Timothy Geithner was often criticized for being intimately involved in the failed Wall Street bailout. Obama’s choice to replace him as Treasury Secretary, Jacob Lew, may be even worse.
While Geithner was working out the plan to rescue the lifestyles of the rich and famous, Jacob Lew was one of the rich and famous being rescued.
Lew is addicted to government money, though I’m sure we can count on him to promote cuts to the social system for the rest of us. He’s spent his life working in government, much like social welfare critic Erskine Bowles. Even more than receiving a direct government paycheck for years (and government healthcare), Jacob Lew was a recipient of big money on Wall Street following the 2008 collapse.
Jacob Lew worked at Citi during some of the worst years (2006-2009) before the collapse. Between working those particular years, and then receiving a nearly $1 million bonus right after the government rescue of Citi, this somehow translates into “top Wall Street experience” and the respect of both Wall Street and the Obama administration. Strange, isn’t it?
Bloomberg has already published a piece that may have been written by Lew’s mother (or perhaps his wife) that discusses his involvement with every budget deal since 1983. So assuming you like the direction the US is going, with more inequality, increasingly expensive healthcare, and cutbacks to the social state, you’re gonna love Jacob Lew.
However, if you’re one of those nitpicky people who think the US has been on the wrong track since the Reagan years, you might have reason to be uncomfortable.
The big question now is why the President believes that a Wall Street guy from the worst years on Wall Street is the right person to run the US Treasury. Does Obama think that Lew was part of fixing the system when he walked away with big money after the bailout? The much larger problem is that the President doesn’t seem to really care what any of us think about the Wall Street abuse or the general direction of inequality in America. And Lew’s nomination is Exhibit A (well, Exhibit B — Exhibit A was Geithner).
By choosing Jacob Lew, President Obama is choosing to elevate someone who does not believe banking deregulation was the problem behind the 2008 Wall Street collapse. While this opinion may make Lew popular with the Robert Rubin crowd, back on planet earth, it puts him in the minority of sane people.
Lew, a former OMB chief for President Bill Clinton, told the panel that “the problems in the financial industry preceded deregulation,” and after discussing those issues, added that he didn’t “personally know the extent to which deregulation drove it, but I don’t believe that deregulation was the proximate cause.”
Experts and policymakers, including U.S. Senators, commissioners at the Securities and Exchange Commission, top leaders in Congress, former financial regulators and even Obama himself have pointed to the deregulatory zeal of the Clinton and George W. Bush administrations as a major cause of the worst financial crisis since the Great Depression. Lew, however, doesn’t appear to agree, putting him at odds with an administration and a party that tout their efforts at re-regulating Wall Street in pitches to voters and cast blame for the crisis in part on the deregulatory policies pursued by Bush and his fellow Republicans in Congress.
Maybe the President has also changed his own position on deregulation, and he also thinks deregulation had nothing to do with the worst economic meltdown since the Great Depression. Perhaps the President is fine with the ongoing and massive transfer of wealth from the middle class to the super rich on Wall Street. If he’s not, he has a strange way of showing it.
The GOP crazies like to talk about President Obama and his “class warfare,” but they wrongly believed that he was the one positioning the poor against the rich. It’s not. He keeps siding with the rich, and Jacob Lew is sadly more proof of that fact.