Editore"s Note
Tilting at Windmills

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November 17, 2008

REMEMBER ELIOT SPITZER?.... We're all well aware of the former New York Gov. Eliot Spitzer's (D) sex scandal. We're also aware of the criminal investigation, his resignation, and his unmet promise as a potential political heavyweight.

But over the weekend, I read a very sharp piece he wrote for the Washington Post, and I'm reminded that the nation could use someone who knows a little something about cleaning up Wall Street and combating its excesses, and Spitzer seems to be ready and willing to make a contribution.

First, we must confront head-on the pervasive misunderstanding of what constitutes a "free market." For long stretches of the past 30 years, too many Americans fell prey to the ideology that a free market requires nearly complete deregulation of banks and other financial institutions and a government with a hands-off approach to enforcement. "We can regulate ourselves," the mantra went.

Those of us who raised red flags about this were scoffed at for failing to understand or even believe in "the market." During my tenure as New York state attorney general, my colleagues and I sought to require investment banking analysts to provide their clients with unbiased recommendations, devoid of undisclosed and structural conflicts. But powerful voices with heavily vested interests accused us of meddling in the market.

When my office, along with the Department of Justice, warned that some of American International Group's reinsurance transactions were little more than efforts to create the false impression of extra capital on the company's balance sheet, we were jeered at for attacking one of the nation's great insurance companies, which surely knew how to balance risk and reward.

And when the attorneys general of all 50 states sought to investigate subprime lending, believing that some lending practices might be toxic, we were blocked by a coalition of the major banks and the Bush administration, which invoked a rarely used statute to preempt the states' ability to probe. The administration claimed that it had the situation under control and that our inquiry was unnecessary.

The piece concluded, "Although mistakes I made in my private life now prevent me from participating in these issues as I have in the past, I very much hope and expect that President Obama and his new administration will have the strength and wisdom to do again what FDR did."

Reading this, I couldn't help but wonder if Spitzer's personal mistakes really should prevent him from participating in these issues as he has in the past.

Yes, he hired a call girl, but so did Sen. David Vitter (La.), and he's still a sitting Republican senator in good standing, who apparently plans to seek re-election. Yes, he committed adultery, but so did Newt Gingrich (thinking about running for president), Rudy Giuliani (thinking about running for governor), and John McCain (the most recent Republican presidential nominee).

Do we have to exclude Spitzer from addressing the issues on which he has considerable expertise? Issues that have nothing to do with an unrelated sex scandal?

Ben Smith suggested the other day that Spitzer might be a good replacement from Hillary Clinton, should she become Secretary of State. If that's not a realistic option, how about a role in the Obama administration? Is there a better pick in mind for the next chairman of the Securities and Exchange Commission?

Steve Benen 11:05 AM Permalink | Trackbacks | Comments (45)

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Comments

Spitzer's affair matters because he's a Democrat. Only God-fearing Republicans get salvation.

Posted by: Snarklefish on November 17, 2008 at 11:10 AM | PERMALINK

Ben Smith suggested the other day that Spitzer might be a good replacement from Hillary Clinton, should she become Secretary of State. If that's not a realistic option, how about a role in the Obama administration? Is there a better pick in mind for the next chairman of the Securities and Exchange Commission? —Steve Benen

Yes. Pretty much anyone who wasn't busted for patronizing hookers.

Look, I think prostitution should be legalized. However, since it isn't yet legal you want a person who is in a position with legal authority to be pretty much above reproach.

I always thought that he would have been a great AG until he got busted. His career in public office is now done.

Posted by: Jeff II on November 17, 2008 at 11:11 AM | PERMALINK

I think it was last week I said he'd never come back. Track record perfect. He'll probably end up on the Supreme Court. Seriously, he's the best financial cop in recent history, and do we ever need one.

Posted by: ericfree on November 17, 2008 at 11:12 AM | PERMALINK

Wow - Spitzer for SEC chair. That is an absolute stroke of genius. If you add a Treasury Secretary who's NOT from Government Sachs, those two would be a tandem to truly restore financial regulation.

And even if some Wall-Street-fellator like Summer or Rubin get Treasury, Spitzer will be an effective check on him.

Perfect.

Posted by: Yellow Dog on November 17, 2008 at 11:12 AM | PERMALINK

I can't believe I'm hearing this.

As a New Yorker, I was a strong supporter of Spitzer. I felt personally betrayed when this scandal broke out.

I'm pretty open-minded about moral issues. I didn't feel any sense of outrage about Bill Clinton, for example. But it was Spitzer's crusading hypocrisy that really got to me. He pursued cases against prostitution as AG while engaging in it himself. He really should have gone to jail, just like he did to others.

Fuck that guy. He has no credibility and will only bring more woe if chosen for another job. There's lots of talent. What's wrong with Andrew Cuomo?

Posted by: g. powell on November 17, 2008 at 11:14 AM | PERMALINK

Um, Steve, you've seen the Obama adminstration vetting form, right? These people are, wisely I think, trying to head off even the remotest whiff of scandal before it becomes ammunition to be used against them.

I don't think Spitzer would be a good choice anyway. He is much too much of a glory hound -- good at garnering headlines, not so good at effecting actual change. After he went after the investment banks in a highly publicized probe, he slapped their wrists with one hand and took humongous campaign contributions from them with the other. His image as a crusader is not backed up by the facts.

Posted by: gradysu on November 17, 2008 at 11:15 AM | PERMALINK

Ultimately, it's not important that he committed what most would consider to be a minor crime at best, or that he was morally incorrect when he cheated on his wife. What bothers me about Spitzer is that this incident illustrates his extreme poor judgment. The fact that a Republican senator showed similar poor judgment does not excuse Spitzer. Second, the hypocrisy of a man who crusaded against high profile escort services, only to frequent one himself illustrates that he is a man of poor character.

Frankly, poor judgment and lousy character is exactly WHY we're in this mess in the first place. To suggest Spitzer have a place in the administration is a bit ridiculous to me. To regulate the financial industry, when there's so many temptations to do the wrong thing for your own gain, you must prove that you are a man of the utmost character and integrity. Spitzer is not that man.

Posted by: Jessie on November 17, 2008 at 11:18 AM | PERMALINK

I live in NY state and had high hopes for Spitzer when he became governor. He had a lot of good ideas when he came into power, but he had an ear made of tin. The best example was his proposal to give drivers licenses to illegal immigrants. It was (and is) a good idea, but it was a political dog; he went to bat for it and lost.

He was an effective supporter and crusader for reform, in the old-fashioned sense, when he was AG for NYS. I know that politics in NYS is a dirty business (every budget is essentially decided by three men in a room, every year). I do think that Spitzer has his strengths.

But he also has his weaknesses.

Posted by: sdh on November 17, 2008 at 11:24 AM | PERMALINK

Vikings believed in an unregulated free market...just ask the folks in Dublin,Paris, London.....

so did Pirates...regulations were more like guidelines, actually.


Commerce without conscience is catastrophe.

Posted by: RememberNovember on November 17, 2008 at 11:24 AM | PERMALINK

Er, Spitzer but not Edwards? Where was this argument a week ago?

Posted by: Nat on November 17, 2008 at 11:39 AM | PERMALINK

NO! NO! NO! Too soon!

Posted by: Steve M. on November 17, 2008 at 11:41 AM | PERMALINK

NO! NO! NO! Too soon!

Posted by: Steve M. on November 17, 2008 at 11:41 AM | PERMALINK

I thought that Spitzer got much less support from liberals and Democrats than he deserved during the "scandal" (= illegally-leaked, politically-motivated speculations about possible prosecution for acts which are seldom prosecuted). He seems to be an abrasive and unlikable guy.

New York courts and law enforcement have a long history of political misuse (including by Spitzer, alas) and people could have been more skeptical of what they heard.

Spitzer seems to be a very sharp guy, and he has a lot of the right enemies.

Posted by: John Emerson on November 17, 2008 at 11:42 AM | PERMALINK

Boy this is a really f---ing horrible idea. I can't believe you're seriously proposing it.

Spitzer was NOT a decent guy who just happened to be a scumbag in his personal life. He was also totally caught using state police to harass his political opponents, intercepting their communications [!], and oh yeah, his idea of "cleaning up Wall Street" was getting himself a bunch of photo ops, not a single prosecution.

Posted by: Brian Doyle on November 17, 2008 at 11:45 AM | PERMALINK

The REASON Spitzer was hung out to dry was that he was getting TOO CLOSE to the truth! SO WHAT if he hired a call girl!
I would have rather had 8 more years of a Clinton White House than the last 8 years of BUSH putting INTEGRITY BACK into the WHite House!

Posted by: iggy on November 17, 2008 at 11:56 AM | PERMALINK

Forget it. That reasoning is really weak. Spitzer is a former AG who illegally paid to bring hookers across state lines and paid for them using wires from the very institutions that despised him. How was he not going to get busted ? It is not a monumental error of judgement, it is a defect of character.

Lately it's been in vogue to say stuff like Michael Vick was/is an amazing athlete, Eliot Spitzer was an brilliant AG, and Ted Bundy was a nice guy. There is this disconnect, like one trait can be separated from the person and ignored. It can't, Ted Bundy was put to death for killing women, Michael Vick is in prison for torturing dogs, and Eliot Spitzer resigned in disgrace because he liked expensive prostitutes.

Spitzer ruined his career to get laid and quite frankly, that defect can not be separated from the person and I for one do not want someone who pays for pussy using bank wires, watching over Wall Street. Especially when those wires were run through the very companies he policed at one time. What makes anyone think he wouldn't go for some 'free' prostitutes, or that that there are no other skeletons in his closet. He is not a man of honor or integrity and that is what we need watching Wall Street.

let's start practicing what we preach instead of using cheating republican politicians as cover.

Posted by: ScottW on November 17, 2008 at 12:01 PM | PERMALINK

One thing I have learned in life is that there are certain people who you stay away from. They are bad news and will bring you grief if you get too close.

Spitzer is one those people.

Posted by: g. powell on November 17, 2008 at 12:05 PM | PERMALINK

and paid for them using wires from the very institutions that despised him. How was he not going to get busted ?

Actually, that had nothing to do with him getting busted. He got busted because one of the call girls was also being used by Roger Stone (Spitzer's Republican mortal enemy).

Posted by: DR on November 17, 2008 at 12:06 PM | PERMALINK

My partner addressed this over the weekend and pointed out that the fact that Roger Stone was involved was a huge red flag that should have warned us that eliminating Spitzer as a threat to the greedy bastards on Wall Street was probably the underlying cause of the investigation in the first damned place.

Posted by: Blue Girl on November 17, 2008 at 12:14 PM | PERMALINK

You forgot one thing: Spitzer is a democrat, a different set of rules apply to democrats who do creepy things than Republicans who do creepy things.

Posted by: Alex Kirby on November 17, 2008 at 12:15 PM | PERMALINK

Difference: Vitter only dressed up in diapers, and did not necessarily put a very special part of his body in his lady friend's front bottom. And he was only helping his lady friend with some bills she had to pay.

Seriously, Vitter should not be in the Senate, but that's no reason for Spitzer to have a role in the Obama administration; Spitzer's doing what he did as an AG was not only reckless disregard for the law, but also put him in a blackmailable position. I can't see why 'cos he gives good Op-Ed why he should be rehabilitated.

Posted by: Sock Puppet of the Great Satan on November 17, 2008 at 12:25 PM | PERMALINK

Folks, does anyone remember Bear Sterns?

Look at the timing. Elliot was outed just B4 the bail out.

He was becoming too vocal.

Hence he was SILENCED.

Further evidence that this whole Wealthcare mess was orchestrated.

Things are worse than we realize.

God Bush America!

Got legacy?

Posted by: Tom Nicholson on November 17, 2008 at 12:30 PM | PERMALINK

You write: "Yes, he hired a call girl, but so did Sen. David Vitter (La.), and he's still a sitting Republican senator in good standing, who apparently plans to seek re-election. Yes, he committed adultery, but so did Newt Gingrich (thinking about running for president), Rudy Giuliani (thinking about running for governor), and John McCain (the most recent Republican presidential nominee)."

The key point: these men are all Republicans, and everybody in America knows that the Republican Party is the party of "family values."

This is relevant for some reason.

I can't explain it. But then, that's why we have James Dobson, John Hagee, etc. And a lot of Catholic bishops. And Mormons.

Posted by: CMcC on November 17, 2008 at 12:31 PM | PERMALINK

Hiring teh call girl was the only consideration.

He broke the law while enforcing it. This is a definite no-no.

If he polices only financial markets, vice doesn't really enter into the picture and the conflict is minimal.

Like Clinton, those in the executive (and judicial) branch have a special duty to obey laws they enforce and referee. Clinton committed perjury, undermining the entire justice system and proving a very poor role model as president. (The 5th amendment was his for the taking and would be understandable for a minor crime like adultery "to protect the lady's honor.") It may be unfair to ask these people to be more upstanding than the average American, but no one requires you to accept that line of work.

Spitzer should be tapped for his record. Morality is a luxury the other team insists on. I don't. As I know, his integrity in financial matters is unblemished.

Posted by: toowearyforoutrage on November 17, 2008 at 12:32 PM | PERMALINK

Umm, forgive me for asking the stupid questions here, but 1. just how does Vitter getting away with something illegal somehow mean it's then "okay" for Spitzer to get away with it? and 2. wasn't Spitzer's even larger problem that he used political funds to pay for said hooker?

Posted by: August J. Pollak on November 17, 2008 at 12:32 PM | PERMALINK

This is why I love liberal blogs...

I start out agreeing with Steve, then I end up agreeing that his idea isn't agreeable (to me anyway).

Spitzer did a lot of damage by being arrogant, and thinking himself to be above the law. Obama should never hire anyone who did that if possible, there have to be others more suitable, without that kind of moral failures for all the wingnuts to point at at every turn.

Vitter did it too, but so what? Democrats have to be different.

Posted by: Racer X on November 17, 2008 at 12:38 PM | PERMALINK

There is no one more qualified to be Obama's Attorney General than Eliot Spitzer, and his overblown scandal was a loss to the party of a talent that John Edwards never could have been. I'm glad to see Spitzer is starting to re-emerge. True, he was a failure as a governor even before the prostitution scandal; Spitzer may lack the skill at diplomacy and compromise necessary for success as a chief executive, but as a prosecutor or other policy enforcer he has no equal of whom I'm aware.

August J. Pollak-- I don't recall any substantiated allegations that Spitzer used campaign funds to pay for his services. If you remember something that I don't, I'd appreciate a link.

Posted by: JRD on November 17, 2008 at 12:40 PM | PERMALINK

Elliot Spitzer?

Are you kidding? The guy spent 100,000 dollars
on a prostitute, in a business he was legally obligated to prosecute!

He came to power claiming to have been successful
shutting down organized crime, only in the background
to be giving organized crime tens of thousands of dollars.

I don't make anywhere near that in a year, and
he is spending it on a tart when he has an
attractive wife, civic responsibilities, and
such?

If his wife will not make love to him he needs
to get a legal separation as the law allows,
and then find someone to love.

This is absurd. The fellow lied to his constituents, thus, as you have said yourself, thus thru a lie, did steal their votes.

na. I am as liberal as you get, and this fellow
just now disguts me. He cannot be trusted.
He sold out his family, his wife, his state,
for a little sex! Shit, one wonders just how
much of his attention was on his tart, and how
much was on his duties.

I would not hire such a person for national
responsibilities. never.

$100,000 for sex. Rich kids with no ethics.
No sensibilities.

No. Sorry. Don't trust him, and don't like him either.

ps.

I was one of those Dems who did not vote for Hillary because I did not want to see her husband back in the white house ever again.

and I jumped for joy when Obama picked Biden.

Hillary would fill a cabinet post really well.

But for Spitzer ... nothing. And for those
left wing liberals like myself that have managed
a 25 year marriage without straying .. spitzer
just looks too immature to me.

He may have brains, but he has no ethics.
And ethics is what counts.
He lied to the citizens of NY and thus stole their vote.
Now another serial adulterer is their Governor.
Another choice they were not given the right to
make.
This is a failure of ethics in governance,
and it is that which I will not abide, personally.

Posted by: Edward Bardell on November 17, 2008 at 12:44 PM | PERMALINK

Forget it. The Obama vetting process is very thorough for very good reasons. There's a double standard for Dems and Republicans on this issue, and we just have to accept that, at least for now. Spitzer is a very bright guy, but there are plenty of other smart people for Obama to choose from, who don't have his baggage. The reality is that people who do the kinds of things Spitzer did often do them again, and that's trouble Obama does not need.

Posted by: beckya57 on November 17, 2008 at 1:02 PM | PERMALINK

The advantage with Spitzer is that (in theory) the worst has already come out about him. It's not like the Republicans can astound the world by telling people that Spitzer had to resign as the governor of New York because he got caught patronizing prostitutes. I'm guessing there are tribes way up in the Amazon who know the story by now, so there would be no surprises.

Personally, I'm holding out for Patrick Fitzgerald -- who would also burnish Obama's bipartisan credentials -- but he'll probably want to finish his Rezko investigation first.

Posted by: Mnemosyne on November 17, 2008 at 1:33 PM | PERMALINK

I think the argument that has to be made is "free and HONEST markets." You add that "honest" in there and Republicans will abandon it like crazy. It'll be fun to watch them twist themselves in idealogical knots.

Posted by: Ken in MS on November 17, 2008 at 1:39 PM | PERMALINK

Spitzer didn't simply hire a prostitute. He also attempted to hide the financial arrangements, which were considerable. He's lucky they decided not to prosecute.

Posted by: duBois on November 17, 2008 at 1:45 PM | PERMALINK

The political hit job that did Spitzer in was payback for his efforts, mostly successful, to hold Wall Street to some sort of ethical standard in the face of the cowboy capitaiism championed by the Bush regime. That Spitzer was making his bones in anticipation of running for governor doesn't detract from those efforts, although there were many who said he didn't go far enough: that he pulled his punches.

If there was a level playing field, Spitzer would still be Governor of New York, where he belongs, but Republican pecadillos are always ignored or forgiven, while Democratic ones are punished forever. The country could use Spitzer right now. I doubt Obama will have the courage to appoint him head of the SEC, but I would applaud him if he did.

Posted by: rich on November 17, 2008 at 1:46 PM | PERMALINK

Good opinion. Damn him. he drove the cost of hookers out of sight

Posted by: EC Sedgwick on November 17, 2008 at 1:50 PM | PERMALINK

I agree Spitzer acted despicably but I don't think we should be too sanctimonious about it.

If an objective review of his career taking on Wall Street shows he knows where the bodies are buried, I think the Obama Administration should look for a place his talents can be put to use.

Otherwise, I think he needs to start writing a blog about the criminals of this financial mess. To put them on public notice, to inform policy makers and the rest of us about them, to shame companies into firing them and making their names mudd.

Posted by: Cal Gal on November 17, 2008 at 1:55 PM | PERMALINK

Lately it's been in vogue to say stuff like Michael Vick was/is an amazing athlete, Eliot Spitzer was an brilliant AG, and Ted Bundy was a nice guy. There is this disconnect, like one trait can be separated from the person and ignored. It can't, Ted Bundy was put to death for killing women, Michael Vick is in prison for torturing dogs, and Eliot Spitzer resigned in disgrace because he liked expensive prostitutes.

One of these things is not like the others...

Posted by: ajay on November 17, 2008 at 1:55 PM | PERMALINK

I say this as a life long NYer and Democrat...it's a damn good thing that Eliot Spitzer is out of office. He is the definition of everything wrong with politics in America. If you think Republicans are bad, seriously look into how he treated AIG, Richard Grasso and Joe Bruno. We don't need his weasel ass anywhere need politics. Want change? Forget Spitzer.

Posted by: Johhny on November 17, 2008 at 2:21 PM | PERMALINK

Amazing, no, that Sen. David Vitter, a John, is still a sitting Republican senator in good standing. And both Newt Gingrich and Rudy Giuliani committed multiple acts of adultery.

Thanks, party of family values.

Posted by: Tec619 on November 17, 2008 at 2:21 PM | PERMALINK

Please, you fail to understand the fundamental political truth. IOKIYAR (It's OK If You're a Republican.) However, it's not caused by GOP hypocrisy alone, but with the media and the Democrat's complicty.

Democrats eat their own and the media add the seasoning. All the GOP does is light the fire.

Posted by: RuthAlice on November 17, 2008 at 2:29 PM | PERMALINK

I had a different idea for spitzer. E sould become the democrat pundit bulldog. Get him on every political talkshow. let him make a fool of dick morris (ironic i know) and newt gingrich. Even better, challenge Fox news to let Elliot sit in for Colmes and watch a brilliant prosecutor rip apart Hannity.

Posted by: Axe Diesel Palin on November 17, 2008 at 7:56 PM | PERMALINK

I had a different idea for spitzer. E sould become the democrat pundit bulldog. Get him on every political talkshow. let him make a fool of dick morris (ironic i know) and newt gingrich. Even better, challenge Fox news to let Elliot sit in for Colmes and watch a brilliant prosecutor rip apart Hannity.

Posted by: Axe Diesel Palin on November 17, 2008 at 9:03 PM | PERMALINK

I had a different idea for spitzer. E sould become the democrat pundit bulldog. Get him on every political talkshow. let him make a fool of dick morris (ironic i know) and newt gingrich. Even better, challenge Fox news to let Elliot sit in for Colmes and watch a brilliant prosecutor rip apart Hannity.

Posted by: Axe Diesel Palin on November 17, 2008 at 9:06 PM | PERMALINK

Leaving aside the questions about what Spitzer should do, the last paragraph of his article struck me as needing wide circulation:

"And when the attorneys general of all 50 states sought to investigate subprime lending, believing that some lending practices might be toxic, we were blocked by a coalition of the major banks and the Bush administration, which invoked a rarely used statute to preempt the states' ability to probe. The administration claimed that it had the situation under control and that our inquiry was unnecessary."

I know there will be no more Bush, but this needs to be hammered home,and looked into more fully. I can't help but believe that some palms were greased to keep this inquiry from happening.


Posted by: Marc on November 18, 2008 at 8:03 AM | PERMALINK

um -- I suspect you need to go back and see what Spitzer was actually taken down over. It wasn't the call girls -- it was the nasty, vicious, backstabbing, ugly way he ruined lives and careers over *just that behaviour* and *then* getting caught with his hand in the cookie jar that took him down.

Do you *really* want someone who's whole career is predicated on the nastiest, lowest, meanest common denominator in charge of ANYTHING? Talk about Old Style Politics.

Posted by: Twilight2000 on November 18, 2008 at 3:30 PM | PERMALINK

Whether it's a good idea or not, it's never going to happen. Obama doesn't need that kind of trouble.

Posted by: Barbara on November 19, 2008 at 12:31 AM | PERMALINK




 

 

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