Public service -- should we do more to encourage people to participate in it? Absolutely, yes. America's strength is derived from a citizenry of diverse talents, histories and backgrounds, and when they come together to place a hand on the tiller of this great enterprise, our nation can accomplish amazing things.
So wouldn't it be great if we could get more people from Wall Street to take government jobs? Whoa, hold up now -- that's a different question entirely, you guys!
Obviously. To most Americans.
The boards of Wall Street’s biggest banks recently received a letter posing a provocative question.
Why, the letter asked, do banks routinely pay out special compensation packages to executives who leave to take government jobs when those packages were intended to retain them?
“Unless the position of these companies is that this is just a backdoor way to pay off a newly minted government official to act in Wall Street’s private interests rather than the public interest, it is very difficult to see how these policies promote long-term shareholder value,” the letter declared.
Sorkin says the letter in question was penned by the AFL-CIO's investment director, Heather Slavkin Corzo, although the organization notes that it was sent by its president, Richard Trumka. The labor union federation perceives this system of compensation as one that isn’t in financial sector shareholders' best interests and which just might foster a teensy bit of corruption. You see, when an investment bank like Lazard tells executive Antonio Weiss that it will happily hand him a cool $20 million if he's fortunate enough to secure a top Treasury Department post, it suggests that Lazard explicitly understands that this future arrangement will be of some exclusive benefit to, first and foremost, Lazard. Otherwise, it would not make such a significant investment in Mr. Weiss’ future as a Treasury bureaucrat. The Trumka letter identifies this arrangement as one that could potentially do harm to both shareholders and country.
This isn’t hard. It should not take folks like Corzo and Sen. Elizabeth Warren (D-Mass.) to point out what is baldly obvious: Lazard is offering Weiss a retention package because the firm expects to retain his services, even as he goes to work at the U.S. Treasury.
But, as you might surmise, Sorkin greets the news of this $20 million without even a trace of secretion from his skepticism gland:
While this topic may make for juicy headlines about the “revolving door,” the A.F.L.-C.I.O. and others seem to be deliberately overlooking important issues, and the entire debate appears to be based more on a populist shakedown than on good public policy.
Let’s start with a basic question: Do we, as a country, want our most highly qualified employees from the private sector to pursue public service?
The answer, I would imagine, should be yes.
The idea that someone is performing a “populist shakedown” is, in and of itself, adorable. Generally, a “shakedown” is a crime in which a person of ill repute takes something from another person using the threat of violence. The word is used metaphorically to describe bills that lawmakers introduce to generate campaign contributions, without any intention of actually enacting those bills. But it's always used to talk about someone taking stuff that she has no legitimate claim to.
How does the AFL-CIO stand to benefit from this supposed "shakedown"? Well, as citizens, union members might hope to get a Treasury Department that isn't beholden to the whims of Wall Street banks! But do they stand to gain financially, in the traditional sense of the word "shakedown"?
Why yes, they do! But the way they do cancels out Sorkin's slur entirely. The AFL-CIO owns stock in banks -- all seven of the banks, in fact, that received a letter from the AFL-CIO about Weiss and public service "bonuses." The AFL-CIO is, in other words, a partial owner of the companies in question. That's why Corzo and Trumka could submit shareholder proposals on this issue to Citigroup and Morgan Stanley. And it makes the shakedown metaphor rather curious, since you cannot steal something from yourself.
Now if we’re being realistic, it must be said that shareholder activism has a terrible track record on changing America or altering the landscape of power. Shareholders, after all, often reap the rewards of corporate management's rapacious behavior.
By bashing a letter from a shareholder as a "populist shakedown," however, Sorkin is suggesting that corporate executives ought to be immune not only from the demands of the public at large, but even from the demands of their very owners. He's arguing that the interests of CEOs and top corporate performers be placed above the petty requests of even the people who ostensibly pay their salaries. It's a call to eradicate the inconveniences of democratic governance in the name of elite management.
And in this respect, Sorkin's disrespect for shareholder accountability is perfectly consistent with his disdain for political governance more generally. Bankers only. Peasants need not apply.
The issue goes beyond Weiss himself. The AFL-CIO's financial team may have noticed a trend. Stefan Selig received more than $9 million from Bank of America after he left for an international trade post at the Department of Commerce, while Michael Froman took home over $4 million from Citigroup when he became the U.S. trade representative.
Here’s the thing: Everyone wants “our most highly qualified” citizens involved in public service. Some of us just reject the notion that Antonio Weiss meets the standard of “most highly qualified.” And we submit that Sorkin seems insufficiently open to the possibility that a human being of greater qualification might exist or that there may be someone equally qualified who is not an obvious agent of regulatory capture.
What exactly, the public might ask, qualifies Weiss to be the Treasury Department's top financial guru? He makes a lot of money working at a bank, so that’s good enough for Sorkin. Frankly, it’s good enough for most Beltway elites as well.
Most, but not all. Sen. Warren has laid out a bill of particulars to argue that Weiss lacks the necessary attributes to do the job to which he’s been nominated. Broadly, she suggests that Weiss’ “career working on international transactions” makes him a poor choice to serve as the Treasury’s domestic economic manager. More incisively, she points to the role that Weiss played in engineering the tax-dodging inversion merger between Burger King and Canadian coffee-and-doughnut concern Tim Hortons.
Sorkin is not convinced that the Burger King/Tim Hortons deal stands as an example of a “cynically constructed deal” to avoid taxes. Of course, it’s not clear that Sorkin finds any such deal to be cynical, given that he has previously depicted such tax-dodgers as deeply reluctant, noble patriots acting out of woebegone desperation.
That’s all well and good for a New York Times Dealbook columnist, but it becomes more problematic if the Obama administration shares the same pathology. Especially when you consider how self-defeating it is for a president whose daily battle to get his congressional opposition to accede to any revenue-raising, agenda-funding tax policy has been as epic as Barack Obama’s has. To turn around and enshrine an expert in tax-dodging to run the domestic economy from Treasury would seem to be a splendiferously surreal decision, until you consider one thing that Sorkin points out about Weiss: He’s a “staunch supporter -- and campaign donation bundler -- for President Obama." (Sorkin -- God only knows why -- presents this information as a reason to be less skeptical of this appointment. To which we say, “#SMDH.”)
In fairness to Weiss, he is cut from the same cloth as many of those who previously held the position of Treasury's undersecretary for domestic finance. During the George W. Bush administration, we had such stalwarts as AIG’s Brian Roseboro, Goldman Sachs’ Robert Steel and Davis Polk lawyer Randal Quarles. These folks sure did an outstanding job applying their elite expertise to protecting America from financial apocalypse. The Obama administration, for its part, went straight to the same well in filling that position with T. Rowe Price’s Mary Miller.
With that in mind, here is something worth considering: Perhaps the average Wall Street executive is spectacularly unqualified to serve in government.
Doesn't it feel good to just consider this as a possibility? The tension just leaves the body.
And for good reason! After all, the recent track record of Wall Streeters-- coming within a hair’s breadth of destroying the global economy and demonstrating an inability to show either remorse for their mistakes or gratitude toward the millions of American taxpayers who donated their money to preserve the financiers' businesses and lifestyles at the expense of any number of initiatives that might have benefited the country -- speaks for itself. (It’s not like those who previously made their way from the Financial District to Capitol Hill exactly covered themselves in glory, either.)
Based on this record of performance, if there’s an argument for Wall Streeters to sign up for public service, it would be founded in the idea that they owe America a tremendous debt, which they should pay off in a demonstration of sufficient humility. There’s really not a place in that scenario for seven-figure paydays.
And really, doesn’t this $20 million compensation package that Lazard is lining up for Weiss’ goodbye party just give away the game? People aren’t supposed to go into public service because they’re seeking to move up the ranks of plutocratic society. Public service is about duty. It’s about serving something larger than yourself. It’s about forfeiting some short-term personal ambitions to play a role in maintaining America’s greatness. It's about service and sacrifice, not about pocketing a private-sector windfall.
To be dead honest, the biggest reason Weiss is unqualified for this nomination is that a guy who aids and abets tax-dodgers, and who needs $20 million of Lazard’s boodle before he’d consider serving, just doesn't love his country enough. Let's find someone who does!