Abstract
This Master’s thesis explores the question of how Wall Street, as a special interest group in American political life, was able to translate economic power into political power in the 1990s. The theoretical basis of the thesis is pluralism in policymaking – particularly biased pluralism: the observation that some groups in society have an amount of political influence that is disproportionate to their numbers. Moreover, the more recent body of scholarship in financialization theory serves as an important framework for this my analysis of the rise of Wall Street’s influence towards the end of the twentieth century. As opposed to explaining the U.S. financial sector’s increased political influence in terms of monetary capital and lobbying activity targeting the legislative branch, this thesis seeks to develop an understanding of the evolving relationship between the financial sector and the executive branch over the course of American history, and the ways in which the relationship between the two help shape economic policy within time-specific contexts. Importantly, the thesis attempt to explain how and why the most substantial and consequential financial deregulation efforts of the twentieth century occurred in the 1990s, under a Democratic administration. The thesis considers the extent of influence Wall Street has over regulation of the financial services industry as an indicator of how much political power the financial sector holds. To this end, I examine long-term structural changes in the U.S. economy, historical changes in the relationship between the federal government and the financial sector, the rise of financialization as a political, economic, and sociocultural process, the revolving door of between Wall Street and Washington that trade-specific expertise necessitates, and the emergence of a political ideology of self-regulating free markets that became hegemonic by the 1990s. Moreover, the thesis examines the relationship between President Clinton and his administration and advisors in order to understand why the most comprehensive and far-reaching financial deregulation efforts of the twentieth century occurred in the 1990s. A historical primary source-based method is used to analyze certain defining events in this decade that shaped President Clinton’s economic agenda and the administration’s relationship to the financial sector. The thesis sees the intersection of politics, economic and culture as a «structure» that shifts in time. The 1990s saw a structural shift, and it consequently shaped political conversations, conflicts, and policy-making during the Clinton presidency from 1993 to 2000.