Supplication in the House of the Dead

Depends on what you mean by “reach-around”

When I visited the office of a noted Wall Street gray eminence the day after Paulson accepted the job as treasury secretary, my host said to me, "There’s been a lot of talk about why he did it, and the best explanation I have heard is that he and a lot of the guys he is close to Worry about potential market disruptions that could be big problems if the right guy is not in there with his hand on the tiller. I think he feels like he can really add some value and that he may really be needed? (The mortgage crisis later suggested there may have been some merit to this thesis.)

It is remarkable that there has been a relatively low level of outcry about the steady flow of executives from 55 Broad Street to offices inside the Washington beltway. Vice chairman of Goldman Sachs International Bob Hormats, himself a former senior official, said, "It is fairly unusual. . . I think it is because it has been demonstrated that when Goldman Sachs people get into these jobs, they give no preference to Goldman Sachs. There is no shred of evidence that they use any of[133]their influence on behalf of Goldman Sachs. If there were, just once, given the remarkable activity of Goldman Sachs in the private sector, it would be over. There would be an incredible hue and cry."

Hormats’s observation resonates with [Bill] McDonough’s comment about senior financial executives knowing enough not to play too rough with one another. The good of all depends on the successful functioning of the system. Within the system, rules do not have to be broken (although they often are) to do well and exert enormous influence. One of the primary achievements of the leaders of the global financial community over the past several decades has been its ability to globalize markets while promoting the concept of self-regulation, or very light supervision. Having senior representatives of that community in the government helps ensure that this remains the case and that any regulatory initiatives that are put forth are crafted with them at the table in influential roles. Especially since these individuals ultimately usually return to the financial sector after their time in government, there are often more than just ideological rewards in store for keeping the system strong.
pp. 131-132

Rothkopf, Superclass - 2008