The Lure of the Big Citi

Article excerpt

Byline: Daniel Gross

Banking is politics by other means.

When Peter Orszag, director of the Office of Management and Budget, stepped down from his cabinet post last July, observers were surprised by the speed with which members of Obama's economic team were abandoning their posts. Christina Romer, chair of the Council of Economic Advisers, followed in August, rushing back to Berkeley in time for the fall semester. In September National Economic Council head Larry Summers announced his intention to return to Harvard. Policy types usually wait until after the midterm routs to bail. Of course, this gang has always been precocious (Summers was granted Harvard tenure at 28).

Though he's a policy wonk's policy wonk, Orszag didn't go to academia. He started a regular gig at The New York Times op-ed page. And in mid-December he joined Citi as vice chairman of the investment-banking division--a move that led to shock and dismay among the bien-pensant.

Citigroup? Of all the financial joints in the world, he had to choose the megabank whose unmatched combination of incompetence and recklessness led it to seek some $45 billion in government aid? He had to go to the place that best emphasizes the corrosive relationship between Wall Street and Democratic Party elites? (Citi is where Robert Rubin got paid a ton for hanging his hat after serving as Clinton's Treasury secretary.) Worse, at the time Orszag was negotiating with Citi, Treasury still owned a huge chunk of the bank's shares.

For a host of reasons, the Orszagadelic move was both obvious and inevitable. In Obama's economic team, the numbers are working against you, even if you're already a cabinet member, as Orszag was. Treasury secretary is the ultimate goal for economic-policy strivers. Bill Clinton and George W. Bush each went through three Treasury secretaries in their two terms, which gave comers reason to stick around. But Obama's first Treasury secretary, Tim Geithner, may be his last. His close-cropped hair is graying, but Geithner, 49, doesn't have the beaten-down look of most financial-crisis survivors. Being a bureaucrat in governmental financial institutions is the only thing he's done in his adult life, and it's all he wants to do.

With the path upward blocked, Orszag's existing cabinet-level job was becoming increasingly unpleasant. …