Issue of the week: Obama’s choice for Treasury

last updated 8 January 2015

Jack Lew’s nomination as the new Treasury secretary does “not bode well for either the business community or, ironically, the White House,” said Steve Liesman in CNBC.com. The White House chief of staff has previously run the Office of Management and Budget twice, under both Clinton and Obama. But that’s not the kind of experience to convince business executives that he has “an allegiance to something other than the White House and its political ambitions.” Obama has a real problem with Wall Street, and the current Treasury secretary, Timothy Geithner, has the expertise “to bridge the gap.” Lew does not. “Obama may have missed an opportunity to add a voice with market credibility to his team.”

Lew may be no Geithner, said Robert Scheer in The Nation. But for anyone who wants to see curbs on Wall Street’s unfettered greed, that’s “scant cause for cheer.” When he worked at Citigroup, from 2006 to 2008, Lew ended up overseeing an alternative investment unit that contributed to the bank’s failure and set the stage for its $45 billion taxpayer bailout. In 2008 alone, he was “raking in more than $2 million in salary and bonuses.” And at his last confirmation hearing, in 2010, Lew discounted the importance of regulation, revealing a “myopic view of the origins of the economic meltdown.” That might matter more now than it once did, said Matthew Zeitlin in TheDailyBeast.com. The Dodd-Frank legislation makes the Treasury secretary one of the nation’s most important financial regulators. “And Lew doesn’t have much regulatory experience.”

My concern isn’t that Lew will be too much or not enough of a friend to Wall Street, said Heidi Moore in Guardian.co.uk. “He’s much more likely to entirely forget about Wall Street.” As a self-proclaimed numbers man, his strengths “are in the molasses-speed world of government deficits and budget planning, where costs are calculated in increments of a year or a decade.” Indeed, by nominating Lew, President Obama has clearly signaled that the financial markets “are not a priority.” That’s not the only signal he’s sending, said Joshua Green in Bloomberg Businessweek. “Putting Lew at Treasury suggests that Obama intends to drive a hard bargain with Republicans on tax, spending, and entitlement issues.” Lew will be there not to deal with Wall Street, but to be the “point man in ongoing budget and entitlement-reform negotiations.” However Wall Street feels about Lew’s nomination, the Republicans hate it. And Obama clearly “isn’t particularly concerned about how they feel about his choice.”