Senator Elizabeth Warren (D-MA) is upset with what she calls the “Wall Street shuffle,” in which government regulators and Wall Street executives exchange places. She’s right to be upset, but the problem goes beyond Wall Street.
In truth, we see the “revolving door” in almost all industries and sectors of government, and it’s a corrupting influence on both government and industry. So, for example, ObamaCare architect Liz Fowler left government for a high-paying Big Pharma job, while top Obama Administration officials are looking for high-paying K street lobbying jobs. How high-paying? “Salaries for former Obama cabinet officials could start at $1 million while former assistants and special assistants can make more than $500,000 and $300,000, respectively.” Likewise, in 2011, a few months after approving a controversial merger involving Comcast, Republican-appointed Federal Communications Commission member Meredith Attwell Baker left to take a high-paying job at . . . Comcast.
It’s easy to see why companies want to hire people like this. First of all, the architects of complicated regulatory schemes are often the only ones who understand them. But more significantly, when you’re the architect of a regulatory scheme, it’s handy for companies if it’s already in your mind that you might get a lucrative job from them later — or not. That may not cause you to make the scheme less complicated (heck, complicated regulatory schemes are good for companies big enough to hire lots of lobbyists and lawyers, because they make it harder for upstart competitors to enter the field), but it just might affect the kind of complicated scheme you produce.
When President Obama ran for president in 2008, he promised to “close the revolving door” and clean up both ends of Pennsylvania Avenue, but that hasn’t happened. Which isn’t to say that it shouldn’t happen now. But I don’t think the usual ethics-rules approach is enough.