In Through the Out Door

Government has long been described as a revolving door.  Many industry experts take a break from their careers and spend some time working at senior levels in Government, while young professionals often work a few years at a government agency in order to develop a unique expertise that benefits their eventual private sector career. 

Unlike some, I don't find the revolving door to be a problem.  I spent about ten years in state government and for the last eight years I've been in the private sector. 

Former government employees come in two camps:  those who know people and those who know stuff.  If you are looking for a lobbyist who can help you work with elected officials, you want a former government employee who knows people.  Ideally, you want to hire the former staff of a high-ranking elected official.  Some people don't like it, but that's the way the system works. 

Then there's the other category, people who know stuff...really complicated stuff.  If you want to build a $2 billion pipeline and you know you can't get a FONSI, you better have a NEPA expert do your EIS and the best NEPA experts used to work at EPA.  You get the picture.  The guy who understands the IRS used to work at the IRS; the guy who won't screw up your air shed permit is the guy who used to process them at DEQ. 

Both of these examples of the revolving door are well within the ethical rules.  But the revolving door becomes a legal and ethical problem when a guy who knows PEOPLE markets himself as a guy who can help with complicated STUFF.  "Having trouble with your air shed permit?  Well, I play golf with the agency director and for $10,000 a month, I can help you with your project."  That's influence peddling. 

Just because you are friends with some agency director doesn't make you qualified to guide someone through the technical aspects of government--permitting, procurement, grant programs etc.  And if you market yourself as someone who can "get things done" at a regulatory agency because you have a special relationship with the agency director, then you are simply cashing in on a friendship and you are putting yourself (as well as your Agency Director friend) in serious jeopardy.

The political team at Arizona Republic has unearthed such a relationship, but they didn't seem to understand the significance and treated the whole story as a joke.  Here's the political insider from last Sunday. 

Smooth landings for some...Jeanine L'Ecuyer, former spokeswoman extraordinaire for the former Napolitano administration is linking up with Ziemba Waid Public Affairs.

L'Ecuyer will serve as communications director for the Phoenix-based public-relations firm, founded by prominent Democrats Tom Zimba nd David Waid, both friends of Napolitano's.  Not coincidentally, the firm is opening a new branch in D.C., putting the Ziemba/Waid team in close proximity to Napolitano's new gig leading the grant machine (read:feed trough) that is the U.S. Department of Homeland Security. 

The Insider prides itself on being tongue in cheek, but I can't imagine that the reporters simply made that up, and if it's true, it would be an extraordinary ethical violation. 

Let me be clear, any friend of Janet who thinks they can cash in on their relationship by helping clients get favorable treatment from the Department of Homeland Security--whether by getting grants, procurement contracts, or even just facilitating access--is no friend of Janet and is likely to eventually find themselves answering questions from the Department of Justice.

Some doors in government revolve, but some of them clang shut with a loud electronic locking sound.  Understanding which actions lead to which door is the key to having a long and successful career.

Comments

[Peeves]

Holy Cow!

[Chet]

Could someone explain to me exactly what Noah Kroloff understands about Homeland Security policy?

[Blackbird 03]

This administration is shaping up to be the most corrupt on record. Tax cheats, liars, influence peddlers, cronyism extraordinaire, sweetheart mortgages, regulatory interference, funneling public funds to friends (banks), stimulus spending for std protection and condoms, etc.

These guys are done before they even started. Time is up. Let's send them all home.

[Jim Torgeson]

It is no surprise that J-No's cronies feel comfortable saddling up for another feeding frenzy.

She is what she is.

[Retrorv]

"This administration is shaping up to be the most corrupt on record." And only a week into the administration! Gotta love that in depth perspective.

[Travis]

Retrorv: What is "in depth perspective"? If you mean there was no in-depth research - why would it be needed when the corruption is not hidden - it's simply excused.

In the words of the Democrats lately - It is what it is.

[Not the Decider Anymore]

"Let's send them all home."

Indeed. Someone has been sent home. Over the past two years, 14 Republican senators, 50 Republican representatives, John McCain back to his seat in the Senate, Sarah Palin back to shooting moose, Bush back to an all white neighborhood in suburban Dallas (the stage-prop "ranch" is no longer needed) and Cheney back to Wyoming to torture whomever he pleases.

Elections have consequences. You lost. Repeatedly and thoroughly. If you want back in charge, you'll have to do better than this. Ad nauseum hatred of Janet Napolitano and labeling a one week old presidency "the most corrupt on record" aren't going to work. But I must admit, I enjoy hearing it. The deeper you dig yourselves in, the easier it's going to be for the rest of us to run the country without you.

[Blackbird03]

Well at least I can cling to my guns and religion...

[Sam]

Let’s recap, shall we?

In the first week, Obama has not cut taxes — the only proven way to revive the economy — despite promising to do so for “95% of working Americans” (which was almost certainly a lie, but let’s wait and see); signed an order to close Gitmo, certain to make America less safe; and promoted abortion on a global scale. And snubbing the Medal of Honor winners on Inauguration Night.

Oh, and most of his senior staff was served with subpoenas.

And for week two? California - bluest of the blue states - delaying tax refunds because they're out of cash. New York - another of the bluest of the blue - trying to tax MP3s among everything else. A Treasury Secretary who didn't feel like paying taxes. A sitting President bashing a radio talk show host. Sitting President's party starts a petition against said radio talk show host. A surrender to Al-Qaeda on al-Arabiya. And an abortion of a stimulus bill that netted nary a Republican vote.

Heck of a job, Obammy.

Fortunately, America will get a case of buyer's remorse and make 2010 and 2012 a repeat or better for the Congressional elections of '94 and '96:

-8 for the Ds in the Senate
-62 for the Ds in the House

[Jim Torgeson]

Hey, it's only been a week. Just see where it goes before pronouncing the outcome.

[todd]

Sam,
Where do you get this nonsense about tax cuts being the only proving way to revive the economy. I know this is dogma in some circles but guess what - its not true. Both times when supply-side economics have been tried - 1981 and 2001 - the resulting growth has been pretty poor when compared to the post tax increase of 1993. What does stimulate the economy is large scale public works projects.

[Sam]

Wrong, wrong, wrong.

http://www.engdahl.oilgeopolitics.net/History/New_Deal/new_deal.html

A couple of nuggets, since you are obviously incapable of understanding basic economics or finance:

"By 1931 unemployment was at 16.3% of the workforce, peaking at 25.2% on FDR's inauguration in 1933. Yet by 1938, unemployment was still a staggering 19.1% of the workforce, and in 1939 it remained stubbornly at 17.2%."

"Why eight years of Roosevelt economic policy produced such disastrous economic recovery results, is the crucial question. The answer appears to be that the group of men who advised the President on economic and social policy during the peace years of the Depression, were focussed on a broad social agenda, one of using the depression crisis to shift the United States from a market economy, which they contemptuously termed "laissez-faire capitalism," towards a State-dominated economy of central planning."

You are confusing tax rebates with tax cuts. Low tax rates encourage new wealth creation. Tax rebates merely redistribute existing wealth.

Take the 2001 tax rebates. Washington borrowed billions from the capital markets, and then mailed it to families in the form of $600 checks. Consumer spending temporarily rose, and capital/investment spending temporarily fell by a corresponding amount. This simple transfer of existing wealth did not encourage productive behavior. The economy was sluggish through 2001 and much of 2002. Of course, 9/11 had a hand as well.

It was not until the 2003 tax cuts, which lowered tax rates for workers and investors, that the economy finally recovered. In the preceding 18 months, business investment was down sharply, the stock market had dropped 18 percent, and the economy had lost 616,000 jobs. In the 18 months following the 2003 tax rate reductions, business investment surged, the stock market leaped 32 percent, and the economy created 5.3 million new jobs.

[Chad]

Todd -- you forgot Clinton cut taxes and froze government spending in 1995 (all due to the newly elected Republican congress). That's why the economy took off in the late 1990's.

For better or worse, Republicans will not regain the Congressional majority until 2012, and will not be able to save Obama the way they saved Clinton in 1994.

[todd]

Sam - the below counter all you silly arguments. Sorry guys - tax cuts, unless the tax rates are close to 100%, have very limited impact on stimulating economic growth.

http://www.americanprogress.org/issues/2008/09/pdf/supply_side.pdf

http://www.epi.org/briefingpapers/221/bp221.pdf

[DGN]

Just one question, Todd.

Do you pay extra on April 15th, or just what the government requires?

If you really think added taxes are a stimulative, pay more voluntarily.

[James Davidson]

Todd: Please read the following incisive analysis:

President Kennedy to the Economic Club of New York, Dec. 12, 1962:

"But the most direct and significant kind of federal action aiding economic growth is to make possible an increase in private consumption and investment demand — to cut the fetters which hold back private spending. In the past, this could be done in part by the increased use of credit and monetary tools, but our balance of payments situation today places limits on our use of those tools for expansion. It could also be done by increasing federal expenditures more rapidly than necessary, but such a course would soon demoralize both the government and our economy. If government is to retain the confidence of the people, it must not spend more than can be justified on grounds of national need or spent with maximum efficiency. And I shall say more on this in a moment.

"The final and best means of strengthening demand among consumers and business is to reduce the burden on private income and the deterrents to private initiative which are imposed by our present tax system — and this administration pledged itself last summer to an across-the-board, top-to-bottom cut in personal and corporate income taxes to be enacted and become effective in 1963.

"I'm not talking about a "quickie" or a temporary tax cut, which would be more appropriate if a recession were imminent. Nor am I talking about giving the economy a mere shot in the arm, to ease some temporary complaint. I am talking about the accumulated evidence of the last five years that our present tax system, developed as it was, in good part, during World War II to restrain growth, exerts too heavy a drag on growth in peace time; that it siphons out of the private economy too large a share of personal and business purchasing power; that it reduces the financial incentives for personal effort, investment, and risk-taking. In short, to increase demand and lift the economy, the federal government's most useful role is not to rush into a program of excessive increases in public expenditures, but to expand the incentives and opportunities for private expenditures."

[todd]

James - the top marginal tax rate at the time was 90% and i already said that this doesn't apply to tax percentages that high.

DGN - I did not say higher taxes stimulate the economy. I said most tax cuts do not and that the economy has seen growth even after taxes have been raised.

[James Davidson]

Todd:

The logic is the same. Tax cuts do stimulate the economy. Even Lord Keynes admitted that. Particularly if they are made permanent and thereby increase the rate of return on investment.

[Huppenthal]

*When Coolidge cut the top tax rate from over 70% to 25%, we had the roaring 20's.
*When Kennedy reduced the top income tax rate by 20 percent, the Dow Jones went to a 1,000.

*When Reagan reduced the top income tax rate from 57% to 28%, we went on a 20 year growth binge and the Dow Jones went to 14,000.

*When the Democrats in Congress increased the top tax rate from 25% to 63% (1931) the unemployment rate went to 25% (1932).

*When the probability of Obama becoming president hit 75%, (Intrade) the economy collapsed. After all, who is going to invest in an economy with 60% plus income taxes on wealth creators?

[todd]

Huppenthal,
The stock market is not the measure of our economy. We have had massive wage stagnation and further wealth concentration with corporations paying less as into the total tax revenue. For those of us not in the top 1% this has not been a boom time.

As to your other examples - you want to hold up the economic result Coolidge's economic policies feel free and most of us realize that the unemployment rate jumped in 1932 because of the larger depression. To blame it simply on tax increases is foolish.

[Sam]

Like this morning, I'm sure Todd will cite some more "progressive" websites to back up his completely bogus claim.

Todd, admit it -- you're not particularly bright. Every single one of your weak points -- especially the "large scale public works projects" -- has been repeatedly and thoroughly shot down by numerous posters. All you can do is quibble about minor details.

Before you run your mouth off and look dim on economics again, take a course in macro and microeconomics.

[Jim Torgeson]

This is a stupid argument. Is someone really defending higher taxes?

I don't beed the government to spend my money for me. If I want to be charitable, I will.

That being said, I'm not so concerned about how high my taxes are today. I am concerned that they are wasted by inefficiency and indifference.

If every American felt taxes were a good investment, they would stop complaining and not get repulsed by possible increases.

As it stands, my government blows my money every chance it gets.

When people have an extra dollar to spend, they do. When people have an extra dollar to save, they do.

The government gets plenty off sales tax, income tax, K1 and everything else attached to a retail sale or service. Why do they need even more and deny taxpayers what they are trying to buy?

[Lance E]

Regarding tax cuts, Keynes' entire theory was either tax cuts or govt. spending to stimulate the economy and he made statements indicating he preferred tax cuts. The Kennedy quote above came after John Kenneth Galbraith, the most prominent liberal economist after Keynes, told him to cut taxes to stimulate the economy. Galbraith's successor to the title of top liberal economist, nobel laureate Paul Krugman, said three weeks ago: "There's a reasonable economic case for including a significant amount of tax cuts in the package, mainly in year one." He said this in an environment where the top marginal rate was in the low thirties. No serious person thinks that tax cuts do not provide economic stimulus. Finally, citing www.americanprogress.org? You've got to be kidding.

[Lance E]

Actually, in fairness, Galbraith went back and forth on the tax cut, depending on which group he was addressing at the time, but every other economist on Kennedy's Taxation Task Force, all liberal Keynesians from Harvard, enthusiastically backed a tax cut.

[todd]

Sam,
I think a man turns to insults when he is unable to back up his arguments with actual information. You do this repeatedly which is why it is clear to me you are unable to engage with anyone who doesn't share your viewpoint because anyone who disagrees with you is an idiot. I won't bother in the future to even respond to your posts.

As to David and Lance E - I am not sure it is the case that Keynes preferred tax cuts at all. We can see in the following open letter to Roosevelt, which advise Roosevelt did not follow until years later.
http://www.guardian.co.uk/commentisfree/cifamerica/2008/nov/25/john-maynard-keynes-us-advice

Keynes claims 3 things can go into a recovery :
"Individuals must be induced to spend more out of their existing incomes; or the business world must be induced, either by increased confidence in the prospects or by a lower rate of interest, to create additional current incomes in the hands of their employees, which is what happens when either the working or the fixed capital of the country is being increased; or public authority must be called in aid to create additional current incomes through the expenditure of borrowed or printed money"

Later in the letter his suggests a series of proposals for Roosevelt to take. The first is for government to pump into the economy a large amount of money so as to, as in the paragraph above, create "additional current incomes through the expenditure."
He then suggests large scale projects and gives the example of " the rehabilitation of the physical condition of the railroads." As he says this it to get the economy going.

The second option he gives is to reduce long-term interest rates. At this point this option is not really available because there is very little further room to lower them.

The first option is difficult to achieve since in times of economic distress people save money, which is the sensible thing to do, but which is actually detrimental to efforts to stimulate the economy. Once "the ball gets rolling" and people begin to get some confidence back the money which has been saved by people from the tax cuts might help create a wave of spending, but tax cuts in and of themselves will do nothing when the economy is this far in the tank.

Lance E - I do think you should not discount the articles I posted because you don't like the politics of the group. I often look at articles published by groups I disagree with and sometimes find holes in the arguments or they alter my viewpoint.

Again, the Keynesian program for getting out of a deep recession depends on large-scale public works projects.

[Sam]

You're not very bright -- and you're not too tolerant of opposing viewpoints, either (e.g. "silly," "dogma," "nonsense," et al). I'm glad you've admitted defeat and will move on.

Keynes was wrong, still is wrong, and will be proven wrong again.