In the Arena

Orszag Zigs into Citibank

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Ugh. Peter Orszag–Obama’s former budget director and one of the smartest domestic policy wonks I know–has taken a job with Citibank, one of the least reputable corporations I know. Jim Fallows is appropriately appalled. Unlike Jim, I know Orszag pretty well and have learned a lot from him. But this move only reinforces my growing sense that the Democratic party has to pry control of its economic policy away from the Wall Street caucus–the Rubin, Summers, Geithner, Rattner and now Orszag etc. gang. I am sure they have had real value as policy-makers, but they’ve had real blind spots as well.

Their blind spots have to do with the workers who once constituted the Democratic party’s base, but who now, with their manufacturing jobs gone, have lost their faith in government and find it easier to vote their anger–against one party, then the next–than to vote for anything or anyone. The Wall Streeters know the bond market intimately; they don’t spend much time thinking about how to improve life for the vast swath of Americans who have suffered the mergers-and-acquisitions, the leveraged-buy-outs, the private equity hoggery, the CDO and CDS’s  and all the other financial gimmicks of the last 40 years.

This is not an argument against free trade–though it’s certainly an argument in favor of the sort of tough negotiating the President recently did with the South Koreans on the new trade pact. It’s also not an argument for massive wealth redistribution–though a return to the Clinton tax rates of the 1990s, plus a stiff tax on financial derivative transactions, would be nice. It’s an argument for consciousness, for carefully considering the impact of any new piece of legislation on the middle class (including small businesspeople), for those people who don’t come equipped with their own personal lobbyists.

And it’s a hope that the financial policy wonks in the Democratic Party will control themselves a little–and eschew the big bucks–as they slide out the revolving door.