[National economic council director] Deese’s wealth has also multiplied dramatically since 2009, when he took his first White House job as Obama’s special assistant for economic policy. In 2015, just a few months into his role as deputy director of the Office of Management and Budget, Deese reported owning between $81,000 and $215,000 in assets — but now, as a member of the Biden administration, he’s reported between $2 million and $7.2 million in assets. Prior to joining the Biden administration, Deese made $2.3 million in salary from the investment firm BlackRock as the Global Head of Sustainable Investing, compared to the $175,000 in salary he received during his last year as Obama’s deputy OMB director.
Blackrock is the firm that handles the Fed’s investments in private securities. Blackrock also is known for pushing progressive values onto corporations. If your goal is to get rich, there is no need to produce something of value, as long as your ideology and connections work for you.
Now you know why the elites stop at nothing to keep power, and why they so hated President Trump. He was seen as a threat to this deep state/crony capitalist system.
As if Trump himself wasn’t an elite crony capitalist who set all kinds of new lows in ethical standards around financial conflict of interest.
Whataboutism, how quaint.
Yes, he was. But like the paranoid who has real enemies, Trump was a crony capitalist who threatened different crony capitalists.
That’s a fair point Roger but Thucydides’ claim was that Trump was a threat to the SYSTEM of crony capitalism, not just particular crony capitalists. That claim is preposterous.
Competition is a systemic condition.
So what? You can’t even have a system of competition without other competitors. Adding a competitor does not threaten the system. That’s how the system is built.
You have adopted the woke logic that says you can have systemic racism without racists. You should reject that logic both about racism and about cronyism.
Mnuchin – GS wasn’t it? Same as Geitner? Idk…its late and I’m not looking it up. Thinking “elites” hated Trump is pretty rich lol.
“Post government employment” income – mostly jobs, but also money from speeches, books, movies, contracting, lobbying, “legal work”, “””consulting”””, etc. – is the number one source of corruption for all senior officials in the government, and the incentives that distorts their professional decisions while in their position away from the public interest the most. When Western countries chastise other nations for corruption and try to enforce FCPA-like laws against political enemies, other countries just point the finger right back.
Not only is it legal, many laws effectively require and insist upon it. My favorites are ones in which Congress imposes some economically important numerical limit, but simultaneously allows that limit to be raised to a substantial degree in the discretion of some official, who can then ration out the new surplus on a case by case basis. This practically guarantees intense lobbying of whoever happens to sit in that position (and of course their whole chain of bosses up to the top), which involves lots of people getting right up the legal line of promising that future compensation in exchange for those rations.
It is sometimes argued that because of low government pay and ‘compression’, you just can’t get the best people without these forms of post-government service cash-outs being available. Well, it’s true you can’t get the best. But you don’t need the best. Also, if you divide how rich these people get by their hours of “public service” to come up with some kind of effective true wage, you are not getting anything remotely close to the level of talent and quality that true wage would get you if you were recruiting someone in the private sector.
One proposal is simply to tax 100% of income in excess of, say, $250K, for, say, five years, after any executive schedule employment. Not exactly a vow of poverty.
But others say that even if you found adequate people who would be willing to do a top job for normal levels of income under such a restriction, normal people would reject the offer to accept that income for crazy hours and insane levels of legal risk, not to mention exposure to politically-motivated, ruthless, and brutal personal attacks and ruination of reputation.
So, “there has to be a compensatory payout”, and because the government can’t make it while one is in the position, the post-position corruption is a ‘necessary’ part of the system. Otherwise the only people to accept the deal and take up the jobs would be really low-tier.
To which the response is, “They already are, so nothing lost.”
If the beneficiaries can’t cancel the service for poor performance, there is no incentive which enforces performance.
Indeed the incentives are the reverse; if you solve the problem, you lose your justification for sucking at the trough. Further, you have to funnel substantial cash out of the system’s control to fund lobbyists, because there’s a 100% guarantee someone is competing for your budget with their own lobbyists. As the Foundations and Microsoft show, it’s not even good enough to be funded by something outside the system while minding your own business. The Danegeld must be paid. The lobbyists then fund the congressional offices which write the regulations, and presumably pay the NYT hush money. Sadly the NYT is being paid the going rate, so we don’t hear about it. That dog is not-barking real conspicuously, however.
Of course even if the dog did bark, it turns out division of labour is good actually. Understanding which institutions are screwing you over is at least a part-time job. There’s an apprenticeship and everything. (Further, as far as this is on the table, they spend money making it even harder.) Without someone forcing them to learn at gunpoint, productive Americans are too busy with their own lives and families to understand the truth. They can grasp one of a variety of massively oversimplified lies. (Ref: Jaques Ellul.) The lies will be tailored by someone self-serving, simply because they care more, and thus whichever lie Americans would buy in this hypothetical counterfactual would only reward some political faction over another.
Even if someone did try to force them at gunpoint, there’s a quis-custodiet and special-interest problem.
Note there’s nothing especially democratic in this analysis. It applies very widely.
Bonus round: it is empirically obvious that failing to solve the problem has no negative effects on your budget. Indeed the opposite. The more catastrophic the failure, the stronger the pressure to increase the budget. How else will the problem be addressed harder? Good intentions, clearly, excuse any behaviour whatsoever. E.g. severe vote fraud. (Road to hell? Sorry, road to what now? idgi)
Double bonus round: if the beneficiaries can cancel but those paying for the service can’t cancel, the system selects for direct “redistribution” services. The beneficiaries will become tax farmers, except without the part where they have the responsibility to farm taxes, since it’s all done using inflation these days.
Can someone explain the corruption here? There are lots of people who’ve earned millions or billions in the investment + finance industries. What makes this scenario illicit or corrupt?
Wouldn’t strictly money-centric financial workers earn more than those who push political ideology?
I think it is the rather rapid change in wealth despite the job descriptions. Going from “I have equity in my small house” levels of wealth one year then “I am independently wealthy” five years later suggests a huge swing in income. A swing on par with the Beverly Hillbillies. Even in the investment realms, people doing actual investing don’t become multi-millionaires quite that quickly in a mediocre economy. Maybe in the early internet boom phase, maybe pre-2008 crash, but what industry now has been growing such that 200k gets turned into 7 million in five years?
Maybe some hedge fund managers make that kind of cash based on investing other people’s money, but did Deese? Even if he did decide to jump in, did he have any experience or other marketable skills to suggest that people would pay him 7 million + over 5 years to manage their money in a 2% growth economy? If the marketable skill is “Had a high place in the Obama administration” then yea, that’s the corruption angle.