On the Friday before Christmas, President Obama announced that he was appointing Mohamed A. El-Erian, the CEO of Pacific Investment Management Company, as the chairman of his Global Development Council.

The announcement didn’t get much attention, but it should. It exemplifies what’s wrong with Mr. Obama’s approach to economic policy, which amounts to: insult rich people as “fat cats,” raise their taxes, and then choose a favored few of them for special access.

If you’re not familiar with Mr. El-Erian, you must not be watching CNBC or attending the World Economic Forum at Davos. The son of an Egyptian ambassador to France and a French mother, Mr. El-Erian worked for 15 years, from 1983 to 1997, on the staff of the International Monetary Fund. In 1999 he joined Pimco, a California-based manager of bond funds.

Mr. El-Erian’s reputation as a money manager is not without its blemishes. He did a brief tour — parts of 2006 and 2007— as the manager of Harvard University’s endowment, leaving it ill-prepared for the economic downturn that ensued shortly thereafter.

In October 2009, with Pimco colleague Bill Gross, Mr. El-Erian forecast a “new normal” of asset returns of half what they were in previous decades. That turned out, at least so far, to have been spectacularly wrong, at least when it comes to U.S. stocks, which were up about 17% in 2010 and 16% in 2012.

A New York Times article published in July 2012 reported that Mr. El-Erian had been paid $100 million by Pimco in 2011, a year in which Pimco’s flagship Total Return fund was in the bottom 10% of bond funds. Pimco, a unit of the German company Allianz, disputes the pay figures, though it won’t say how much Mr. El-Erian actually was paid, and the New York Times has not issued a correction.

The former Federal Reserve chairman, Alan Greenspan; George W. Bush’s chief of staff Joshua Bolten; and a Bush administration Treasury official, Neel Kashkari, all have consulted to or worked for Pimco in recent years. Meanwhile, the firm, which manages more than $1 trillion for investors who include state governments and foreign sovereign funds, has reportedly been trying to avoid being designated as a “systemically important financial institution” under the Dodd-Frank law governing financial regulation.

Now, maybe Pimco’s Mr. El-Erian has agreed to volunteer as chairman of President Obama’s Global Development Council entirely out of an altruistic concern for the people of the developing world. And maybe the CEO of GE, Jeffrey Immelt, volunteered to head Mr. Obama’s Council on Jobs and Competitiveness entirely out of patriotic concern for jobless Americans.

But you don’t have to be either a skeptic or a cynic to see the presidential appointment as just the latest piece of a business strategy that relies on closeness to the government as an edge. Fortune magazine described it well in a 2009 article: “Pimco’s success stems from shrewd bets on government intervention.”

The Fortune article went on, “For example, in 2008 Gross shifted from Treasuries and corporate bonds into mortgage debt backed by Fannie and Freddie because he believed that the government would ultimately keep those government-sponsored enterprises (GSEs) afloat. By May, Gross had moved 60% of Total Return into GSE-backed bonds, up from 20% the year before. ‘In a way, we’ve partnered with the government,’ says El-Erian. ‘We looked for assets that we felt the government would eventually have to own or support.’”

Mr. El-Erian’s new job as chairman of the Global Development Council — which he will do as a volunteer while remaining CEO of Pimco — puts him at the head of a group that the White House says “will inform and provide advice to the President and other senior U.S. officials on U.S. global development policies and practices, support new and existing public-private partnerships, and increase awareness and action in support of development by soliciting public input on current and emerging issues in the field of global development.”

Or, to put it another way, it takes Pimco’s partnership with the government to a whole new level.

Mr. Stoll is editor of FutureOfCapitalism.com.