Last Friday afternoon, in a typical bad-news dump, the Obama administration released information about the earnings of certain top officials and their connections to Wall Street firms at the center of the financial crisis, some of which are receiving government bailouts. Heading the list was Larry Summers, who received more than $8M from a hedge fund and speaking fees from a number of financial firms. So what’s wrong here?
For starters, as Stephen Moore argues, the huge payments in the year running up to the election create, at the very least, the appearance that these firms were currying favor with Summers because he was headed for the Obama administration. Perhaps it would help to know how many hours he spent working to earn that $8M.
Moreover, this revelation flies in the face of the Obama populist rhetoric and tut-tutting that all of these firms behaved irresponsibly in their compensation practices. Was it irresponsible to give millions to Summers? Perhaps Summers should give back the money as a sign of good faith (as they demanded of the AIG execs). Just how convincing is the call for government regulation of the greed-mongers, coming from a team that collected their loot before deciding it was improper and excessive?
And finally, it would be interesting to know whether these people received ethics waivers. After all, millions and millions were collected by Summers, Carol Browner, James Jones, etc. from firms and industries that now fall within their purview. One has to question what Swiss cheese system of rules allows all these people to slip through to their current positions.
All in all, this development should temper some of the Obama’s administration’s over-the-top vilification of business. But it won’t. It was the other guys who were greedy and irresponsible with other people’s money.