Symbolic v. Substantive
Tim Geithner's been busy in his first full day at Treasury. First he stated his intention to crack down on lobbyists working the bailout for cash:
Obama administration officials said they go farther than the lobbying rules imposed by the Bush administration and are designed to ensure that bailout money is distributed with the goal of promoting the health and stability of the financial system.
"American taxpayers deserve to know that their money is spent in the most effective way to stabilize the financial system," Geithner said in a statement. "Today's actions reaffirm our commitment toward that goal."
Treasury's new rules restrict the contact officials can have with lobbyists in connection with applications for funds from the bailout program. The new restrictions are modeled on the limits that are imposed on political lobbying of Treasury Department officials on tax matters.
In making required reports to Congress on the operation of the $700 billion rescue program, officials will have to certify that each investment decision was based only on objective criteria and the facts of each case.
The rescue program will be required to publish a detailed description of the review process conducted in making the awards, and no bank will be considered for an award unless it was recommended for the assistance by the firm's primary regulator.
If there's one thing that the Obama Administration is signaling, it's that the days of lobbyists feeding at the government trough are over. Only thing is, once you start putting lobbyists in the room, the import of these pronouncements becomes lessened.
Despite President Barack Obama's pledge to limit the influence of lobbyists in his administration, a recent lobbyist for investment banking giant Goldman Sachs is in line to serve as chief of staff to Treasury Secretary Timothy Geithner...
"Considering that Goldman was an early and large recipient of our TARP funding, being pulled out of that really does effect his ability to be an effective chief of staff for the treasury secretary," said Steve Ellis, president of the watchdog group Taxpayers for Common Sense.
Just to put a little meat on Ellis's comments, recall that Goldman not only benefited from AIG's bailout, the firm itself pocketed about $12 billion in direct bailout funds, while paying billions in bonuses to executives.
Sure, I guess it's a step forward that the Treasury Secretary isn't an immediate former top executive at Goldman Sachs, as Hank Paulson was. But clearly, Geithner - just a day after squeezing through the Senate confirmation process - is back to his old tricks.
With a Goldman lobbyist inside and all the other banks now outside, exactly who do we think stands to benefit from the new regime's allocation of the bailout funds?
The Obama Administration is very good with shutting down the symbolic - be it lobbying contacts or Citibank's new corporate jet. And there's value in that. But you have to shut down the substantive stuff too in order for those symbolic moves to have any meaning.