From Wall Street to Washington: Shameful... or Brazen?
The new president has duly denounced the revelations of lavish holiday bonuses awarded to Wall Street types whose companies are slopping at the federal trough. “Shameful,” he says, sounding all the right populist notes. But has he inquired about the bonuses some of his administration’s new appointees got?
Heck, even if they didn’t get bonuses, these Wall-Street-to-Washington transfers are another sign of the endemic legalized corruption I wrote about earlier this week. These appointments are brazen.
No sooner did the new president announce new rules aimed at limiting the influence of lobbyists than he made an exception for Treasury Secretary Tim Geithner’s chief of staff. It looks as if the job will go to Mark Patterson, who up until last year was a lobbyist for none other than Goldman Sachs. “The Obama administration’s limitation on lobbyists isn’t a direct ban,” explains ABC News. “Lobbyists are still allowed to be a part of the administration working on areas that they have not lobbied on.” Seeing as Goldman’s tentacles extend so far into both the financial sector and government alike, one wonders if Patterson will have much to do if the administration keeps its word.
Meanwhile, the new president’s choice to be White House counsel for economic affairs is Neal Wolin. He wasn’t a lobbyist, but his last gig was division president at The Hartford, a company that happens to be seeking as much as $3.4 billion of TARP money. Pressed to respond to this conflict of interest, a White House flack says, “Neal has unparalleled experience in dealing with financial issues as a lawyer in both government and the private sector,” echoing the administration’s defense of Geithner and his back-taxes baggage. “We are fortunate to have [Wolin’s] counsel in this time of financial crisis. It is unlikely he will have any need to address the Hartford specifically in his work in the White House, and if he does he will recuse.” Seeing as The Hartford is tied up intimately with the ongoing train wrecks of AIG, Fannie Mae, and Freddie Mac (not to mention Lehman), Wolin too might spend a good part of the day twiddling his thumbs if the administration keeps its word.
Speaking of the administration keeping its word, Bloomberg is about to put that commitment to the test. Shortly after taking office, the new president ordered federal agencies “to adopt a presumption in favor of disclosure” when confronted with requests filed under the Freedom of Information Act. Now Bloomberg has filed a FOIA request of Treasury to disclose exactly what sort of rotten assets it agreed to back in its most recent bailouts of Citi and Bank of America.
Will Treasury go along? Or will the new crowd of Robert Rubin acolytes circle the wagons? We shall see.
Update: Proving that certain lefties still have something to contribute to economic discourse under the new political order, Dean Baker poses a couple of good questions: 1) Now that Fannie has been nationalized, couldn’t Obama do something about the $160k yearly payouts to its directors? 2) Why did Democrats in Congress reject proposals to limit executive pay in the TARP legislation? For that matter, if it’s that big a deal to the new president, he could have voted against the bill in the Senate on those grounds. He did not. And Bill weighs in on the matter here.