Bailout Architect Runs For California Governor; World Laughs

I'm just wondering how you feel about an AIG giving $503 million worth of bonuses on the one hand, and accepting $154 billion from hard-working taxpayers. You know, because I'm trying to make sure you get it. What really bothers me is all these other people who are lined up. They say, well, is Kashkari a chump?

After this "chump" episode, and others, Kashkari apparently became despondent. He and his wife reportedly were particularly upset by a snickering item in Gawker. The item read, "Financial Crisis Taking a Toll on Our Favorite Asshole Banker," and made the neatly cruel observation that that Kashkari, who was a fit/lean/bald banker of Paulsonian persuasion when he arrived in Washington, had begun "putting on classic stress-related weight under his chin."

The item featured before and after photos. The "after" photo was shot from just below chin level. It was brutal.

Now, a lot of people have been ripped in Gawker. I think everyone with a Q rating above 0.00003 has been ripped in Gawker. I personally remember having to Google-image Peter Beinart because Gawker described me as looking like the computer-generated love child of Beinart and Ashton Kutcher. It's an Internet-age rite of passage and they give great service I mean, Gawker's insults are almost always really good. Probably most people who get ripped on the site flip out at first, and then laugh about it later.

Not Kashkari. He was so mortified by items like the Gawker bit that he literally disappeared into the woods like Ted Kaczynski and committed himself to a vengefully ascetic fitness regimen, apparently determined to return someday to society and have the last word.

This is not a joke. The Washington Post actually tracked Kashkari down in the woods after the bailouts. They photographed the tiny shed he'd built for himself in Nevada County, California. They were shown the incredible list-of-things-to-do he'd written on his way out of Washington. I have to keep repeating this, but this isn't a joke:

1. buy shed
2. chop wood
3. lose twenty pounds
4. help with Hank's book

The Post was then invited to watch as Kashkari lived out his hilarious homage to Rocky IV, getting in shape by his lonesome in the woods, fiercely splitting log after log with an ax, recalling a past slight with each blow:

Kashkari raises his ax.
"It felt like I got jumped."
"Like three guys beat the crap out of me."
Whack, whack.
The massive block of sugar pine breaks, the crack bouncing off the mountain.
Kashkari is recalling his testimony before Congress, while splitting logs to feed the stove for the winter. He is down to his last two chain-sawed trees.
"Members of Congress will tell you they agree with you, and then in public they blast you. I understand their anger, but the playing at politics when so much was at stake -- "
Whack. The ax blade flies off its wooden handle.

After enough of this, there was no more stress-related neck-jelly, no sir!

Kashkari, in shape again, soon-re-entered the finance world, taking a high-profile job with the bond fund PIMCO, run by notorious Wall Street insider Bill Gross.

The new choice of employer was significant because as numerous critics have subsequently pointed out, PIMCO was one of the major beneficiaries of the government's rescue of Wall Street. In December 2008, the Fed hired PIMCO to be one of four investment firms put in charge of managing a Fed program to buy up the toxic mortgage-backed securities that were threatening to tank the economy at the time.

Gross, at the time, warned that the government would have to "open up the balance sheet of the U.S. Treasury" (i.e. the state would need to cough up taxpayer money) in order to prevent "continuing asset and debt liquidation" (to prevent Wall Street jerks from being blown up by their own bad bets). Conveniently, Bill Gross and PIMCO happened to be sitting on $500 million of mortgage-backed holdings at the time. Which meant, as Babson College professor Peter Cohan put it:

Bill Gross, who manages $830 billion, has convinced the U.S. Treasury to use your taxpayer dollars to bail him out of his bad investments.

So Neel Kashkari was the administrator of the biggest corporate welfare program in history, took shit for it ("Beating on the Hill," he would pencil for certain times in his calendar), went into the wilderness to get his mind and body right after the experience, then re-emerged to take a high-paying job with a company that was a significant beneficiary of government largesse.

While at PIMCO, Kashkari dipped a little toe in the lake of politics once again by penning an editorial for the Post ("No more me-first mentality on entitlements," July, 2010) denouncing government aid programs. He argued and again, this is no more a joke than the Rocky-IV-cabin-in-the-woods thing was that even though we have an economy successfully founded on self-interest, accepting government benefits, by which one assumes he means things like Medicare, is the wrong kind of selfish:

Our belief in free markets is founded on the idea that each individual acting in his or her self-interest will lead to a superior outcome for the whole. The financial crisis has reminded us that free markets are not perfect -- but they do allocate capital better than any other system we know. A "me first" mentality usually makes markets more efficient.

Kashkari's solution? People who accept government benefits should take the long view and just say no:

Cutting entitlement spending requires us to think beyond what is in our own immediate self-interest. But it also runs against our sense of fairness: We have, after all, paid for entitlements for earlier generations. Is it now fair to cut my benefits? No, it isn't. But if we don't focus on our collective good, all of us will suffer.

Again, this came from a guy who handed out hundreds of billions of dollars of welfare to Wall Street companies, effectively subsidizing the massive compensation packages of Wall Street executives. This same person then went to work for a company that got a fat government contract to help other Wall Street investors unload their bonehead investments on the taxpayer.

Then, after all that rescue money disappeared, Kashkari made the interesting observation that there was not enough left over to pay benefits for other people. So, he effectively said to Americans on benefits, stop being so selfish. Tighten your belts. All of us will suffer otherwise.

This is the person who has now decided to run for Governor of California. It seems Jerry Brown has become his own personal Dolph Lundgren. A friend of mine sent me the news by email and suggested I say nothing at all about his decision, other than to post the headline above the following clip: