Tuesday, March 17, 2009

Rewarding Incompetence: Citigroup's Chief Economist Gets Treasury Gig

I wonder if all those folks howling about AIG bonuses will muster up any feigned outrage over this announcement. Nothing like rewarding a guy who helped oversee $37 billion in losses over the past year. Come to think of it, he seems to be a natural for the Obama administration.
Citigroup Inc.'s chief economist is leaving the New York company for a job at the U.S. Treasury Department, according to an internal Citigroup memo.

Lewis Alexander, who has been at Citigroup since 1999 and before that worked at the Federal Reserve, will head to Treasury "to work on domestic financial issues," said the Citigroup memo, which was sent Tuesday.

According to a government official, Mr. Alexander will be a counselor to Treasury Secretary Timothy Geithner. Mr. Alexander and a Treasury spokesman weren't immediately available to comment Tuesday. A Citigroup spokesman declined to elaborate on the company's memo.

Mr. Alexander, who was the Commerce Department's chief economist from 1993 through 1996, is joining Treasury at a time when the department is scrambling to beef up its ranks of senior officials. The current staff shortage has fostered doubts on Wall Street and in Washington about the Obama administration's ability to get its arms around the financial crisis.

The Obama administration so far has largely avoided tapping Wall Street officials for senior spots at Treasury, wary of stoking the mounting political backlash surrounding the federal bailouts of the finance industry. That has irked top executives at some major banks, who say they can't get an audience with top Treasury officials.
This is sure to help stem any backlash. Besides, this guy sounds like a real gem.
Mr. Alexander's role as Citigroup's chief economist didn't entail significant management responsibilities. But his optimistic economic forecasts colored executives' views that the U.S. was unlikely to face a prolonged slump.

"I think that's not going to spill over more broadly into the economy, and so I think we're going to have a normal kind of housing cycle that's going to last through the middle of this year," Mr. Alexander said in a Feb. 28, 2007, interview on PBS.

In the past five quarters, Citigroup has booked a total of more than $37 billion in net losses, largely stemming from the company's overexposure to the U.S. real-estate sector.
You just can't buy such savvy experience.

It'll be curious to see what kind of going away present he gets from Citigroup.

I guess it helped that Alexander was a maximum contributor to Barack Obama.

Nice payoff.

No comments: