Tim Geithner Sells Out

A blog about business and economics.
Nov. 18 2013 9:09 AM

Tim Geithner Sells Out

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WASHINGTON - JULY 14: Does this mean I get free delivery from Seamless?

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After spending about a year cooling his heels as a Council on Foreign Relations fellow and getting his ducks in a row to do a book, Tim Geithner announced Friday afternoon that he's going to become President of a fairly obscure company called Warburg Pincus. Warburg Pincus is a private equity company, and thus this move constitutes the Great Wall Street Sellout that everyone's been expecting of Geithner for some time.

Since this is Slate I was going to write an apologia for Geithner in which I point out that working at Warburg Pincus isn't at all the same as working at Citibank or Goldman Sachs, and that actually the kind of private equity Warburg Pincus does has very few regulatory issues with the federal government. As Treasury Secretary, Geithner wasn't really in a position to do favors for Warburg Pincus. And as an out-of-office former Treasury Secretary, Geithner's value-added to Warburg Pincus is almost certainly as a rainmaker—he's a very prestigious guy to throw into a meeting with the Qatar Investment Authority or the Oregon Public Employee Retirement System—than as a lobbyist. In a practical sense, WP is probably best known to you as the owners of Grubhub and Seamless, though Chinese people perhaps know them as owners of that country's largest rent-a-car chain, and they also own India's biggest cargo port.

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But then I read Noam Scheiber's slam on Geithner for taking the job in which he concedes all those points and slams him anyway:

All of which is to say, the next phase of Geithner’s career sounds a lot like what preceded it. Geithner has never been a crass operator. There’s always been some semblance of a code discernible in his calculations. It’s just that, when you finally unearth the moral distinctions he has in mind, they’re so fine that even a smart outsider would struggle to identify them. They don’t testify to his purity so much as his obliviousness: Anyone who thinks such distinctions get him off the hook must be of touch.

So I guess I'm on team oblivious. I'll just say, though, that Scheiber's counterfactual Geithner job is for him to do something else like go be a university president. There's nothing wrong, in my view, with becoming a university president. But it's not as if major American universities don't have the opportunity to call on the government for favors. You're talking about institutions that are dependent on large direct and indirect subsidies for their revenue model and who are to some extent in the cross hairs of Obama administration reform efforts aimed at bringing down the underlying drivers of cost. These guys could definitely use a former Treasury Secretary or two to get their issues heard in the corridors of power. It's perhaps a set of issues that's unusually salient to me because the higher education lobby's headquarters is right by the Slate DC office. Nobody's pure in this world and obviously getting rich in the private equity game doesn't display the same level of selflessness as becoming a volunteer reading tutor in the South Bronx, but I think people flinging around accusations of corruption should think a bit harder.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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