Washington Babylon — October 14, 2009, 12:47 pm

Obama’s Gourmet Kitchen Cabinet

From Bloomberg:

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.

Share
Single Page

More from Ken Silverstein:

From the November 2013 issue

Dirty South

The foul legacy of Louisiana oil

Perspective October 23, 2013, 8:00 am

On Brining and Dining

How pro-oil Louisiana politicians have shaped American environmental policy

Postcard October 16, 2013, 8:00 am

The Most Cajun Place on Earth

A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits 

Get access to 164 years of
Harper’s for only $45.99

United States Canada

CATEGORIES

THE CURRENT ISSUE

May 2015

Black Hat, White Hat

= Subscribers only.
Sign in here.
Subscribe here.

Beyond the Broken Window

= Subscribers only.
Sign in here.
Subscribe here.

In Search of a Stolen Fiddle

= Subscribers only.
Sign in here.
Subscribe here.

Displaced in the D.R.

= Subscribers only.
Sign in here.
Subscribe here.

The Quietest Place in the Universe

= Subscribers only.
Sign in here.
Subscribe here.

view Table Content

FEATURED ON HARPERS.ORG

Post
“Don sucked the last of his drink through his straw and licked his lips. 'The coast, to me, is more interesting than the valley.'”
Photograph by the author
Article
Fred Morton, who died this week in Vienna, at the age of 90, was a longtime contributor to Harper's Magazine and a good friend. "Othello's Son," which was listed as a Notable Essay in Best American Essays 2013, appeared in our September 2013 issue.
Photograph © Alex Gotfryd/CORBIS
Article
Beyond the Broken Window·

= Subscribers only.
Sign in here.
Subscribe here.

“By the time Bratton left the department, in 2009, Los Angeles had quietly become the most spied-on city in America.”
Illustration by Taylor Callery
Article
Displaced in the D.R.·

= Subscribers only.
Sign in here.
Subscribe here.

“How is it possible that my birth certificate is invalid if I was born here?”
Photograph by Pierre Michel Jean
Article
The Quietest Place in the Universe·

= Subscribers only.
Sign in here.
Subscribe here.

“Gaitskell and his colleagues are approaching the revelation of a new order, a new universe, in which even light will be known differently, and darkness as well.”
Painting by Sebastiaan Bremer

Number of African countries with vaccination rates higher than that of the United States:

16

Iowa urologists reported that only a minor portion of locker-room teasing arises from “the presence of excess foreskin”; most teasing targets small penises.

A farmer in Surrey, England, was ordered by the Reigate and Banstead Borough Council to tear down his cannon-equipped castle, which he had built secretly and then concealed behind hay bales.

Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!

HARPER’S FINEST

Subways Are for Sleeping

By

“Shelby is waiting for something. He himself does not know what it is. When it comes he will either go back into the world from which he came, or sink out of sight in the morass of alcoholism or despair that has engulfed other vagrants.”

Subscribe Today