Meet revolving door winner Peter Orszag who works at Too Big To Fail (and apparently too big to regulate) Citigroup. Orszag was director of the Congressional Budget Office from January 2007 to November 2008. On November 25, 2008, President-elect Barack Obama tapped Orszag for director of the Office of Management and Budget, the arm of the White House responsible for crafting the federal budget and overseeing the effectiveness of federal programs. In July 2010, Orszag left his position as Office of Management and Budget director and since January 2011, Orszag has been Vice Chairman of Global Banking at Citigroup.
Of the five largest US financial institutions today (you know, the five that control 52% of the banking industry), Citigroup has the most former politicians, executives and lobbyists spinning through its revolving door – a staggering 81 at last count. This human resources policy certainly pays off for Citigroup, as the largest beneficiary of the TARP funds with $45 billion. But TARP was only one way in which the federal government subsidized the big banks. The Federal Reserve also handed out trillions in unsupervised loans during the so-called crisis period. According to ProPublica’s compilation of the 21,000 loans and other deals by the Federal Reserve, Citigroup was the #1 recipient with a total of $2.4Trillion.
How did our economic system of capitalism become so distorted that $2.4 Trillion government dollars are used to save a bank from failing? The concept of too big to fail is contrary to the foundations of capitalism; it creates an unequal playing field where certain institutions are granted the right to make risky business decisions and ignore the risk of failure. With $2.4 Trillion dollars of failure, you would think that innumerable laws must have been broken, but we haven’t observed anyone from Citigroup going to prison. In fact, only three executives were fined and those amounts were $100,000 or less. With this it is easy to conclude that the regulations were not effective. Is our government really that incompetent? Like two old oak trees, the roots of our government and the industry it is supposed to regulate have intertwined and leaned against each other to such an extent as to become one.
As if it’s not maddening enough to see the glaring decisions that led to this economic crisis, we are witnessing a continuation of business as usual. No meaningful regulation has been implemented and the TBTF banks are bigger now than ever. In fact, while we are left holding the bag for $2.4 Trillion to Citigroup those executives are not prosecuted criminally or financially sacrificing personally. Why aren’t we pointing fingers and naming names of those who are selling the American economy out? The intentional act of holding the American people hostage while the greedy few steal as much money as they can is worth a public flogging in the town square.
Peter Orszag is a sell out. He is an example of one who is personally gaining financially at the expense of the American economy by leveraging his experience in our government.