An Unfortunate Decision by Peter Orszag

Last night, on the "Virtually Speaking" discussion about the media with Jay Rosen of NYU, we talked about the phenomenon of things that everyone in the press corp "knows" but that don't make their way into news stories or broadcasts. One such category involves things that everyone suspects but can't quite prove -- for instance, how involved Dick Cheney and Karl Rove were in the Valerie Plame case. Or, to make it bipartisan, about Bill Clinton's sexual behavior over the years. But another category, which I think is even more important, involves things that everyone "knows" but has stopped noticing. This is very similar to what is called "Village" behavior in the big time media.

An item in this second category has just come up: the decision of Peter Orszag, until recently the director of the Office of Management and Budget under Barack Obama, to join Citibank in a senior position. Exactly how much it will pay is not clear, but informed guesses are several million dollars per year. Citibank, of course, was one of the institutions most notably dependent on federal help to survive in these past two years.

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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.

When we notice similar patterns in other countries -- for instance, how many offspring and in-laws of senior Chinese Communist officials have become very, very rich -- we are quick to draw conclusions about structural injustices. Americans may not "notice" Orszag-like migrations, in the sense of devoting big news coverage to them. But these stories pile up in the background to create a broad American sense that politics is rigged, and opportunity too. Why do we wince a little bit when we now hear "Change you can believe in?" This is an illustration.
 _____
* What choice did he have? He could have waited a while. He could have gone to a lucrative job at a business school or even a think tank, for perhaps half-a-million per year versus many millions. He could have written a book and gone big time on the lecture circuit. He could have taken a corporate job somewhere other than finance. He could have taken a finance job someplace other than Citibank (or Goldman Sachs or AIG etc..) There were other possibilities. I am sorry to go down a list like this, because it inevitably sounds preachy -- and again, this is not about Orszag except as an example. It's about the pattern, which people should be angry about.

[Illustration is Thomas Nast's famous caricature of Boss Tweed, in an earlier era of pluto-politics.]
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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

Fallows welcomes and frequently quotes from reader mail sent via the "Email" button below. Unless you specify otherwise, we consider any incoming mail available for possible quotation -- but not with the sender's real name unless you explicitly state that it may be used. If you are wondering why Fallows does not use a "Comments" field below his posts, please see previous explanations here and here.

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