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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:
Perspective — October 23, 2013, 8:00 am
How pro-oil Louisiana politicians have shaped American environmental policy
Postcard — October 16, 2013, 8:00 am
A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits
I recently spent a semester teaching writing at an elite liberal-arts college. At strategic points around the campus, in shades of yellow and green, banners displayed the following pair of texts. The first was attributed to the college’s founder, which dates it to the 1920s. The second was extracted from the latest version of the institution’s mission statement:
The paramount obligation of a college is to develop in its students the ability to think clearly and independently, and the ability to live confidently, courageously, and hopefully.
Let us take a moment to compare these texts. The first thing to observe about the older one is that it is a sentence. It expresses an idea by placing concepts in relation to one another within the kind of structure that we call a syntax. It is, moreover, highly wrought: a parallel structure underscored by repetition, five adverbs balanced two against three.
Percentage of Britons who cannot name the city that provides the setting for the musical Chicago:
An Australian entrepreneur was selling oysters raised in tanks laced with Viagra.
A naked man believed to be under the influence of LSD rammed his pickup truck into two police cars.
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“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.”