The Ways of Washington

As I write this, I’m listening to the President’s weekly address. He says we will get new teachers in math and science,  modernize  healthcare systems, construct a new electronic grid,  rebuild our crumbling roads.  All of this creates 3mm new jobs,  He also outlined his commitment to transparency with this incredibly engaging idea of recovery.gov.  But unfortunately for America, most people, especially people in high office, don’t have President Obama’s values.

Those that serve often want to get paid when they leave offce.  Call it the high-office entitlement.  Obviously people have a right to maximize their earnings.   President Obama will have a very difficult time enacting tougher legislation for lobbyists because so many powerful politicos in washington have a vested economic interest in protecting the status quo.  To his credit, Obama has made members of his administration sign contracts that forbid them from lobbying for a period of time, but I think it’s only a year or two.   But Washington is a place where ideology often fades as those young people that show up have children that they need to send to private school.  Those ideologues decide they want a house on the Chesapeake Bay.  Tom Daschle was one of them.

Tom Daschle traded on his long and distinguished tenure in Washington to make money and enjoy life in the private sector.  He was surprised to lose his senate seat and his consolation prize became getting rich by helping a number of companies that we would not typically associate with Daschle influence legislation.  Daschle’s early support for Obama helped legitimize his candidacy.  Daschle is a good guy who always lead the senate with a thoughtfulness and integrity.  And now he’s out.  Simply because he let Leo Hindery provide him with the good life that he used to have as a Senate Majority Leader without paying for it.

I’m at a point where I want to stop giving the political death penalty to distinguished civil servants who would help the country.  Daschle owed about $150k in taxes.  Couldn’t he just pay a triple penalty on that and we could let him back onto the team.  Maybe it should be a 10x penalty.  Too many good people,  will never serve in our government for a variety of reasons that just don’t seem like that big a deal.   Shouldn’t I have some ability to pay a hefty fine for my sins in order to try and take a job as a civil servant?

The irony is people can serve the government, then leave it, and trade on their connections and knowledge to benefit just about anybody they want including foreign governments and  companies they may or may not have America’s best interests in mind.

Maybe we should show a little more flexibility in the confirmation process and bolster the limitations on ex-government officials as they depart.

Comp Change Means Mgmt Change on Wall Street

500k and restricted stock that vests only when the government has been repaid.  Wow.

My predictions:

1.  Goodbye to  Wall Street Executive who can afford to retire.  It will not be fun or rewarding and they will reinvent or play golf.

2.  Young Guns with lots of energy and significantly less experience will rise to prominence.

3.  Clever lawyers will design workarounds to increase compensation for executives.

4.  Congress will look the other way if economy recovers

5.  Wall Street Executives will  rally around the next Republican presidential candidate.  This will blunt some of Obama’s fundraising prowess in the next cycle.

6.  Obama will need 8+ years to break the cycle of avarice and entitlement that has dominated Wall Street since the Reagan Era.  Any economic recovery will foster aggressive political attacks on the severity of this presidential change.  This could lead to a new era in class warfare.

Obama, Daschle, and Apology

I’ve made no secret of my support of Barack Obama, but I also posted last week about my axiety about misallocated stimulus.  Policy matters we can debate, but I hope all of you realize how impressive it is that Barack Obama has apologized for nominating former Senate Majority Leader Tom Daschle to be his secretary of Health and Human Services.

We hold our public servants to an incredibly high standard and sometimes I think it’s unfortunate that people (like me) who haven’t paid taxes on for their domestic help can’t ever participate in public life.  But Tom Daschle knew the standard and he cut corners because people like trade on their connections to build wealth after they leave public office. I certainly can understand and don’t begrudge anybody the chance to make money, but I do think Daschle should have known better if he ever wanted to return to public life.  Why did he not pay a really thorough accountant to dot his i’s and cross his t’s.  I can only guess it’s that he didn’t want to pay the taxes.  That’s the sad thing and kind of makes you struggle to believe in a guy like Daschle who tries to cut corners and then complain that Republicans are friends of big business and avaricious in their own right.

It seems its almost impossible to find a completely qualified, buttoned-up set of cabinet secretaries these days.  We’ve already lost Richardson and Daschle and nearly lost Holder.  One wonders how these kinds of stories effect a generation of 30-year-olds who have to watch every step if they ever want to hold public office.

But, to me the big takeaway from this chapter is that President Obama said, “I’m sorry.”  He was man enough to admit the mistake and he’s fixing it.  No spinning of the story.  Does anybody really believe his handlers told him to apologize?  No way.  He did it because he knows what’s right.  No matter your politics, please appreciate how rare public apologies are in this country.  We are now a country run  by somebody who trusts his own judgement on matter of conscience.