While working on a piece about a possible bailout for the Spanish government, I discovered a couple of things that were news to me
* The Economics Minister in the (pro-austerity) Spanish government is a former executive of Lehman Brothers
* Axel Weber, formerly the ultra-hawkish head of the Bundesbank went straight from that job to the chairmanship of UBS, of which the NYT recently wrote “The bank’s recidivism seems rivaled only by its ability to escape prosecution”
Comment seems superfluous to me, but I hope readers will prove me wrong on this.
{ 20 comments }
Dave Weeden 07.28.12 at 10:25 pm
Nope :-)
bob 07.28.12 at 11:09 pm
And Axel is also on the faculty of the University of Chicago’s business school,
http://news.uchicago.edu/article/2011/03/10/axel-weber-bundesbank-president-join-chicago-booth-faculty
where no doubt he feels right at home with political hacks such as Casey Mulligan and John Cochran.
bob mcmanus 07.28.12 at 11:42 pm
Mario Draghi, of course, vice-chairman of Goldman Sachs in Europe between 2002 and 2005.
Mario Monti, an international adviser to the firm since 2005.
Papademos was Governor of the Greek Central Bank between 1994 and 2002, and he apparently participated in falsifying accounts perpetrated by Goldman Sachs
another former-Goldman Sachs boy, Mark Carney, to become the next governor of the Bank of England
President Obama’s Chief Counsel Greg Craig is now working for Goldman Sachs.
Rittholz Nov 2011 had a chart but didn’t include everybody or all the connections
Keith Edwards 07.28.12 at 11:56 pm
I’m writing a science fiction novel in which the bad guys are a cabal of evil bankers who rig the world economy to collapse for their own personal gain. I thought I was writing satire, but it turns out I’m writing a documentary instead.
Jim Harrison 07.29.12 at 12:06 am
Not to change the subject too much, but I’ve got a great business plan I’m thinking of pitching on Shark Tank. My idea is to get ahead of the coming vogue for public executions by starting a company that makes guillotines. Here’s the wrinkle: I plan to sell the guillotines at cost and make my money selling replacement blades.
How are you fixed for blades?
Do you have plenty?
How are you fixed for blades?
Do you still have bankers?
Watcha think?
Tim Worstall 07.29.12 at 12:32 am
“The Economics Minister in the (pro-austerity) Spanish government is a former executive of Lehman Brothers”
Not entirely convinced.
http://en.wikipedia.org/wiki/Luis_de_Guindos
Seems he was a director of the local operations (is that an “exective position”?) after he’d been no 2 or 3 in the economics ministry under the previous conservative government.
Now, if we’re to say that politicians out of power shouldn’t then go off and make fortunes peddling their former contacts with government then I’m right with you. For I would argue that such political contacts shouldn’t have value that is worth purchasing as political involvement in business should be limited to setting the rules, not deciding who wins.
But that applies to right and left. For example, the local politicians who bankrupted Spain’s cajas (for both and all parties). Even to such as Rubin in the US.
But in detail here, he wasn’t a Lehman bloke who then became a politician. He was a politician who went to Lehman because politicians, even out of power, are worth buying. That being the real problem here.
Tim Worstall 07.29.12 at 12:34 am
“He was a politician who went to Lehman because politicians, even out of power, are worth buying. That being the real problem here.”
To remind of PJ O’Rourke’s point: when legislators can decide what is bought and sold then the first thing to be bought and sold will be legislators.
John Quiggin 07.29.12 at 1:14 am
So, I guess Guindos has shown he *can* go three rounds with a revolving door
Dave Weeden 07.29.12 at 2:00 am
Tim,
I understand and sympathise with your complaint. But, legislators, by definition, have always decided what can be bought and sold. I’m a libertarian in that I have no problem with heroin being bought or sold, but I do have a problem with people being bought and sold: I’m glad that we abolished and prohibit slavery.
The obverse seems to be that anyone can decide what can be bought or sold — except legislators, who have somehow excused themselves. I think the current crop of politicians (even those in your party Tim, although my gf wants to give them 20 quid, rather against my wishes) are poor, but surely the point of being an /elected/ politician is that you have /additional/ powers, not that you divest some.
John David Galt 07.29.12 at 3:21 am
As I understand it, UBS’s only “crime” has been to keep its customers’ identities secret from US authorities, as it is required to do under Swiss law. If they did anything wrong it was to compromise their ability to continue doing that by opening branches in the US.
JP Stormcrow 07.29.12 at 3:41 am
Ah yes, Switzerland–the Caymans of the Alps.
MPAVictoria 07.29.12 at 4:30 am
“As I understand it, UBS’s only “crime†has been to keep its customers’ identities secret from US authorities, as it is required to do under Swiss law. If they did anything wrong it was to compromise their ability to continue doing that by opening branches in the US.”
Won’t somebody please think of the swiss bankers!?!?!
Random Lurker 07.29.12 at 7:48 am
I think that the problem is not just corruption but also “experience”.
For example suppose you are the president of Italy and you need a premier to survive a bad economic crisis. Would you choose a former financier or, say, a former dentist?
This is a problem. because it means that most of the political ruling class will come from the economic ruling class (that today means managers and financiers).
P O'Neill 07.29.12 at 8:57 am
The imf is also an important transit point.
http://www.nytimes.com/2012/06/27/business/global/spanish-officials-hailed-banks-as-the-crisis-built.html?pagewanted=all
Barry 07.29.12 at 2:52 pm
My personal opinion of the Euro crisis has been that it’s simply an effort by the elite bankers to make sure that they get paid for their bad investments, no matter what suffering and disaster befalls others. For example, from what I could gather the ‘bailouts’ were always 90% immediately leaving the allegedly bailed out country, to pay the foreign bankers.
Satan Mayo 07.29.12 at 6:26 pm
I understand and sympathise with your complaint. But, legislators, by definition, have always decided what can be bought and sold.
What?!?!? Next you’ll be disagreeing with “A government big enough to give you everything you want is big enough to take away everything you have”! Just because almost every government on earth is already big enough to take away everything you have, and always has been, doesn’t mean this isn’t a very, very valuable aphorism.
ajay 07.29.12 at 6:44 pm
Barry: no. Haircuts. See many, many previous threads.
dsquared 07.29.12 at 8:06 pm
As I understand it, UBS’s only “crime†has been to keep its customers’ identities secret from US authorities, as it is required to do under Swiss law.
might want to learn a bit more before you start quoting two-way prices in that share, tbh.
Cahokia 07.31.12 at 4:21 pm
Ok, slow thread.
How about we slag the women who prop up these men?
“My friend Marie is smart and kind. Her husband is a banker and they live in Surrey: “I wasted everything, everything. He plays golf when he isn’t working. I hate him. I thought I was being so clever to get him. Now I know how stupid I was. Young girls mustn’t do what I did. They just mustn’t”. Her two sons have married PTWs. Such women aren’t listening now. They will one day, sooner than they think….
Identikit footballer’s wives and girlfriends, TV’s Desperate Housewives and some male politician’s spouses are the antecedents to these latest happy no-doers. A Tory minister in Thatcher’s government once asked me to be his mistress in exchange for a flat in Knightsbridge and reassured me his wife didn’t mind as she had her big house and privileges, all she really wanted. ( I’ll name him when he dies). At my daughter’s school, a number of mums went to university, never worked, bagged a man who was wealthy or was going to be. They shopped, met up at the posh members-only gym, went on holidays and ski trips, did up second and third homes. What a waste of life, brain, human potential. Their daughters, even if excellently educated will, depressingly, have learnt all the wrong lessons from mum.
Female success, like female beauty, has undergone a total makeover and the reconstruction is so ingenious, so skilfully achieved, there are no unsightly signs of what it once was. Some call it the “feminisation of feminism”.”
http://www.independent.co.uk/opinion/commentators/yasmin-alibhai-brown/yasmin-alibhaibrown-if-girls-are-aping-kate-and-kim-were-in-trouble-7986009.html
(went to this paper trailing the Twitter/NBC vs. Guy Adams dust up, and this was the most popular story)
Bloix 08.01.12 at 2:35 am
Reuters today:
UBS Chief Says Bank Isn’t Central To Libor Investigations
By Elena Logutenkova – Jul 31, 2012 9:16 AM ET
UBS AG (UBSN) Chief Executive Officer Sergio Ermotti said there is no reason to single out the Swiss bank in the probes regulators worldwide are conducting into the possible manipulation of London interbank offered rates…
UBS is among firms including Citigroup Inc., Royal Bank of Scotland Group Plc and Deutsche Bank AG being investigated worldwide for practices in setting Libor…
UBS said previously that it received conditional immunity or leniency for cooperating with the U.S. Justice Department and Swiss Competition Commission’s antitrust investigations into submissions of yen Libor and the euro-yen Tokyo interbank offered rate, or Tibor…
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