The Rotten Revolving Door

Marshall Auerback comments on the new 'creative' economy (italics mine):

Finally, there is the odious problem of political corruption, which manifests itself in many forms, but most recently through the cynical revolving door policy between Wall Street and government. Peter Orszag's move to Citi after spending months launching broadsides against Social Security from his perch at OMB and then the NYTimes goes beyond cynicism. Nobody expects a former government official to live like a monk after spending time in public service. But the idea that someone would help plan, advocate, and carry out an economic policy that played such a crucial role in the survival of a financial institution and then, less than two years after his administration took office, would take a job that (a) exemplifies the growing disparities the administration says it's trying to correct and (b) unavoidably call on knowledge and contacts he developed while serving at OMB is sickening in the extreme. That his successor also comes from Citi simply perpetuates the incredulity. All this, under an ostensibly "progressive" Democratic administration.

Orszag: epic elite FAIL Anyway, back to Auerback:

The revolving door between Wall Street and Washington calls attention to the rotten heart at the core of the American polity today -- what James Galbraith has felicitously termed "the predator state". The state has become too weak and therefore remains another instrument of corporate predation. The revolving door policy (eagerly embraced by this president, much like his predecessors) perpetuates the problem because it enhances the dominance of the so-called "FIRE" (finance, insurance, real estate) sector of the economy. The FIRE sector simply acts as a parasite on the production and consumption core, extracting financial and rent charges that are not technologically or economically necessary costs. Its revenue takes the form of what classical economists called "economic rent," a broad category that includes interest, monopoly super-profits (price gouging) and land rent, as well as "capital" gains. Its ethos consists largely of denuding the state of any provision of public goods, privatizing the public domain and erecting tollbooths to charge access fees for basic necessities such as health insurance, land sites, home ownership, the communication spectrum (cable and phone rights), patent medicine, water and electricity, and other public utilities, including the use of credit cards or the credit needed to get by. It's a zero-sum economic activity. One party's gain (that of Wall Street usually) is another's loss. It looks like we'll have much more of the same as we enter into 2011.

Ethos is really the key word here. With the exception of a few people like Matt Taibbi, most in the mainstream media never seem to discuss how much the people who do this stuff suck as human beings. Keep in mind, a disproportionate number of them hail from elite educational institutions--more failure from those organizations. If a schoolteacher is going to be decried as greedy, well, then what do we call these motherfuckers? They, too, have moral agency.

(Yes, anger is appropriate emotion. And incivility is commensurate to the validity of their actions--which is to say, they have none at all).

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It's always frustrated me that so many people (many of whom are genuinely talented, clever and hard-working) put so much effort into zero-sum economic activity. If we could persuade them into productive work, they'd be a valuable resource. But, sadly, they (or at least the ones I've met IRL) get suckered into a position where they genuinely believe that their way is the right way, and that their rent-extraction is truly more beneficial to society and humanity than working on economically valuable projects. (Can you tell I've got some in the family?)

By stripey_cat (not verified) on 10 Jan 2011 #permalink