In The Personal Wealth Interests of Politicians and the
Stabilization of Financial Markets, researchers from the London Business School and Tillburg University demonstrate the likelihood of US members of Congress voting in favor of bank bailouts was correlated with those politicians' individual investments in banking stocks.
Critically, the researchers tease out an overall support for the finance industry (which might lead politicians to both invest in, and vote in favor of, the banks) by comparing the voting records of Congress members who had once held bank stocks, but did not hold them at the time of the bailout votes.
Also positively correlated with bailout votes: members of Congress whose spouses' 401(k)s had lost value after the 2008 crisis.
The new data showing a correlation between wealth and policymaking emerges at a moment when federal offices are increasingly held by the rich. In the current Congress, the median lawmaker’s net worth is more than $1 million -- and 271 of the 533 members are millionaires. Meanwhile, president-elect Donald Trump has appointed a Cabinet of corporate moguls, CEOs and wealthy political figures whose combined net worth is more than $14 billion.
The Personal Wealth Interests of Politicians and the
Stabilization of Financial Markets [Ahmed Tahoun and Laurence van Lent/Institute for New Economic Thinking]
Lawmakers Who Owned Bank Stock Were More Likely To Vote For Wall Street Bailout: Study
[David Sirota/International Business Times]
(via Naked Capitalism)
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