Here's a bit of undercovered news from last week:
A decade ago, a former Treasury secretary, Robert E. Rubin, left the Clinton administration to become a senior adviser and board member at Citigroup collecting a $10 million a year paycheck with no management responsibility.
On Thursday, Peter R. Orszag, President Obama’s first budget director and a protégé of Mr. Rubin, followed in his mentor’s footsteps and joined Citi’s investment banking group as a vice chairman. Mr. Orszag, 41, is the second cabinet official to join Citi this month, and his appointment comes days after the Treasury Department’s $10.5 billion stock offering helped further extricate the bailed out bank from Washington.
Fallows articulates why this is tremendously problematic:
Objectively this is both damaging and shocking.
- Damaging, in that it epitomizes and personalizes a criticism both left and right have had of the Obama Administration's "bailout" policy: that it's been too protective of the financial system's high-flying leaders, and too reluctant to hold any person or institution accountable. Of course there's a strong counter argument to be made, in the spirit of Obama's recent defense of his tax-cut compromise. (Roughly: that it would have been more satisfying to let Citi and others fail, but the results would have been much more damaging to the economy as a whole.) But it's a harder argument to make when one of your senior officials has moved straight to the (very generous) Citi payroll. Any competent Republican ad-maker is already collecting clips of Orszag for use in the next campaign.
- Shocking, in the structural rather than personal corruption that it illustrates. I believe Orszag (whom I do not know at all) to be a faultlessly honest man, by the letter of the law. I am sorry for his judgment in taking this job,* but I am implying nothing whatsoever "unethical" in a technical sense. But in the grander scheme, his move illustrates something that is just wrong. The idea that someone would help plan, advocate, and carry out an economic policy that played such a crucial role in the survival of a financial institution -- and then, less than two years after his Administration took office, would take a job that (a) exemplifies the growing disparities the Administration says it's trying to correct and (b) unavoidably will call on knowledge and contacts Orszag developed while in recent public service -- this says something bad about what is taken for granted in American public life.
Should Peter Orszag be ashamed of himself? Yes, but it's unclear if the people who serve in the upper echelons of finance and government retain the capacity for shame.