Andrew Ross Sorkin used his column today to complain about the AFL-CIO and others making an issue over Wall Street banks paying unearned deferred compensation to employees who take positions in government. He argues that the people leaving Wall Street for top level government positions are victims of a "populist shakedown."

Sorkins's complaint seems more than a bit bizarre given recent economic history. In the housing bubble years the Wall Street folks made themselves incredibly wealthy packaging and selling bad mortgage backed securities. When this practice threatened to put them all into bankruptcy, the Treasury and Fed stepped in with a bottomless pile of below market interest rate loans and loan guarantees to keep them afloat.

This was explicit policy as former Treasury Secretary Timothy Geithner makes very clear in his autobiography. He commented repeatedly that there would be "no more Lehmans," and he ridiculed the "old testament" types who thought that somehow the banks should be made to pay for their incompetence and left to the mercy of the market.

The result is that the Wall Street banks are bigger and more powerful than ever. By contrast, more than 10 million homeowners are still underwater, the cohort of middle income baby boomers are hitting retirement with virtually nothing but their Social Security and Medicare to support them, and most of the workforce is likely to go a decade without seeing wage growth. And Geithner is now making a fortune at a private equity company and gives every indication in his book of thinking that he had done a great job.

This state of affairs would probably not exist if the Treasury had been full of people without Wall Street connections. If we had more academics, union officials, and people with business backgrounds other than finance, it is likely that all the solutions to the economic crisis created by Wall Street would not have involved saving Wall Street as a first priority. (And, we would not have that silly second Great Depression myth as the guiding story for public policy. Getting out of the Great Depression only required spending money -- even Wall Street folks could figure that one out.) 

Anyhow, the AFL-CIO is right to raise questions about policies that further Wall Street's dominance of economic and financial policy. It's striking that Sorkin can't even see a problem.