A defender of Neel Kashkari writes in:
He worked his butt off at Treasury at great personal cost (both financial, with an 80% pay cut, and otherwise) to help keep catastrophe from happening, and now he’s out and reconnecting with the rest of his life. I seriously doubt that he invited the Post reporter to “hang out with him in the mountains”, as I know he chose not to “do” any press beyond hearings and remarks while heading TARP.
As for PIMCO, he has a Wharton MBA and experience in investment banking; In his mid 30s I doubt he’s ready to retire and needs to work somewhere. He was a political appointee under Paulson and only stayed on into the Obama Administration to provide continuity during a period that really needed it. Not to sound flippant, but where should someone like him work after serving in government?
It’s true that Kashkari worked hard at Treasury: everybody did. And it’s true that he made much less money there than he was making at Goldman. But that’s looking at his tenure at Treasury on a very narrow view. If you look at what going to Treasury did for Kashkari’s lifetime earnings and ability to easily find a high-paying job, it turns out to have been a very smart career move.
Now it’s entirely possible that Kashkari went to Treasury out of pure selflessness — but he’s blazed a trail now (or at least he would have done had he not been following in the footsteps of many who went before him) and in future anybody moving to Treasury can expect that doing so is liable to do wonders for their employability and their chances of ever making a seven-figure income.
Remember too what Kashkari’s job was at Treasury, before Hank Paulson came out with the Plan B of simply buying equity stakes in the banks: he was meant to be putting in place a mechanism to value precisely the kind of complex debt instruments that Pimco considers itself an expert in. In doing so, he doubtless spent a great deal of time with very senior Pimco officials who were probably flattering him daily in an attempt to bring him round to their way of thinking on the matter. It hardly matters whether or not they explicitly said at the time that they’d be interested in hiring him when he left government — Kashkari’s a smart guy, and he knows how the revolving door works.
So, where should someone like Kashkari work after serving in government? Well, for one thing, the system of having layers upon layers of political appointees at Treasury is ridiculous — and served to seriously hobble Tim Geithner in his first months on the job. Treasury should be run largely by career civil servants, not by political appointees.
And if Kashkari wants to serve the public, there are lots of ways he can do so which don’t involve working directly in financial services. Alternatively, if he wants to get out of that kind of thing althogether, he can go off and become a mountain ranger or a carpenter or a poet. More realistically, he had a career as an aerospace engineer; he could go back to that, or to manufacturing and engineering more generally. There’s no shortage of jobs for the likes of Neel Kashkari, and yet he picked the one which conflicted most egregiously with his attempt to serve his country. His decision to join Pimco right now means that no one will ever look at his decision to join Treasury quite the same way again.
As for the WaPo profile, you can be sure that it was written and photographed with the clear and express consent and permission of Neel Kashkari. He might not have been “doing press” for a while, but he certainly opened up to Laura Blumenfeld and Linda Davidson.
I don’t want to defend Neel Kashkari, but the reasoning you go through here seems very suspect to me… and you could be missing valid points.
Seriously? The guy lived through some of the most extreme economic events in the last half-century. I think it’s easy to see how he could still have a passion for the subject matter and wouldn’t want to go back to being an aerospace engineer or become poet. It’s also easy to come up with entirely ethical reasons why he would choose to work with Pimco. Regulators (particularly ones whose previous field as Information Technology Security) might not have a comprehensive expertise in the area that they are supposed to supervise. He may have been taught a lot by bright people at Pimco during this course of his time at the Treasury and decided that he wanted to work with them further.
If you really want to turn this into a serious critique, I think you need to show how he “treated Pimco with kid gloves.” [Hint: Wasn't Pimco a big holder of Fannie Mae bonds? And under the treasury's bailout plan, did the bondholders walk away whole, while the preferred shares got wiped? Would be interesting to see if anything could be found under the Freedom of Information Act]
Note: I don’t actually know of any wrong doing here. I just think it would be interesting to look into
What did the twitterer mean when he said that Kashkari was hired because he passed his two year probation? Sorry, too tired for a link, but I’m sure you caught that.
Of course Kashkari didn’t go for “entirely selfless reasons” but can you think of anyone who joins a public body for entirely selfless reasons? I think you have far too much faith in career civil servants.
Besides, do you have any suggestions for how we stop or discourage the revolving door mechanism which would not adversely impact the quality and number of applicants to important positions in public office?
Apologies – “entirely selfless reasons” isn’t actually a quote, it was supposed to refer to your “pure selflessness” comment.
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