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Some of Treasury Secretary Timothy Geithner’s closest aides, none of whom faced Senate confirmation, earned millions of dollars a year working for Goldman Sachs Group Inc., Citigroup Inc. and other Wall Street firms, according to financial disclosure forms.
The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford. Another top aide, Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund. As part of Geithner’s kitchen cabinet, Sperling and Sachs wield influence behind the scenes at the Treasury Department, where they help oversee the $700 billion banking rescue and craft executive pay rules and the revamp of financial regulations. Yet they haven’t faced the public scrutiny given to Senate-confirmed appointees, nor are they compelled to testify in Congress to defend or explain the Treasury’s policies.
“These people are incredibly smart, they’re incredibly talented and they bring knowledge,” said Bill Brown, a visiting professor at Duke University School of Law and former managing director at Morgan Stanley. “The risk is they will further exacerbate the problem of our regulators identifying with Wall Street.” While it isn’t unusual for Treasury officials to come from the financial industry, President Barack Obama has been critical of Wall Street, blaming its high-risk, high-pay culture for helping cause the financial-market meltdown.
At The Atlantic, Daniel Indiviglio writes:
I have a few comments about this. First, what exactly is it that Bloomberg is proposing? Should every employee of the Treasury be confirmed by the Senate and testify in Congress? Clearly, that’s madness…
It sounds to me like Bloomberg is joining the growing chorus of people who object to Wall Street’s influence in Washington. If lawmakers are really that worried about the Wall Street connection, then they could always require that no one working for the government was ever compensated directly or indirectly by Wall Street. That would solve the problem…
So what about the problem that Wall Street might have too much influence in Washington? I understand the concern. I just think the experience those individuals bring might outweigh their allegiance to big finance.
I have a few comments. First, Indiviglio’s remarks are not terribly surprising given that before journalism, his bio says, “Daniel spent several years as an investment banker and consultant for financial services firms. Before that, he graduated from Cornell.” He’d fit in well with Obama’s economic team.
Second, his argument is a total straw dog, most preposterously when he suggests that even noting the Obama team’s ties to financial firms is tantamount to calling for a ban on government employment by former Wall Streeters. It’s an easy argument for Indiviglio to shoot down but since no one, including Bloomberg, has proposed anything like that, he needn’t have bothered.
Third, the problem is not that members of Obama’s economic team have ties to Wall Street, it’s that so many of them have ties to Wall Street, especially key advisers shaping policy. To think that their experience and background doesn’t impact their view on policy — and, yes, their allegiances — is naive in the extreme. FDR’s cabinet had conservatives and populists, corporatists and trust-busters. The problem with Obama’s team is the ideological and political consensus they share and the lack of any real counterweight.
More from Ken Silverstein:
Commentary — November 17, 2015, 6:41 pm
The Clintons’ so-called charitable enterprise has served as a vehicle to launder money and to enrich family friends.
Freddie Gray’s relatives arrived for the trial in the afternoon, after the prep-school kids had left. By their dress, they seemed to have just gotten off work in the medical and clerical fields. The family did not appear at ease in the courtroom. They winced and dropped their heads as William Porter and his fellow officer Zachary Novak testified to opening the doors of their police van last April and finding Freddie paralyzed, unresponsive, with mucus pooling at his mouth and nose. Four women and one man mournfully listened as the officers described needing to get gloves before they could touch him.
The first of six Baltimore police officers to be brought before the court for their treatment of Freddie Gray, a black twenty-five-year-old whose death in their custody was the immediate cause of the city’s uprising last spring, William Porter is young, black, and on trial. Here in this courtroom, in this city, in this nation, race and the future seem so intertwined as to be the same thing.
Minimum number of cats fitted with high-tech listening equipment in a 1967 CIA project:
Zoologists suggested that apes and humans share an ancestor who laughed.
A former prison in Philadelphia that has served as a horror-movie set was being prepared as a detention center for protesters arrested at the upcoming Democratic National Convention, and presumptive Republican presidential nominee Donald Trump fired his campaign manager.
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“Matt was happy enough to sustain himself on the detritus of a world he saw as careening toward self-destruction, and equally happy to scam a government he despised. 'I’m glad everyone’s so wasteful,' he told me. 'It supports my lifestyle.'”