Will Wilkinson sees Peter Orszag taking a job with Citibank as evidence of deep flaws within the liberal idea:
In my opinion, the seeming inevitability of Orszag-like migrations points to a potentially fatal tension within the progressive strand of liberal thought. Progressives laudably seek to oppose injustice by deploying government power as a countervailing force against the imagined opressive and exploitative tendencies of market institutions. Yet it seems that time and again market institutions find ways to use the government's regulatory and insurer-of-last-resort functions as countervailing forces against their competitors and, in the end, against the very public these functions were meant to protect.
We are constantly exploited by the tools meant to foil our exploitation. For a progressive to acknowledge as much is tantamount to abandoning progressivism. So it's no surprise that progressives would rather worry over trivialities such as campaign finance reform than dwell on the paradoxes of political power. But it really isn't the Citizens United decision that's about to make Peter Orszag a minor Midas. It's the vast power of a handful of Washington players, with whom Mr Orszag has become relatively intimate, to make or destroy great fortunes more or less at whim. Well-connected wonks can get rich on Wall Street only because Washington power is now so unconstrained. Washington is so unconstrained in no small part because progressives and New Dealers and Keynesians and neo-cons and neo-liberals for various good and bad reasons wanted it that way. So, what is to be done? Summon a self-bottling genie-bottling genie?
A few replies:
1. I don't think private capture of public functions represent a major, recurring problem with liberal governance. Does the minimum wage result in regulatory capture? Does Social Security? The Earned Income Tax Credit? Moreover, when such capture does occur, liberals can un-capture it, something that happened with student loans, Medicare Advantage, and so on. Libertarians are very interested in the phenomenon of regulations being turned into weapons of business power, but this phenomenon seems like the exception rather than the rule.
2. I don't see any evidence that Orszag was corrupted by the prospect of private lucre during his tenure as Budget Director. His most important contribution to the Obama administration may have been a fierce insistence upon using health care reform to control the growth of health costs -- a goal that serves almost no narrow private end and opposes many.
3. As Wilkinson semi-concedes later on in his item, it's not really true that "Well-connected wonks can get rich on Wall Street only because Washington power is now so unconstrained." It's impossible to create a government weak enough that having deep knowledge of government will not be a marketable commodity. Given that fact, the only answer is to create social norms and regulatory barriers to minimize excessive special interest as best as possible.