Speaking only of Geithner, it’s not fair to blame him for accepting such an offer. After all, he seems to have been an honest and effective servant of government for us for many years. In those roles, he certainly sacrificed the opportunity to potentially make a great deal more money working for firms such as Goldman Sachs or Warburg Pincus.
So, what’s wrong with the type of development?
It is my opinion that we should have a “cooling off” period of at least 5 years between anyone working in key government positions and their taking positions in entities which they essentially supervised or governed in their previous roles. It would be hard to argue that a large private equity fund was not a matter of concern for the head of the NY Fed or the Treasury Secretary. If he took a job as head of a wind power firm, that would be another matter, as an example.
Why is this important? Because the cozy relationship between our government and and the powerful business entities they presume to govern is dangerous. We need an “arms length” assurance that there will not be any favoritism given any such entities, such as to potentially lead to powerful jobs later offered to those who are beneficial to their interests while in key government positions.
Similarly, those who occupy high positions in private industry should not be considered for positions in government involving oversight to those same industries, until after a cooling off period of perhaps 5 years. That’s because they can’t generally be considered to be impartial in their oversight.
Even more so, this kind of rule should apply to the lobbying industry–too many of our government officials leave and join a lobbying firm focused on the same area they governed. These former officials have strong relationships inside the agency they supervised and have the ability to influence in favor of the industry when they leave. This is inappropriate. In fact, in the case of government officials going to lobbying firms which were among those under the federal jurisdiction of the official, I believe this should simply be prohibited. A cooling off period is not enough in such cases.
It’s not the job of the American public to determine whether either of these situations indeed results in favoritism. That’s pretty hard to determine, anyway. We need rules like this just to assure that there is not the temptation of such between government and business.
These are not new ideas–this is just a reminder to all of us that we need them enacted. Resistance from powerful interest groups is strong. This type of cronyism is a piece of the big picture which has exacerbated inequality in our country across the last 30 years.