Bailout

Pimco picks up Kashkari

By Felix Salmon

It looks like Neel Kashkari did manage to get that financial-services job by year-end after all: he’s moving to Newport Beach and joining Pimco as a managing director in charge of “new investment initiatives” (which seems to mean, at least in the first instance, equities). You can be sure he’ll be earning substantially more there than he would have been making had he simply stayed in “Information Technology Security Investment Banking”, whatever that might be, at Goldman Sachs.

Pimco seems to be establishing itself as a key part of the revolving-door structure in contemporary finance: if you’re a senior government bureaucrat making decisions affecting the financial industry, there’s a good chance that if and when you leave there’ll be a job waiting for you in sunny southern California. It’s win-win for everybody: technocrats will tend to treat the financial industry with kid gloves when they’re in power, so as to maximize their chances of getting a good job upon their exit, while the likes of Pimco “make billions” as a result of doing so.

Who, in this clubby world, will stand up for the rest of us? Is there any way to prevent civil servants from parlaying their experience into seven-figure salaries in the private sector once they leave government? The short answers, of course, are no one, and no. If Pimco feels no compunction about hiring the likes of Greenspan and Kashkari today, it’s certainly not going to stop doing so tomorrow.

Full post as published by Macroprudential on December 07, 2009 (boomark / email).