By Matt Stoller and cross-posted from Medium.com
When former President Barack Obama decided to take $400,000 from a Wall Street investment bank for the first paid speech of his post-presidential career, he accelerated an important debate within the political establishment.
As a policy leader, Obama’s Presidency was largely defined by the financial crisis. The government’s response, organized first by Bush and then Obama, had a moral core. This moral core framed concentrations of financial power not as threats to liberty and democracy, but as vehicles to deliver efficiency and social justice. You don’t, for instance, want random protesters setting nuclear policy, you want generals and experts doing that. You don’t want anyone to be able to organize a search engine, you want the best technologists in the business doing that, doing it well, and doing it for everyone. That’s not just power, it’s the right way to run a society.
In this framework, taking money from an investment bank in the form of a speaking fee is not immoral, it is eminently reasonable. Investment bankers are smart. They allocate resources. That’s why they have power. That’s who elites should be associating with. Obama, like Bush, is a Hamiltonian. He believed that those at the top of large concentrated financial institutions are experts, with top-tier credentials, and, therefore, rightful rulers. As Mr. Obama put it, Jamie Dimon, the chief executive of JP Morgan Chase, and Lloyd Blankfein, the chief executive of Goldman Sachs, were just “smart businessmen.”
Behind this is a deep moral debate that goes back hundreds of years, to the days of Hamilton and Nicholas Biddle. Since the Boston Tea Party revolt against the British East Indies Company’s attempted monopolization of the tea trade in 1773, Americans understood local commercial institutions as enabling key decisions to be made closer to the people who bore the costs of those decisions. Advocates of centralization, like Hamilton, believed that this was an unstable and weak model for how to craft a nation-state, and that a quasi-aristocratic class should rule…