It pays to walk through the revolving door.

When someone associated with a company gets appointed to a government post, that company sees a boost in its stock price, according to an analysis of defense contractors by two Swiss economists. And the bump isn’t minor. On average, the companies’ stock prices increase by 0.82 percent on the first day after the announcement and 0.84 percent on the second day.

Companies also get a boost when the door swings the other way. After a prominent person working in government is appointed to a firm, the company’s stock price sees a 0.79 percent boost immediately and a 1.05 percent boost two days following the announcement, the study found.

The report isn’t the first to call attention to the cozy relationship between business and Washington. Neil Barofsky, the former watchdog of the financial crisis bailouts, derided the Obama and Bush administrations for allowing close relationships with Wall Street that he says influenced the terms of the bailout.

That revolving door has raised questions about whether Washington is more responsive to the needs of big business than ordinary Americans. Gary Gensler, the head of the Commodity Futures Trading Commission, worked at Goldman Sachs for 18 years before starting his career as a public servant. Jacob Lew, President Obama’s chief of staff, had a stint at Citigroup in between various government appointments. His predecessor Bill Daley worked at JPMorgan Chase before becoming chief of staff.

Even beneficiaries of the close relationship between Washington and business have criticized that relationship. Charles Koch, the CEO of Koch Industries, has derided what he describes as crony capitalism -- or the way the government subsidizes various businesses -- as a “destructive force.”

But as the recent study notes, it’s not only subsides and tax breaks that can come from the revolving door. A company’s stock price is often boosted as well. That increase is usually bigger when the announcement is connected to the Democratic Party, the study found.

(Hat tip: The Washington Post)

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  • Gary Gensler

    Before starting his career in public service, Commodity Futures Trading Commission chairman Gary Gensler spent <a href="http://www.cftc.gov/About/Commissioners/GaryGensler/index.htm" target="_hplink">18 years working at Goldman Sachs</a>. Gensler's work at Goldman has gotten him into some hot water as the top futures industry regulator. After MF Global imploded into bankruptcy on his watch, losing millions in customer funds, Gensler recused himself from the probe, citing his history at Goldman with Jon Corzine, MF Global's ex-CEO. <a href="http://www.huffingtonpost.com/2011/12/02/cftc-mf-global-senators_n_1125231.html" target="_hplink">Senators blasted Gensler</a> and accused him of trying to "avoid the heat."

  • Henry Paulson

    Before serving as secretary of the Treasury under George W. Bush, Henry Paulson <a href="http://articles.chicagotribune.com/2011-06-30/business/ct-biz-0630-confidential-paulson-20110630_1_treasury-post-henry-paulson-goldman-sachs" target="_hplink">spent 22 years at Goldman Sachs</a>, eventually assuming the position of CEO. Paulson's ties to Goldman followed him to his new job: On multiple occasions in 2008, Paulson met with Goldman executives in informal contexts and <a href="http://blogs.reuters.com/felix-salmon/2009/10/20/the-secret-paulson-goldman-meeting/" target="_hplink">shared his opinions about the future direction of the economy</a>. On one occasion, Paulson reportedly <a href="http://www.bloomberg.com/news/2011-11-29/how-henry-paulson-gave-hedge-funds-advance-word-of-2008-fannie-mae-rescue.html" target="_hplink">explained to at least a dozen Wall Street higher-ups</a> that the government was considering a takeover of Fannie Mae and Freddie Mac, some two months before it actually came to pass -- thus giving everyone in attendance a chance to trade profitably on that knowledge before it became public. <em>-- Alexander Eichler</em>

  • Timothy Geithner

    U.S. Treasury Secretary Timothy Geithner never worked on Wall Street, but given his close relationship with the financial industry it's not surprising many thank he has. Before assuming his post as Treasury Secretary, <a href="http://www.treasury.gov/about/Pages/Secretary.aspx" target="_hplink">Geithner was president</a> of the Federal Reserve Bank of New York, a <a href="http://www.huffingtonpost.com/2012/05/13/elizabeth-warren-jamie-dimon_n_1513528.html" target="_hplink">Wall Street regulator that's been heavily criticized</a> for its cozy relationship with the industry. In 2008, during his time as New York Fed president, Geithner became aware that banks were rigging the Libor benchmark rate and recommended that London regulators address the issue, but most of Geithner's suggestions came <a href="http://www.huffingtonpost.com/2012/07/16/tim-geithner-libor_n_1674552.html" target="_hplink">essentially verbatim from banks</a>. Now <a href="http://www.huffingtonpost.com/2012/07/11/libor-rate-scandal_n_1664737.html" target="_hplink">more than 15 banks</a> are under investigation for rate-rigging and some critics are arguing that Libor rigging is one of the biggest financial scandals of our time.

  • Jack Lew

    Jack Lew, whom <a href="http://www.huffingtonpost.com/2012/01/09/bill-daley-resigning-obama_n_1194580.html" target="_hplink">President Obama named as his new chief of staff</a> early this year, worked at Citigroup between 2006 and 2009. While there, he served as the chief operating officer of Citi's Alternative Investments unit, a division that oversaw the same kind of proprietary trading activity that the so-called Volcker Rule would later <a href="http://www.huffingtonpost.com/2011/10/11/volcker-rule-banks-proprietary-trading_n_1005627.html" target="_hplink">attempt to curtail</a>. At one point, Lew's unit invested millions in a fund run by hedge fund manager John Paulson, who made his fortune <a href="http://www.huffingtonpost.com/2010/07/14/jack-lew-obamas-omb-pick_n_645093.html" target="_hplink">speculating on the collapse of the housing market</a>. Later, during his confirmation hearing to lead the Cabinet-level Office of Management and Budget, Lew told a Senate panel that he <a href="http://www.huffingtonpost.com/2010/09/21/obama-nominee-jacob-lew-f_n_732594.html" target="_hplink">didn't "believe that deregulation was the proximate cause"</a> of the financial crisis. <em>-- Alexander Eichler</em>

  • Bill Daley

    Bill Daley, Obama's outgoing chief of staff, came to JPMorgan Chase in 2004 to serve as <a href="http://investing.businessweek.com/research/stocks/people/person.asp?personId=1339960&ticker=JPM:US&previousCapId=370857&previousTitle=Boeing Co." target="_hplink">Chairman of the Midwest Region</a>. Daley held that position until January 2011, when he departed for the White House. During Daley's time at JPMorgan Chase, the bank accepted <a href="http://www.bloomberg.com/news/2012-01-03/dimon-says-jpmorgan-grew-in-2011-amid-hostility-toward-banking-industry.html" target="_hplink">a $25 billion government bailout</a> and laid off <a href="http://money.usnews.com/money/blogs/flowchart/2010/09/17/11-firms-that-overdid-the-layoffs" target="_hplink">more than 9,000 workers in a three-year period</a>. The company has since regained its strength, reporting <a href="http://dealbook.nytimes.com/2011/10/18/bank-of-america-gives-up-its-title-as-biggest-in-u-s/" target="_hplink">$2.29 trillion in assets</a> as of late 2011, when it overtook Bank of America to become the nation's largest bank. In 2010, Daley's total earnings at JPMorgan came to <a href="http://www.bloomberg.com/news/2011-02-18/daley-got-8-7-million-in-jpmorgan-salary-stock-bonuses-in-2010.html" target="_hplink">$8.7 million</a>. <em>-- Alexander Eichler</em>

  • Mark Patterson

    Mark Patterson, <a href="http://www.treasury.gov/about/organizational-structure/Pages/patterson-m.aspx" target="_hplink">chief of staff to Treasury Secretary Timothy Geithner</a> since 2009, has been moving between politics and finance for the past decade. In 2004 he left a staff position as policy director for Senator Tom Daschle to become a vice president at Goldman Sachs. (Patterson's move to Goldman came a year after <a href="http://www.nytimes.com/2003/09/07/style/weddings-celebrations-jennifer-leete-mark-patterson.html" target="_hplink">he got married to Jennifer Leete</a>, an attorney in the enforcement division of the Securities and Exchange Commission.) While Patterson was at Goldman, his responsibilities included lobbying the federal government, and in 2007 he was part of a group of lobbyists believed to have opposed legislation sponsored by Representative Barney Frank and then-Senator Barack Obama to <a href="http://motherjones.com/politics/2009/03/geithner-aide-fought-ceo-pay-reform" target="_hplink">curb executive compensation on Wall Street</a>. <em>-- Alexander Eichler</em>

  • Peter Orszag

    Peter Orszag, who served as director of the Congressional Budget Office from 2007 to 2008 and director of the Office of Management and Budget for nearly two years after that, left the Obama administration in July 2010. In December of that year, Orszag took <a href="http://dealbook.nytimes.com/2010/12/09/ex-white-house-budget-director-joins-citigroup/" target="_hplink">an executive position at Citigroup</a>, where he's now the <a href="http://www.citigroup.com/citi/corporategovernance/profile.jsp?bio=126&type=bdc" target="_hplink">vice chairman for global banking</a> and a member of the company's Senior Strategic Advisory Group. In 2008, the U.S. government bailed out Citigroup with a $45 billion rescue package. At the time that Orszag's move to Citigroup was announced, loan interest and stock sale proceeds had converted that bailout into <a href="http://finance.fortune.cnn.com/2010/12/07/treasury-near-10-billion-citi-windfall/?iid=EL" target="_hplink">a $12 billion profit for the government</a>. -- Alexander Eichler

  • Rahm Emanuel

    Before Rahm Emanuel was mayor of Chicago or chief of staff in the Obama White House, he spent time as a managing director with the investment bank Wasserstein Perella, where he made <a href="http://money.cnn.com/2006/09/17/magazines/fortune/politics.fortune/index.htm" target="_hplink">a reported $18 million</a> in less than three years. Once he resumed his career in politics, Emanuel's ties with the business community remained strong. In 2006, when Emanuel, then a member of the House of Representatives, was chairing the Democratic Congressional Campaign Committee, sources in the financial industry contributed <a href="http://www.nytimes.com/2008/12/04/us/politics/04emanuel.html" target="_hplink">more than $5.8 million</a> to the group's midterm election efforts. And in 2008, Emanuel was <a href="http://www.opensecrets.org/news/2008/11/obamas-pick-for-chief-of-staff.html" target="_hplink">the number-one House recipient</a> of donations from the hedge funds, private equity firms and the securities and investment industry. <em>-- Alexander Eichler</em>

  • Robert Steel

    Robert Steel had a long life with Goldman Sachs before serving as the under secretary of the Treasury for domestic finance under George W. Bush. Steel <a href="http://www2.goldmansachs.com/media-relations/press-releases/archived/2002/2002-03-27.print.html" target="_hplink">came to Goldman in 1976</a> and rose to the position of vice chairman before <a href="http://today.duke.edu/2005/05/steel.html" target="_hplink">leaving in 2004</a>. As under secretary of domestic finance, Steel worked closely with then-Treasury secretary and fellow Goldman alum Henry Paulson, and <a href="http://www.washingtonpost.com/wp-dyn/content/story/2008/02/11/ST2008021102958.html" target="_hplink">acted as a frequent liaison</a> between the Treasury and the House Financial Services Committee. After leaving his Treasury post, Steel returned to finance -- serving as CEO of Wachovia, and <a href="http://money.cnn.com/2010/08/27/news/companies/Banktown_Wachovia_excerpt_Rothacker.fortune/index.htm" target="_hplink">brokering its sale to Wells Fargo in 2008</a> -- before circling back once more to public service, with a post as <a href="http://blogs.wsj.com/metropolis/2010/06/21/robert-steel-to-serve-as-new-deputy-mayor-for-economic-development/" target="_hplink">New York City's deputy mayor for economic development</a> under Mayor Michael Bloomberg. <em>-- Alexander Eichler</em>

  • Robert Rubin

    Robert Rubin, secretary of the Treasury under President Clinton from 1995 to 1999, spent time in the financial industry both before and after his political career. Rubin was at Goldman Sachs for <a href="http://news.bbc.co.uk/2/hi/business/342086.stm" target="_hplink">some 26 years</a>, <a href="http://www.cfr.org/experts/world/robert-e-rubin/b292" target="_hplink">rising to the position of co-chairman</a> before joining the Clinton administration as an assistant to the president for economic policy. Following his tenure as Treasury Secretary, Rubin was on the board of directors at Citigroup from 1999 to 2009, during which time the bank <a href="http://dealbook.nytimes.com/2011/10/31/its-lonely-without-the-goldman-net/" target="_hplink">greatly increased its risk profile</a> and ultimately had to accept a $45 billion government bailout. Rubin has been criticized for <a href="http://www.slate.com/articles/news_and_politics/chatterbox/2008/10/robert_rubins_free_ride.html" target="_hplink">not doing more to regulate the derivatives market</a>, especially the trading of credit-default swaps -- the instruments that would ultimately play a large fole in triggering the financial crisis. <em>-- Alexander Eichler</em>