CRONY

by Russ Roberts on December 1, 2010

in Financial Markets

Bloomberg reports:

Citigroup Inc., recovering from its $45 billion bailout in 2008, is in advanced talks to hire former White House Budget Director Peter Orszag, people with knowledge of the matter said.

Orszag, 41, may take a job in the New York-based firm’s investment-banking division, the people said, declining to be identified because the discussions are private. An announcement may come as early as today, one of the people said.

Notice that he’s going to take “a job.” It doesn’t tell us what kind of job because it doesn’t really have to. The important thing is that he’s on the payroll. What skills does he bring to the table? He’s a smart guy but one thing he brings is his ability to call people in the White House and the Fed and have them return his call.

Here are a few more cronies:

His successor as budget director, Jacob Lew, worked at Citigroup from 2006 to 2009.

Calls and e-mails to Orszag weren’t immediately returned. Citigroup spokeswoman Danielle Romero-Apsilos said she couldn’t comment.

Before joining the White House as director of the Office of Management and Budget, Orszag was director of the Congressional Budget Office and a senior fellow at the Brookings Institution.

He previously served as economic adviser to President Bill Clinton and was a staff member of Clinton’s Council of Economic Advisers.

Orszag’s tenure at the Clinton White House overlapped with Citigroup’s former executive-committee chairman, Robert Rubin, who served as Treasury secretary from 1995 to 1999. In 2006, when Rubin, 72, helped to found an economic research group at the Brookings Institution called the Hamilton Project, Orszag was named its first director. Obama, then a senator from Illinois, spoke at the project’s unveiling.

Rubin, who in late 2007 helped oversee the search that led to the appointment of Vikram Panditas chief executive officer, retired from Citigroup last year.

Citigroup repaid $20 billion of its bailout money last year and the rest was converted into stock. The Treasury Department still owns 11 percent of the bank’s shares.

As Arnold would say: have a nice day.

I am increasingly pessimistic about the fake nature of Wall Street as part of the capitalist system. It is part of the crony capitalist system. I am ashamed at how long it has taken me to notice this. But once you start paying just a bit of attention, it’s hard not to notice.

Be Sociable, Share!

Comments

comments

134 comments    Share Share    Print    Email

Previous post:

Next post: