The Revolving Door of Corporatism Continues
This is just in from CNBC’s John Carney: a key advisor to U.S. President Obama will leave the Federal Housing Authority where he is a regulator of the mortgage industry and make a beeline straight for the industry he once oversaw. When David H. Stevens announced he was leaving the FHA last week he said he had no future plans. Now, apparently he is going to head the Mortgage Bankers Association, the chief lobbyist for the industry he regulated.
"If Stevens had generally been less friendly to industry — had he decided to let the mortgage market fall more freely or punish lenders more harshly (that is, had he been more Right or more Left) — would industry have considered hiring him?" my brother Tim Carney asks at The Washington Examiner. "The incentives for powerful bureaucrats are to be ‘responsible’ and ‘pragmatic’ — which usually means friendly to the industry you’re regulating and subsidizing."
Tim goes on to point out some other top Obama officials cashing out to work for big banks:
- Deputy White House Chief of Staff Mona Stephen, now a lobbyist for UBS.
- White House Counsel Greg Craig, who went to Goldman Sachs
- Budget Director Peter Orszag, who went to Citigroup
- Labor Department aide Oscar Ramirez who represents Bank of America at the Podesta Group
- Top Treasury Department aide Damon Munchus, who now lobbies for Citigroup and the International Swaps & Derivatives Association, among others.
This is a far cry from what some of us expected when candidate Obama pledged he was "closing the revolving door."
"No political appointees in an Obama Administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years," Obama wrote back during the 2008 campaign.
Ain’t democracy grand?
Stevens will certainly be a ‘voice of reason’ in private industry telling the bankers what the Obama Administration thinks about the banking industry. I’m sure he can pass on the message that Obama is ‘business-friendly’. And he can certainly advocate for the mortgage deal that the Obama Administration wants to get passed as well. I’m sure you know "what the mortgage deal in the works reveals about the Obama Administration": "It is very important that we try to bring this to bed as quickly as we can," Geithner told the Senate Banking Committee. (via Reuters).