Listen, Liberal by Thomas Frank

Author:Thomas Frank
Language: eng
Format: epub, mobi
ISBN: 9781627795401
Publisher: Henry Holt and Co.

AMONG THE SERIOUS

In the early days of the Obama administration, as we have seen, there was a healthy Ivy League delegation in the executive branch; as the years went on, the administration grew even more selective, even more closely focused on professional status as it is defined by a tiny group of institutions. As of this writing, fully two-thirds of President Obama’s cabinet-level officers are products of these elite schools; all but three of them have graduate degrees.5 For the rest of us, this should serve as a cue to inquire a little more carefully into the phenomenon of genius-in-government. Of what does these people’s brilliance really consist?

It is not book-learning alone. Consider Larry Summers: during the two years when he worked at D. E. Shaw, the hedge fund that is thickly populated with chess champions and math Olympians, he is known to have made some $5.2 million. In exchange for this, he reportedly worked one day a week at tasks that have been described as standing somewhere between trivial and ornamental. Do the math and that comes out to about $52,000 a day—more than the average American household earns in an entire year.6

Stints like this turn out to be a frequent item on the résumés of Obama’s leadership clique, almost as common as the Ivy League educations and advanced degrees that so impressed the nation’s pundits in the administration’s early days. Rahm Emanuel, the president’s first chief of staff, had also spent a brief period in investment banking, during which he amassed a sum several times greater than Summers’s. Bill Daley, the man who replaced Emanuel, had passed many years at JPMorgan, while Jack Lew, who eventually replaced Daley (before going on to run the Treasury Department), had previously directed a Citibank group that invested in hedge funds. Michael Froman, the president’s trade representative, also came from Citibank.

Other Obama officials worked the equation in reverse. Tim Geithner, the Treasury secretary during the crisis years, serves today as president of Warburg Pincus, a private equity firm. Obama’s first director of the Office of Management and Budget, Peter Orszag, left government for a job at Citibank. Gene Sperling, a director of the National Economic Council, signed up with PIMCO, as did Ben Bernanke, Obama’s first Fed Chairman; White House Counsel Gregory Craig opted for Goldman Sachs; and the incorrigible Daley worked it at both ends, choosing post–White House to join Argentière Capital, a hedge fund based in the Swiss city of Zug.

Thus did the Party of the People turn the government over to Wall Street in the years after Wall Street had done such lasting damage to … well, the People. The classic explanation for this perverse act is the donations the banks made to Obama’s campaign in 2008. But there’s another, and it takes us deep into the shared predilections of the liberal class: Obama deferred to Wall Street in so many ways because investment banking signifies professional status like almost nothing else. For the kind of achievement-conscious people who

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