Ex-Bankers

I want to take issue with something Simon Johnson of MIT said on Bill Moyers' show tonight, because I think it was very insulting. From the transcript:

BILL MOYERS: Geithner has hired as his chief-of-staff, the lobbyist from Goldman Sachs. The new deputy secretary of state was, until last year, a CEO of Citigroup. Another CFO from Citigroup is now assistant to the president, and deputy national security advisor for International Economic Affairs. And one of his deputies also came from Citigroup. One new member of the president's Economic Recovery Advisory Board comes from UBS, which is being investigated for helping rich clients evade taxes.
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SIMON JOHNSON: Absolutely. I don't think you have enough time on your show to go through the full list of people and all the positions they've taken. I'm sure these are good people. Don't get me wrong. These are find upstanding citizens who have a certain perspective, and a certain kind of interest, and they see the world a certain way.

And it's exactly a web of interest, I think, is what you said. And that's exactly the right way to think about it. That web of interest is not my interest, or your interest, or the interest of the taxpayer. It's the interest, first and foremost, of the financial industry in this country.

Johnson's blanket assumption that Treasury officials who come from the financial industry don't have the taxpayers' interests at heart is incredibly insulting. These people are public servants, and yet Johnson doesn't hesitate in assuming that they're not acting the public interest. Why does working in the financial sector mean that everything you do subsequently is in the service of the financial sector?

The implication is that working on Wall Street makes you incapable of acting in the public interest. Now, there are definitely plenty of people on Wall Street who are incapable of separating Wall Street's interests from the public's interests. But the idea that any Treasury official who came straight from the financial sector is essentially a Wall Street lackey is absurd. It's a childish argument that Johnson makes. His claim that he thinks "[t]hese are fine upstanding people" rings hollow, since after getting that disclaimer out of the way he proceeds to accuse them of failing to have the public's interests at heart.

Believe it or not, favoring a banking solution that's as harsh as possible on Wall Street doesn't show how "tough" or "bold" you are. The world's not that simple. You can have contempt for Wall Street without believing that the most effective banking plan is the one that inflicts the most pain on Wall Street.