Be nice to politicians. They live in a different world and need your help to understand this one.
A governor asked a friend of mine for advice. “Barry, when you get to the airport, what do you do with your car?”
Most of us worry whether our pensions will be there when we retire. Pilots, for example, retire in their peak earning years because they worry that their pensions will crash and burn if they stay on. (Financing airline pensions may cost the government as much as the S&L bailout did.)
But congressmen do not worry about pensions. Their separately financed system assures even one-term lawmakers of generous benefits. That has to cool their ardor for solving our pension problems.
I was once the staff director of a commission trying to raise New Jersey’s usury ceiling. Of course, all bankers know that a usury ceiling is insane. It’s the government saying, “We did our part; all you have to do is find a bank that will lend to you at that rate.”
But legislators get praise for opposing banks even if the result is no money rather than cheap money.
“There is no problem with a 6% ceiling,” one insisted. “Why, I got a mortgage at that rate last month with no trouble at all!” The going rate was over 8%, but evidently a member of the Banking Committee could get special treatment.
So banks need access to politicians to help them out and, incidentally, get their own causes seen in a favorable light. In my experience, however, many banks are no good at what it takes to gain access.
Consider, in contrast, the political skill that the savings and loans amply demonstrated. True, it got them legislation that let them destroy their own industry, but it was real skill, and it worked for a long time.
Let’s say that two people are running for Congress from a district that has two major banks and two major savings and loans.
The savings and loan leaders would divvy up the burden. First Federal would support the Democrat and Schmidlap Federal the Republican. No matter who won, S&Ls would have made a friend.
What did bankers do? Usually they supported the Republican. If the Democrat won they would offer their services and get a cold shoulder. “Where were you when I needed you?”
Hence the S&L crisis.
Bankers also came out second-best in how they treated lawmakers at their annual conventions. Usually bankers invited them, period. S&Ls would wine and dine them.
Bribery? No, just a keen awareness that several days of socializing and golfing at a nice resort could foster … access.
Now, some banks have done a much better job. Some have officers who are well known in the state Capitols or Washington and who make it their basic job to accommodate officials whenever possible. A good public affairs officer can make lawmakers’ personal financial projects bankable without going over the line.
The product is access. But lobbyists stress that they must give a friendly lawmaker a heads-up about anything in a pro-bank proposal that could generate bad press. Blindsiding a politician can lead to “negative access”: phone calls not returned, legislative proposals filed in the circular file.
And remember, too, that the press can be cruel to you.
A top banker in Jackson, Miss., was accused of wrongdoing in favor of a politician. The story was front-page news for weeks. The banker had a nervous breakdown over it, his wife told me.
When he was proved completely innocent, the newspaper that had been crucifying him published the news on page 38, next to the sports section.
