WH Ignores Yellen $800k Speaking Fees from Firm Bailed Out GameStop Hedge Fund
realclearpolitics.com
realclearpolitics.com
Let’s say you take that $10bn and manage a portfolio with ~30% a year volatility.
So you pay $300m to manage a bunch of assets that move around by ~$3bn a year.
All of a sudden paying $500k for a speech, a dinner, and a the start of a relationship with a top 10 government policymaker, seems like a bargain.
Same reason Clinton and Obama can do the same after the leave office. Part wisdom, part networking.
Doesn’t have to be nefarious to be a good investment when your business is that scale.
You cannot have people responsible for policy also being paid by organisations that they are meant to oversee. The biggest thing that keeps a democracy a democracy is trust in institutions. The last two decades we have lost an immense amount of trust in our institutions, and it is going to be very difficult to get it back. Speaking fees of $800 000 for former public servants and public servants to be anointed does not help.
Hedge fund billionaires, bankers and policy makers on the other hand aren't going to show up to listen to what johnny depp has to say. So you have to pay for someone who will be draw for them. The higher the status of the customers you want, the more you'll find yourself paying.
In the case of Comic-Con, they do that because their audience who pay for their tickets are more likely to pay if the actors they like are part of the experience.
In this case, we are talking about companies paying people exorbitant sums for no other reason that at some point the speaker may be in a position to affect the flow of government largess.
Even "networking" in this context is geared towards signaling to friend & foe that you now have inside reach to people whose actions or even mere words can move mountains of money in one direction or another.
Totally different.
By the way, this is standard textbook economic analysis and it would not be different if the names and political parties were switched.
I don't see how they are different at all. The talker is used to bring in a certain type of person they're looking for. How they convert that persons attendance in to a return for their business is irrelevant. Comic-on doesn't just make money on tickets, bringing those customers in also leads to them making more transactions inside
> In this case, we are talking about companies paying people exorbitant sums for no other reason that at some point the speaker may be in a position to affect the flow of government largess.
That's conjecture and no we aren't. We were specifically discussing “wall street speaking fees” and why they demand such a high rate. Which there are clearly other valid business incentives other than the one you've landed on.
As to whether this specific case had nefarious motives. I don't know enough to have a strong opinion either way.
She was a decent economist. Her work not associated with politics ended as the 20th century was in the rearview mirror. Take a look at her bibliography[1]. The interesting non-proceedings/non-Fed papers end in the 90s.
There are many other economists who are just as good (i.e. capable of talking at length in sleep inducing tone without providing any deep insight but making general statements about topics that sound like they should be interesting). No one pays them a bazigillion bucks to read their policy papers out loud.
What evidence do you have that she gets paid the bucks due to her attributes as a speaker?
I have organized business events and while I haven't ever been involved with hiring someone as high profile as Yellen, I can certainly understand why she could command an $800k speaking fee. I have seen speakers with much less cachet (very little chance you have ever heard of them) draw $50k speaking fees.
Also, this wasn't one speaking fee for Yellen, it was multiple multi-day events over s period of time.
People are paying $250k for a single speech from Malcolm Gladwell or Seth Godin and they are presumably not getting any political benefits for hiring them. So I see nothing odd about Janet Yellen getting $800k total for several speeches.
Just think the type of people you get in to the same room who normally wouldn't give you the time of day if you had obama agree to give a private talk.
Status, connections (implied or otherwise), exclusivity and, sometimes, education.
However I've also seen speakers (in the pharma industry) who just turned up and gave a mediocre speech on topics we were already cognisant and then return to their job as Key Selection Maker at Hospital X with a fatter wallet then they arrived, and having spent a few days in a sunny location with some very drunk sales reps.
---
What do you think of Bitcoin or cryptocurrencies as a broad category?
PAUL KRUGMAN: It’s a solution in search of a problem. I’ve done this. I’ve made quite a lot of money on Bitcoin.
EZRA KLEIN: No kidding.
PAUL KRUGMAN: Not by investing in it, which I would never do. But by being the designated enemy at Bitcoin conferences and getting paid speaking fees.
[LAUGHTER]
---
You can only do this when they are not officially working for the government of course. But government/consulting is just a revolving door.
That's hardly "ignoring" the "speaking fees" that Yellen earned as a private citizen. Nor is garnering speaking fees a reason to "recuse" from offering advice. No one would be able to offer the POTUS any advice on their field of expertise if this is the bar that is set.
Keep grabbin' after those straws.
1. WH did not ignore the question. The press secretary declined to speak POTUS or Yellen's mind for them, and instead implied that it would not be a problem if Yellen did recuse because there was a full economics team. Ergo - the headline is bunk.
2. CoI declarations and recusals are for when someone stands to gain, where someone has previously gained and feels beholden, or where the impression of a CoI might arise. Yellen spoke to many, many firms but, due to the fact she was only paid to speak, likely does not feel beholden to these firms now or in the future. Ergo - the lede is bunk.
3. People who are hired by governments to offer advice do so within the domain of their expertise. Now, perhaps there are a few eager amateurs out there who have never drawn a paycheck in their area of expertise, but to state that Yellen should not advise the President on the biggest stock market scandal of the year because she once drew a paycheck for talking to them at one time is a damn long bow to draw. Where else is the POTUS going to get advisors except from the firms who pay the most money to get the best employees / speakers? The local CPA? Ergo - the wider implication is bunk.
So the headline, lede and implication of the article are bunk. Given that this article is from a pro-Trump news aggregator / commentator site, and given that politics has become so polarised, this appears to be the conflating of a molehill with a mountain for the sake of political gain.
Ergo - straw grabbing.
I'm not convinced that everyone who's knowledgeable enough to preside over this hearing has been paid by this specific firm.
Nobody's saying that the advisor on this issue needs to have never given a paid speech or worked for one of the big players. They're saying that the advisor should not have been paid $800,000 by Citadel over the course of multiple speaking arrangements because that's an obvious sign of a preexisting relationship and therefore a conflict of interest.
Literally every economic decision Yellen has to advise upon will affect some firm or organisation to which she has provided services.
> Nobody's saying that the advisor on this issue needs to have never given a paid speech or worked for one of the big players.
But this is exactly what you are saying by implication. Whatever regulatory outcome occurs here will affect all trading firms, which means that all advisors will have been paid by someone at some stage in the past affected by any outcome.
> They're saying that the advisor should not have been paid $800,000 by Citadel over the course of multiple speaking arrangements because that's an obvious sign of a preexisting relationship and therefore a conflict of interest.
That is not how conflict of interest works. If there is no current relationship, and no indication of a future relationship (e.g. quid pro quo or a promise of employment), and no obvious link to the firm (e.g. an unpaid board seat, etc), then I am finding it hard to see how a conflict of interest might occur.
That's unavoidable, but it doesn't change the absolutely controllable and simple request that the investigator not have a direct relationship with the firm in question.
> That is not how conflict of interest works. If there is no current relationship, and no indication of a future relationship (e.g. quid pro quo or a promise of employment), and no obvious link to the firm (e.g. an unpaid board seat, etc), then I am finding it hard to see how a conflict of interest might occur.
Conflicts of interest do not have to be concurrent in order to be disqualifying. Recusal as an administrative official is generally warranted when one's impartiality could be reasonably questioned due to some significant past-or-present relationship with the parties involved that reaches beyond their role as a public servant.
The Press Secretary chose to reason about her accomplishments to explain the large sum of money (I don't think any Americans are surprised that former bureaucrats profit off of the system after participation.) I think some would call that "dodging" because she's not really directly answering the question. How to not be dodging => "We take conflicts of interest, undue influence, and affiliation seriously. You will have an answer as soon as POTUS is properly briefed as to your readers concerns."
> CoI declarations and recusals are for when someone stands to gain, where someone has previously gained and feels beholden, or where the impression of a CoI might arise. Yellen spoke to many, many firms but, due to the fact she was only paid to speak, likely does not feel beholden to these firms now or in the future. Ergo - the lede is bunk.
This ignores that any person can be motivated to benefit people who have benefitted them prior. Maybe she's made enough money to sustain herself in the event that she upsets enough former clients in the process of making decisions that benefit the American people, maybe not though. That question is worth answering when someone makes close to a million dollars by just speaking. This is precisely what recusal is for, and since she was forthright about it before I think it makes sense to at the very least entertain the request (which this wasn't even a request, this was more like, "Did you know and what do you plan to do?")
> People who are hired by governments to offer advice do so within the domain of their expertise. Now, perhaps there are a few eager amateurs out there who have never drawn a paycheck in their area of expertise, but to state that Yellen should not advise the President on the biggest stock market scandal of the year because she once drew a paycheck for talking to them at one time is a damn long bow to draw.
Again, Yellen has benefitted from one of the key players. If there are outcomes that could potentially benefit them then it makes sense to identify conflicts of interest early. I don't know why that wouldn't be a priority to this administration given the last four years of administration we've had.
> Where else is the POTUS going to get advisors except from the firms who pay the most money to get the best employees / speakers? The local CPA? Ergo - the wider implication is bunk.
From advisors who haven't spent time or benefited directly from firms involved. As you and the Press Secretary stated, there's a wider economics team that is useful here, I'm sure a non-zero amount of them are both qualified and do not have some first order conflict of interest. That said, asking the question of whether she has a conflict of interest, and even her association, I don't think outright means she needs to recuse herself. If she were leaning in the direction of giving something of a beneficial outcome to Citadel, then maybe recusal would make sense. That is a decision she and the Biden administration will have to live with, but as I said before, not an unfair question to ask.
> So the headline, lede and implication of the article are bunk. Given that this article is from a pro-Trump news aggregator / commentator site, and given that politics has become so polarised, this appears to be the conflating of a molehill with a mountain for the sake of political gain.
When I googled the headline only conservative websites came up. That doesn't mean much though.
> Since the end of 2017, Real Clear Politics has had a rightward, pro-Trump turn in its content. According to a 2020 Knight Foundation study, RealClearPolitics is generally read by a moderate audience, leaning slightly toward the right
Source: https://en.wikipedia.org/wiki/RealClearPolitics
This same concern was presented by the Guardian prior to any GameStop drama and before Biden was President: https://www.theguardian.com/business/2021/jan/01/janet-yelle...
So, does the question deserve to be asked: I think yes, it sounds fair to ask. Does she need to recuse herself? Well, that's a question that ultimately only administrations and she can answer.
> The Press Secretary chose to reason about her accomplishments to explain the large sum of money (I don't think any Americans are surprised that former bureaucrats profit off of the system after participation.) I think some would call that "dodging" because she's not really directly answering the question.
... this is not a conflict of interest, and implying that it is a conflict of interest is NOT the press sec's job. It is not dodging to reject the premise of the question and explain how advice might be handled in a hypothetical case. Was it perfectly explained? No, but it is telling no other media outlet really thought the response was odd.
> This same concern was presented by the Guardian prior to any GameStop drama and before Biden was President:
Is the practice shady? Perhaps. Is Yellen doing anything wrong by working on the talk circuit? No. The precedent is well established and you would be hard-pressed to find an accomplished and competent bureaucrat who has worked directly for POTUS who hasn't either left for directorships in the private sector or worked the talk circuit. The practice is not considered conflict of interest and until that is changed this just has all the appearances of a cherry-picked example which, coincidently, targets a woman in a traditionally male position.
I did not unilaterally declare that there is one. I said enough of a situation exists to warrant asking the question. You called it a straw man, I said it looks vaguely conflicting enough to be an appropriate question.
> and implying that it is a conflict of interest is NOT the press sec's job
This is what I said might've helped: "We take conflicts of interest, undue influence, and affiliation seriously. You will have an answer as soon as POTUS is properly briefed as to your readers concerns."
I don't really see how this implies that there is one. In fact, it feels like pretty lukewarm corporate PR to me that admits to nothing and commits to very little. I thought I was being pretty fair here.
> No, but it is telling no other media outlet really thought the response was odd.
Not really, and I'd encourage you not to rely on this logic. I'm not a Republican or a Democrat or really anything in between. Maybe independent sums me up? Who knows. Regardless, while this vantage point routinely gets me whalloped over the head with mainstay arguments and talking points, it's shown me how binary the news cycles can be. In reality, there's little bits of truth to most stuff, which is why I don't fully embrace these kinds of claims but I also most certainly don't fully deny them either. Instead, I let bureaucracy do what it does best: process stuff; which is why I think it's a valid question to ask to a massive bureaucracy.
> Is the practice shady? Perhaps.
> If you want to rail against this, be my guest as you and I would be in furious agreement, however....
> Is Yellen doing anything wrong by working on the talk circuit? No.
Personally, I don't care if you want to go make money talking about your time in government. Usually it's when you try to represent yourself as not-a-lobbyist in the private sector or return to politics after making lots of friends in the private sector off the back of your previous political gig. I can't tell you why, it just feels like there's a large amount of room for bad things to happen. Sounds like we'd probably agree.
That's fine, but it has nothing to do with what the article says, nor that this submission is blatant politicising - an act which HN seems to pretend it is above.
People keep downvoting me for reiterating the point - this is not a conflict of interest (as demonstrated by years of precedence), nor did the Press Secretary ignore the question, nor is this an unusual situation for past and current public servants to be in.
Show me an actual conflict of interest and I'll grab my pitchfork. Show me a blatant political "wahtaboutsim" with no real substance and I'll thrust my pitchfork in it's direction as well, internet points be damned!
I don't know what would lead you to believe this. HN can be a very political place. Some are conservative, some are liberal, some are libertarian, some are just totally other. That's just for the US side too, wait until the people overseas wake up. You get a very wide range of understandings and perspectives here that you should absolutely learn to appreciate without maximalist conclusions. As I said about news earlier, there's a little bit of truth to everything you just have to bother to look.
> People keep downvoting me for reiterating the point
Generally, it's bad etiquette (and against the guidelines) to talk about downvoting behavior. It's also generally bad to arrive at maximalist conclusions, but you also did that. Feel free to give these a read: https://news.ycombinator.com/newsguidelines.html
So $800k speaking fees are just "speaking fees".
In contrast, Seth Godin and Malcolm Gladwell command as much as $250k for a single speech. Oprah gets a rumored 7 figures.
If Seth Godin can legitimately command $250k for a single speech, I think Janet Yellen can easily command $800k for two speeches and a webinar series (which could actually be any number of episodes).