Hard to See a Sellout in Geithner’s Job Choice

Within 24 hours of Timothy F. Geithner’s announcement on Saturday that he would join Warburg Pincus, the private equity firm, a parade of naysayers emerged, almost like clockwork, to criticize the former Treasury secretary’s move as a prime example of the evil of the government’s revolving door.

“It’s hard to believe someone like Geithner, with no investment or private sector experience, would be worth the millions he will surely earn each year if he didn’t also turn heads at the highest levels of government,” Noam Scheiber of The New Republic wrote.

Dennis Kelleher, president of Better Markets, a Wall Street watchdog organization, sent an email statement: “Geithner’s spin through the revolving door to cash in on his ‘public service’ will enrich himself, further erode public confidence in government and give the finance industry more access and influence at the highest levels of government worldwide.”

While there’s nothing good about the “revolving door” between Washington and Wall Street, there’s something quite odd about the developing narrative about Mr. Geithner’s move, because it is hard to argue Mr. Geithner ever spun through the revolving door even once.

There’s no question that had Mr. Geithner become the president of a university â€" as some had speculated was a possibility a year ago when the top job at Dartmouth, his alma mater, was available â€" or of a nonprofit, like the Red Cross, the break from the government to the private sector would have undoubtedly been cleaner.

But the idea that he’s selling out to the world he regulated doesn’t quite fit either.

Maybe this is splitting hairs, but Warburg Pincus, a relatively obscure yet well-respected private equity firm has little to do with the big institutions Mr. Geithner once oversaw.

Had Mr. Geithner gone to a large bank like Goldman Sachs, there would rightly be a steady stream of negative headlines, as there would be had he gone to BlackRock, one of the largest buyers of United States Treasuries. (Laurence D. Fink, BlackRock’s founder and chief executive, is said to have discussed a possible position with Mr. Geithner.)

His critics seem to forget, or only casually acknowledge, that he hasn’t worked in the private sector for most of his adult life. He was an Army brat as a child and he has worked in government or at the Federal Reserve for 25 years; the last time he worked in the private sector was in the 1980s, for Henry Kissinger’s consulting firm.

Mr. Geithner had a chance to go to Wall Street before. Sanford I. Weill, the chairman of Citigroup at the time, approached Mr. Geithner about a job. He turned it down, in part because of the clear conflict it posed.

So it is tough for critics to say that Mr. Geithner has been a member of the Acela crowd â€" riding back and forth from big government jobs to private sector roles â€" despite the many myths that have developed over the years that he once worked at Goldman. One such myth was so strong that Amy Rule, the wife of Rahm Emanuel, the mayor of Chicago and former White House chief of staff, famously said to Mr. Geithner at a dinner party that he “must be looking forward to going back to that nice spot you have waiting for you at Goldman,” according to John Heilemann, a writer for New York magazine.

Mr. Geithner, up until now, has hardly been in the big-money leagues. He was paid $191,300 as the Treasury secretary after taking a pay cut from his role as the president of the Federal Reserve Bank of New York, which paid him $411,200. While that’s nothing to sneeze at, he clearly was in a position for many years to make multiples of what he earned in government.

Ben White of Politico on Monday joked sarcastically in his email newsletter about the criticism of Mr. Geithner’s new role: “Maybe he should have joined the priesthood.”

Mr. White quoted a friend of Mr. Geithner defending him and saying he would make a great investor: “For more than three years, Geithner oversaw the largest portfolio in the world with more than $400 billion invested in banks, A.I.G., the car companies and illiquid assets. If Geithner and his team had been paid like private sector managers,” this person added, “safe to say none of them would have to work again.”

That may be true, but it is a stretch to suggest that Mr. Geithner’s roles at Treasury or the Fed make him a good investor. When the government put together the bailout program in 2008, no one did so with any expectation â€" or insight â€" that the stakes would turn out to be profitable. That’s not to say Mr. Geithner isn’t a smart guy or won’t be valuable to Warburg.

Is he trading on his relationships and his role in government? Yes and no. In his role as a fund-raiser for the firm, he will, of course, lean on relationships he has built up over many years. His reputation should help him get meetings and close deals. But he won’t be lobbying his former colleagues in Washington on bank regulations.

One question that invariably will come up is his position on taxing carried interest, the share of private equity firms’ profits from deals. He has long been an advocate in the Obama administration of raising the current rate of 15 percent. (I have taken the same position in many columns.) If he changes course now that he is in industry, he deserves a drubbing. One of his mentors, Robert Rubin, has publicly called for a higher tax rate as well.

The big question is why Warburg, which has made its reputation by staying under the radar, would want to hire someone like Mr. Geithner, who will without a doubt raise the firm’s public profile in a way it has never been raised before. Invariably, every time Warburg makes an acquisition, the deal will take on more significance. Every time the name Warburg appears in the paper, it will be followed by a comma and the phrase, “the firm that Timothy Geithner recently joined as president.”

I suspect that the real reason Mr. Geithner’s move infuriated some people is that they were disappointed he didn’t do something they consider more high-minded. “For all the criticism directed his way, Geithner was the exceedingly rare example of the idea that you can be a talented, high-level regulator and public servant and exist entirely apart from Wall Street financial interests. That won’t be true any longer,” Josh Green of Bloomberg Businessweek lamented.

While his hands may not appear squeaky clean, it hardly seems fair to call them dirty.

Andrew Ross Sorkin is the editor at large of DealBook. Twitter: @andrewrsorkin