Street firms to use less leverage. Both safeguards are therefore a boon for small business. As Federal Reserve Governor Daniel Tarullo will tell the House Financial Services Committee in a speech later today:
Capital and margin requirements are central to the prudential regulation of financial institutions active in derivatives markets, as well as to the internal risk-management processes of such firms.So why is the Chamber opposing regs that would help most of its members, if not the most well-moneyed firms? Business people deserve better.
Related:
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- Koch Industries: Behind the Fight to Gut the EPA
- Season's Greetings: Inside Wall Street's 7-Point Plan to Wreck Financial Reform
- Why Wall Street May Yet Win the Derivatives War
- Financial Deform: Republicans Paints a Bulls-Eye on Dodd-Frank Reforms