The Revolving Door

I agree with Ezra Klein that sometimes people get too upset about the “revolving door” phenomenon, but in this post I think he misstates the main objection to it:

My hunch is that this is fundamentally because of money. If the public thought that expertise was the actual good being provided, they wouldn’t mind very much. But the trail of cash suggests that the real trade is that firms and groups give money to former players, and then those former players give money to their former colleagues, and what the firms and groups end up getting isn’t an explanation of how the committee process works, but some giveaway that they bought at the expense of the public. Put differently, the market isn’t for people who can navigate the government. It’s for people who know how to bribe it.

As I understand it, the concern is that the the job itself is a bribe. In a super-crass version of this, Firm A says to Regulator Z “you won’t be in this job forever, but if you make a lot of decisions favorable to Firm A then we’ll hire you after you quit.” In a more realistic version what happens is that Regulator Z observes that many of his predecessors have gone on to lucrative careers in Industry A and that they probably couldn’t have had if they’d pissed off all the Industry A CEOs. This biases his decision-making in a problematic way.

Sometimes I think this problem is more apparent than real. Any conceivable set of decisions that the FCC makes is going to be favorable to some set of large corporations. So being in the pocket of “big business” as such isn’t a big problem. But sometimes the problem is very real. The entire financial reform debate, for example, has featured a lot of ideas that put the interests of the financial sector as such at stake. Many observers, including Ezra Klein, have posited that shrinking the size of the financial sector overall should be a goal of reform. Obviously, though, people with an ambition to go get jobs in the financial sector are unlikely to espouse such goals.