It has been a few weeks since former Federal Reserve Chair Ben Bernanke began his new job as a blogger at Citadel, a hedge fund. Since leaving his government post in 2014, he has spent most of his time writing a memoir and contributing to the Brookings Institute, a Washington think tank. Before entering government work, he worked in education; he was known for insisting that he was an academic, not a Wall Street investor.
With Bernanke’s past in mind, the new position seems ethically suspect. A man who used to help regulate America’s economy is now working on Wall Street, side-by-side with America’s one-percenters. Looks like the staunch professorial morals have gone out the window, and Bernanke is on a path to becoming just as entitled as the investors he was responsible for overseeing.
Perhaps he is only taking the lead of his predecessors. From Secretary of the Treasury Timothy Geithner—who took a job with Warburg Pincus, a private equity firm—to former Office of Management and Budget Chief Peter Orszag—who joined Citigroup—a cushy Wall Street payout seems to be waiting for every former financial politician who wants it.
In his statement to the press, Bernanke says that he anticipated criticism about what seems to be a revolving door between Wall Street and Congress. But he stipulated that, technically, he did not regulate firms like Citadel during his time in office.
Bernanke wants to absolve himself on a technicality, it seems, but he is skirting a more uncomfortable truth—that this has a stench of corruption, and that it’s part of a pattern.
The thing is, though, that the wonks don’t want to acknowledge it either. I’m talking about the bloggers, the talking heads on CNN and CNBC, the Jim Cramers of the world who are somehow still on television. They’re going to be the ones to lead the conversation. Heck, the average American doesn’t even know what the federal reserve chair does. Jim Cramer does. Mike O’Brien of the Washington Post does. And so does Bloomberg’s Barry Ritholtz. They follow the setting of short-term interest rates like it’s the third season of House of Cards. And they also don’t really care that rich men making financial decisions in Washington have now moved their offices to influencing financial decisions in banks and hedge firms—in fact, they think the men are entitled to it.
Those are O’Brien’s words, anyway: “If anyone deserves a seven-figure sinecure, it’s Ben Bernanke,” he wrote. And Ritholtz similarly shrugs off any suggestion of an ethical breach: “No one will begrudge your efforts to monetize the insights and experience you gained.” (Ritholtz actually spends the rest of the article giving Bernanke some of his blogging wisdom.) Credit is certainly due to Bernanke for leading the country from an economic downturn, and very nearly avoiding a Great Depression. None of this made for a small task, but does doing the job that the president selected you to do justify abusing your influence for personal gain?
When the Wall Street bloggers give Bernanke a free pass, they are perpetuating finance’s anti-mea-culpa culture. And while Professor Bernanke may not have submitted to the entitlement ethos before, the financial and political worlds may have become too intertwined through his and other’s political tenures.
This is the same obnoxious culture that led to exactly one single arrest for the financial crimes that brought about the 2008 economic downturn. It is the culture that supported all of the banks that paid fines (pocket change for most) and admitted no wrongdoing whatsoever. It’s every bad stereotype you have about privileged, aggressive bankers who play with the economy at will, who commit fraud like it’s nothing and then get Leonardo di Caprio to play them in a movie.
I don’t feel like those in this culture deserve a seven-figure salary. I feel like its fanboys in the financial news circuit need to start questioning how we came to this, and how we can avoid further corruption. They need to be questioning how we can avoid the doggish nearsightedness that led to one of our worst financial crises in history.
Your move, wonks—I suppose that means you too now, Mr. Bernanke.
