Rise of the Apparatchiks

by Dave Schuler on January 28, 2013

There’s a term I’ve used around here from time to time which I suddenly realized I’ve never defined for you. “Apparatchiks”, a Soviet-era Russian term, means “party functionaries”, generally with lifetime tenure. Whatever the nominal job of an apparatchik, the apparatchik’s real job is to advance the policies and interests of the party, regardless of their pragmatic value or benefit to the people or country.

In a recent editorial the editors of the Wall Street Journal characterize Jack Lew, who will undoubtedly be confirmed as the next Secretary of the Treasury, like this:

There was a time when you had to be successful on Wall Street to become secretary of the Treasury. Now along comes presidential nominee Jack Lew, whose only business credential is a stint at the most troubled too-big-to-fail bank.

During the darkest days of the financial crisis Mr. Lew served as the chief operating officer of Citigroup’s Alternative Investments unit (CAI). When Mr. Lew took
this job in January 2008, the unit was already infamous for overseeing “structured investment vehicles” that hid mortgage risks outside Citi’s balance sheet. It also housed internal hedge funds that were in the process of imploding.

CAI no longer exists. At the end of Mr. Lew’s first quarter on the job, the unit reported a $358 million loss. Things got much worse after that but Citi stopped breaking out CAI results in its earnings releases. The unit was eventually shuttered and many of its assets were sold.

As you can see from the chart above, Citibank’s stock collapsed during Mr. Lew’s tenure there. I don’t think he’s to blame but I don’t think there’s much evidence that he actually helped much, either. In fairness to him, characterizing Mr. Lew, a lawyer, as a banker or a financier is, shall we say, an exaggeration. A bit like characterizing me as a dog handler.

Mr. Lew, like Steve Rattner (the Obama Administration’s “auto czar”) or Rahm Emanuel (now mayor of Chicago), had jobs with banks and investment companies connected to the Democratic Party without notable credentials for the jobs. They are Democratic Party apparatchiks. They were granted what were thought to be sinecures to rake in the big bucks before going back to their real jobs: advancing the policies and interests of the party. The banks received value for their money in the form of friends in high places. Can anyone reasonably doubt that Citibank exists only because of its friends? Keep this in mind when you hear DC-types talk about meritocracy. That’s what they mean.

In my view the principle problem with our politics is not the party rank and file or even the policies that our political parties nominally support. It’s the apparatchiks. Typically, they are more rabidly and mindlessly partisan than their corresponding party members who worked their way up the ladder of electoral politics. Why not? Their fortunes depend on it.

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{ 13 comments… read them below or add one }

Icepick January 28, 2013 at 12:16 pm

And while the apparatchiks get rich, most of us get the shaft. The article contains that magic 10% number Schuler’s always bandying about.

What’s funny to me is seeing studies like this, Nearly half are overqualified for their jobs and knowing that someone like Lew is UNDER-QUALIFIED for his job, yet got filthy stinkin’ rich in the process of fucking over everyone else. Anyone want to guess where Geithner ends up next? After all the inside info he fed the Wall Street types when he was President of the NY Fed, he ought to start raking in huge bucks now.

And these rapacious assholes, and their lords and masters like Harry Reid and Barack Obama, claim they’re on the side of the little guy.

Dave Schuler January 28, 2013 at 12:37 pm

Geithner is in a class by himself. Despite his being the single individual technically and definitionally most responsible for the fiscal crisis, what does he get? Promoted!

Icepick January 28, 2013 at 1:00 pm

Well, he’ll probably get rich next, and the rumor is he is going to be appointed the next Chairman of the Federal Reserve Board. But that’s the way the country works now. failure = SUCCESS! At least as long as one is amongst the Party Faithful. The rest live on their scraps.

Steve Verdon January 28, 2013 at 1:44 pm

In my view the principle problem with our politics is not the party rank and file or even the policies that our political parties nominally support. It’s the apparatchiks.

How can you separate the two? It is the apparatchiks who push the policies, not the rank and file members. If Obama and his apparatchiks were to come out in favor of Cash for Clunker 2.0 many of the party rank and file would call it a brilliant idea.

So idea that it isn’t the policies is just not sensible to me.

Steve Verdon January 28, 2013 at 1:46 pm

As an example, I give you Michael Reynolds who is a true lick spittle rank and file member, IMO. His paeans about Obama were almost laughable….why Obama…he saved GM!!!!!!!!1!!!!1!!!11!!!Eleven

jan January 28, 2013 at 4:25 pm

“But that’s the way the country works now. failure = SUCCESS! “

It certainly does seem like definitions, values, goals have all undegone tremendous alterations in how they are now viewed.

TastyBits January 28, 2013 at 6:27 pm

Timothy Geithner is a dirtbag. While the President is railing against Wall Street bonuses, his Secretary of the Treasury is doing everything to ensure they get those bonuses.

He may not get the job he thinks he deserves. From what I can tell, he was working for the Financial Industry on his own. He was a toady, and he will always be a toady.

Andy January 28, 2013 at 6:49 pm

I strongly support the “rehabilitation” of the great word apparatchiks to describe this country’s elites.

Icepick January 28, 2013 at 7:32 pm

There’s a term I’ve used around here from time to time which I suddenly realized I’ve never defined for you.

You know, I would guess that at least 90% of the people that read this site would just simply know what the word means without having to have it defined.

Icepick January 28, 2013 at 7:33 pm

I strongly support the “rehabilitation” of the great word apparatchiks to describe this country’s elites.

I strongly support sending the elites off to various gulags for “re-education”.

Dave Schuler January 28, 2013 at 7:36 pm

“Apparatchik” is used in a number of different senses, especially here in the United States. For example, since the 1950s it’s been used to mean a spy.

I used the term in its original Russian sense of a member of the political apparatus.

steve January 29, 2013 at 2:49 am

“There was a time when you had to be successful on Wall Street to become secretary of the Treasury. Now along comes presidential nominee Jack Lew, whose only business credential is a stint at the most troubled too-big-to-fail bank.”

This means you shouldnt hire anyone who worked at a Wall Street firm in the 2000s. Suppose you hired a guy who just happened to work there from 1990-2006? Would he be considered a success? His numbers would look great, but you would be hiring someone whose idea of success is getting out before the pyramid collapses.

I think your views on apparatchiks works better for the Democratic party. I also agree with Verdon in that I dont see how you separate the policy. I am not so sure that policy doesnt come first, and those willing/able to support policy get the jobs.

For the GOP, I think ideology has become supreme and at this point, I am not 100% sure who is really driving it. I really dont get the feeling that it is coming from many of their politicians. My guess is that it is being driven by some combination of their think tanks and their media. I find it difficult to believe that with modern polling that professional politicians could be as tone deaf as the current crop of GOP politicians. The exception might be the foreign policy crowd. In that area the most toxic possible types manage to rotate into positions of real power. Think Bolton or Wolfowitz.

Steve

larrydunbar January 29, 2013 at 8:21 pm

“I used the term in its original Russian sense of a member of the political apparatus.”

[Neo], do you really think that oligarchy has anything to do with “party” (the air you breath), in this environment? Hmmm….

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