I think James Fallows started this discussion in An Unfortunate Decision by Peter Orszag. "But another category, which I think is even more important, involves things that everyone 'knows' but has stopped noticing. This is very similar to what is called 'Village' behavior in the big time media. An item in this second category has just come up: the decision of Peter Orszag, until recently the director of the Office of Management and Budget under Barack Obama, to join Citibank in a senior position. Exactly how much it will pay is not clear, but informed guesses are several million dollars per year. Citibank, of course, was one of the institutions most notably dependent on federal help to survive in these past two years. Objectively this is both damaging and shocking. "
Will Wilkinson from The Economist followed up with Our Peter Orszag Problem and doesn't really have a good answer of what to do about it. "The classically liberal answer is to make government less powerful. The monstrous offspring of entangled markets and states can be defeated only by the most thorough possible separation. But public self-protection through market-state divorce can work only if libertarians are right that unfettered markets are not by nature unstable, that they do not lead to opressive concentrations of power, that we would do better without a central bank, and so on. Most of us don't believe that. Until more of us do, we're not going far in that direction. And maybe that's just as well. Maybe it's true that markets hum along smoothly only with relatively active government intervention and it's also true that relatively active government intervention is eventually inevitably co-opted, exacerbating rather than mitigating capitalism's injustices. Perhaps the best we can hope ever to achieve is a fleeting state of grace when fundamentally unstable forces are temporarily held in balance by an evanescent combination of complementary cultural currents. This is increasingly my fear: that there is no principled alternative to muddling through; that every ideologue's op-ed is wrong, except the ones serendipitously right. But muddle we must."
Ezra Klein then picked up the thread in Orszag and Citigroup. As to the why he writes "Orszag is fairly wealthy already, and his lifetime of public service positions does not suggest a man particularly motivated by income. Rather, I think people are underestimating the lure of the job itself. Orszag has gone as high as he's likely to go in government, and he's 41 years old. The guy isn't done, but there's not much more for him in Washington." This position could lead to president of Citibank.
He goes on to say "The problem is less why Orszag wanted to go to Citigroup than why Citigroup wanted to hire Orszag." Orszag is apparently brilliant and principled. "He's someone who could've cashed out long ago but instead worked his way up through the government and was then instrumental in designing and passing a series of bills that will make the country a much better place."
"But the problem isn't what he intends to do, and it's not even what he actually does. Federal law bars Orszag from even contacting his former colleagues as part of this job, at least for a few years. The problem is what it will make the public think. Orszag now becomes part of a long list of public servants whose subsequent career decisions make people trust the government less. Maybe that conclusion is incorrect on their part, but it's not unfair."
He has difficultly coming up with another job for Orszag to have taken and follows up on that thought in What should public servants do after government? "My hunch is that this is fundamentally because of money. If the public thought that expertise was the actual good being provided, they wouldn't mind very much. But the trail of cash suggests...the market isn't for people who can navigate the government. It's for people who know how to bribe it. In some cases that's true and in some cases it isn't. But since it affects the public's view of most all cases, I think it has the perverse effect of unleashing former government employees to make more crass occupational choices, as everyone is getting painted with the same brush anyway."
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