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LUCKY LARRY?
Dan Froomkin points us towards the Obama administration's Friday night document dump, which featured the recent financial histories of many key White House advisers, including one Larry Summers.
Summers, you'll recall, was appointing to a White House position and thus didn't see his recent financial history combed over by the Senate Finance Committee's tax lawyers. So, unfortunate though it is, we may never know if slight tax errors lurk in his past returns. He could have a lien somewhere!
But the White House requires disclosure forms showing income streams, and so we now know that in 2008, Summers received more than $5 million from the hedge fund D.E Shaw and more than $2.7 million in speaking fees from other Wall Street firms -- including $135,000 for a single appearance before Goldman Sachs. These are sums that would make Tom Daschle positively blush, and they likely would have posed a serious threat had Summers been named Secretary of the Treasury.
But he wasn't. Summers was named to the White House staff rather than sent to the Senate to be confirmed as a cabinet official. These disclosures may thus prove an embarrassment, but probably little more than that. The emerging precedent deserves attention, though. Summers, we now know, might have been lost to an actual confirmation process. Daschle would have been saved had he simply been named to the Office of Health Reform (a White House staff position with no confirmation fight). Going forward, we may increasingly see a situation in which the real heavyweights and key players are named to the White House staff while the actual agencies are given to less influential and impressive administrators who are sure to easily pass Senate confirmation.
You could see that having a couple different effects. Cleaving influential advisers from actual bureaucratic authority is the sort of thing that leads fairly quickly towards power struggles. On the other hand, maybe it's better for agency administrators to focus on agency policy rather than national affairs. Either way, it's not a change that's being discussed in our political system so much as compelled by the auditors on the Finance Committee and the fact that government officials now commonly go to work for the industries they were once charged with regulating.
COMMENTS (11)
What would happen if prominent liberal bloggers actually took a stand on these issues, rather than just engage in the DC inside baseball?
Hello? Anyone mining the store?
Posted by: Anonymous | April 6, 2009 11:34 AM
Yeah, Ezra seems more absorbed by the exciting process effects of this issue than disturbed by the idea that our leaders have "earned" millions by battening on the very industries they're now in charge of regulating. Once upon a time, liberals found this kind of thing troubling. Now, not so much.
Posted by: scott | April 6, 2009 11:43 AM
I'm more troubled by Summers accepting a $135K speech fee than by the fact that bribe/fee was offered. No speech of any length is 'worth' that amount, so attributing bad motives is completely acceptable.
I don't mind if FORMER officials get large speaking fees after they are old and off the roster as future officeholders. Public service doesn't pay comparably to the private sector, so let them mine the salt after its over. Even Bush, if someone wants to overpay him.
BUT, no person who even has a gleem of desire to work in public office in the future should even consider such payoff-in-advance bribes.
Summers should resign and publicly recant.
Posted by: JimPortlandOR | April 6, 2009 11:55 AM
The process effects are important. Somewhere along the way, "process" became a term of derision, but how things work actually matters, and isn't the sort of thing that gets sufficient coverage.
As for Summers, I think the disclosures are troubling and unsurprising. I don't know what should be done about them. I'm not sure it's a good idea to cut the heart out of the admin's economic team at this particular moment. In other words, I have complicated feelings on this, which will be made more clear in a later post.
Posted by: Ezra | April 6, 2009 12:18 PM
JimPortlandOR: I don't mind if FORMER officials get large speaking fees after they are old and off the roster as future officeholders.
Easy enough for Obama to fix - just fire Summers so he can (once again) be a former official.
As it is the man seems to be lauded as a genyus for having been wrong about every major policy issue in his career - including his opposition to regulating CDS's.
Its obvious from his actions that he's in bed with Wall Street. This latest disclosure simply makes that even clearer.
Posted by: alex | April 6, 2009 12:20 PM
I don't deny there are important process issues here, but the issues that kinda jumped out at me (potential corruption, conflict of interest, cognitive or interest group "capture," call it what you will) seemed to be getting short shrift. If you're going to remedy the omission, more power to you!
Posted by: scott | April 6, 2009 12:23 PM
Ezra: I'm not sure it's a good idea to cut the heart out of the admin's economic team at this particular moment.
Even though his economic team is failing miserably? (as in helping the perpetrators instead of the victims).
Posted by: alex | April 6, 2009 12:23 PM
To JimPortlandOR: It may be worse to allow former officials to receive large bribes speaking fees. If you think of any service position, such as a waiter, maid, barber, etc., the possibility of a nice tip afterward is the supposed inticement for better service. This exact same concept would seem to apply to many of those in promenent government positions. I don't see how to make it illegal, as everyone should have the ability to work and generate income if they so desire (I'm speaking about after they leave office, mind you).
Posted by: Tom Cole | April 6, 2009 7:07 PM
Here's an easy answer:
Simplify the tax system!
Although I don't remember Republican administrations have this much trouble finding people who paid their taxes.
Democrats are to taxes what Republicans are to draft deferments and homosexuality. The hypocrisy among Washington officials is incredible.
Posted by: Adam Herman | April 7, 2009 2:00 AM
Summers scares the shit out of me. Not a man I would trust with any degree of power.
Posted by: Ed | April 7, 2009 4:13 AM
Come the revolution, the masses will deal with Lucky Larry and with Turbo Tax Timmy, Rubin, Helicopter Ben, Hanky Pank Paulson, The Maestro, Farting Phil Gramm, Bernie Madoff, and all the rest of the schmucks and fucks that have betrayed the peoples of the world with their naked greed and idiocy and lust for power. It will be a fearsome display of righteous indignation and the emancipatory human spirit against the slave masters who have shackled the world to unimaginable debt, poverty, and misery.
Posted by: Marat | April 7, 2009 10:27 AM