Obama's Favorite Wall Streeters
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We’ve already made our choice for the best headline of the year, so far: “Citigroup Replaces JPMorgan as White House Chief of Staff.”
When we saw it on the website Gawker.com we had to smile — but the smile didn’t last long. There’s simply too much truth in that headline; it says a lot about how Wall Street and Washington have colluded to create the winner-take-all economy that rewards the very few at the expense of everyone else.
The story behind it is that Jack Lew is President Obama’s new chief of staff — arguably the most powerful office in the White House that isn’t shaped like an oval. He used to work for the giant banking conglomerate Citigroup. His predecessor as chief of staff is Bill Daley, who used to work at the giant banking conglomerate JPMorgan Chase, where he was maestro of the bank’s global lobbying and chief liaison to the White House. Daley replaced Obama’s first chief of staff, Rahm Emanuel, who once worked as a rainmaker for the investment bank now known as Wasserstein & Company, where in less than three years he was paid a reported eighteen and a half million dollars.
The new guy, Jack Lew – said by those who know to be a skilled and principled public servant – ran hedge funds and private equity at Citigroup, which means he’s a member of the Wall Street gang, too. His last job was as head of President Obama’s Office of Management and Budget, where he replaced Peter Orzag, who now works as vice chairman for global banking at – hold on to your deposit slip — Citigroup.
Still with us? It’s startling the number of high-ranking Obama officials who have spun through the revolving door between the White House and the sacred halls of investment banking. Sure, you can argue that it makes sense that the chief executive of the nation would look to other executives for the expertise you need to build back from the disastrous collapse of the banks in the final year of the Bush Administration. Remember — it was Bush and Cheney with their cronies in big business who helped walk us right into the blast furnace of financial meltdown, then rushed to save the banks with taxpayer money. That little fact seems to have been overlooked in the current primaries.
All this brings back memories of Hank Paulson, doesn’t it? Hank Paulson, the $700 million man who became secretary of the treasury for President Bush. Paulson had been head of Goldman Sachs, the rich investment bank. As his successor at Goldman Sachs, Paulson chose Lloyd Blankfein. Several times, according to Bloomberg News, Rolling Stone, and Paulson’s own memoir, the treasury secretary made sure Blankfein and Goldman got privileged inside information.
But Bush and Cheney aren’t the only ones to have a soft spot for financiers. President Obama may call bankers “fat cats” and stir the rabble against them with populist rhetoric when it serves his interest, but after the fiscal fiasco, he allowed the culprits to escape virtually scot-free. When he’s in New York he dines with them frequently and eagerly accepts their big contributions. Like his predecessors, his administration also has provided them with billions of taxpayer dollars – low-cost money that they used for high-yielding investments to make big profits. The largest banks are bigger than they were when he took office and earned more in the first two-and-a-half years of his term than they did during the entire eight years of the Bush administration. That’s confirmed by industry data.