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View Diary: WATCH: Paul Krugman on Jack Lew (133 comments)

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  •  Don't you know, the treasury secretary (21+ / 0-)

    has to please "the markets". This toxic notion of giving "the markets" this up or down vote on personnel and policy because of some unearned wisdom is such a bs ruse. Its intentionally done this way to automatically make liberal reformers of Wall St unpalatable to run the institution where that reform needs to be done, the Treasury.

    I'm sympathetic to Obama on some of his compromises, but on these Wall St issues, I just don't get it. I used to think it was primarily the financial power Wall St has but if you review Opensecrets, you realize that Wall St broke for Romney 5-1 and the top 10 contributors for Obama were basically a bunch of universities and law firms. These guys, by in large, openly campaigned against him this year, led by Goldman Sachs and JP Morgan.

    So you realize its something deeper and harder to solve. Money is part of it yes, but its also this group think that Krugman talks about where the only people you meet are people of that ilk and they create norms of acceptability for certain policies and appointments.

    •  Lew nomination "not sitting well with WSJ... (35+ / 0-)

      editorial board:  

      "...The Journal, in an editorial headlined "Team of Liberal Loyalists," criticizes Obama's selection of a "loyalist" for Treasury who will "advance and implement his agenda," rather than a figure who will "offer independent advice..."

      Apparently that same WSJ board forgets that in 2004, the WSJ:

      "...praised Bush for dumping Paul O'Neill (because he "didn't agree with the President's agenda") and replacing him with John Snow, who "has been loyal and has served honorably..."

      Why Jack Lew Scares Republicans

      ...Beneath his nerdy exterior, Lew is a passionate progressive on the issue of wealth disparity and programs for the poor....

      This evident passion for what he sees as the moral dimensions in fiscal and economic policy combined with his expertise in the numbers makes him a formidable opponent as Washington heads into more tough negotiations over the budget. And it explains why Republicans are getting ready for an ugly confirmation fight...

      Here's Obama's Message To GOP by Appointing Lew as Treasury Sect.
      I'm not backing down from this budget fight....

      ...Several Republicans said Tuesday they don't view Lew as a man interested in hearing GOP concerns. One aide called him "tone deaf" in understanding the compromises that Republicans could accept during high-stakes talks.

      ..."No matter what you're proposing or no matter what compromise you're trying to forge, he comes at it from a position of, 'Whatever you want, I have to be against,'" the GOP aide said...

      Whatever we may think of Lew, it seems apparent that the Republicans/ Wall St. are very nervous about the POTUS's potential nomination of Lew.
      •  Not sitting well with Bernie Sanders either (6+ / 0-)

        “The probability that we may fail in the struggle ought not to deter us from the support of a cause we believe to be just.” – Abraham Lincoln

        by Sagebrush Bob on Thu Jan 10, 2013 at 03:14:21 PM PST

        [ Parent ]

      •  The republicans would (5+ / 0-)

        Oppose anybody that Obama nominated. So you can't really tell anything from that.

      •  here's Bill Black on that 'passionate conservative (1+ / 0-)
        Recommended by:
        orson

        that has been so worried about wealth disparity, but I guess he thinks it isn't high enuf.
        http://www.democracynow.org/...

        AMY GOODMAN: That’s Jack Lew responding to Bernie Sanders, who, when President Obama announced his nomination of treasury secretary—to treasury secretary of Jack Lew, Senator Sanders said, "We don’t need a treasury secretary who thinks that Wall Street deregulation was not responsible for the financial crisis." Professor Black?

        WILLIAM BLACK: Well, I mean, we can agree that he lacks expertise in the area, but he was supposed to have expertise. This was supposed to be his area of expertise, both in his role as OMB head under Clinton, and then, of course, as being in the industry and actually implementing the fruits of this deregulation.

        So—and he has the history, in one sense, correct. He says the problem arose before deregulation. That’s true that derivatives were already a problem before deregulation. And so, Brooksley Born proposes to deal with the problem by having a regulation to deal with credit default swaps. And then the Clinton administration, in league with Greenspan, in league with Phil Gramm, and with one of the important architects of all of this being Jack Lew, squashes Brooksley Born to destroy the proposed regulation and to pass something, the Commodity Futures Modernization Act—talk about a dishonest phrase—that not only said, "You, Brooksley Born, cannot go forward with this particular regulation," the statute actually said, "We hereby withdraw all regulatory powers to protect the nation, period. From the federal government, from the state and local governments, we exempt you from the gambling laws. We exempt you from the boiler room laws to prevent fraudulent operations." It’s one of the most extraordinary abusive things in the world, heavily involved with AIG’s ability to produce not just the disaster at AIG, but the disaster of credit—of the CDOs that blew up a larger portion of the world. And those CDOs would not have been possible without these credit default swaps.
        So, this is a guy who designed the disaster, participated in the disaster on Wall Street, was made rich by it. We haven’t talked about the fact that he got a huge bonus for destroying—helping to destroy the world at Citicorp. And he got it through the bailout of Citicorp by the U.S. government. So he produces disaster, profits from the disaster, we pay him bonuses for causing the disaster, and then we have the absurdity of the president of the United States saying that this is a man with a track record of unmitigated success. It is exactly the opposite, in terms of finance. He is a worthy successor to Tim Geithner, in that he has screwed up everything substantively he has ever touched.

        without the ants the rainforest dies

        by aliasalias on Fri Jan 11, 2013 at 09:36:46 AM PST

        [ Parent ]

        •  Bill Black elaborates (1+ / 0-)
          Recommended by:
          aliasalias

          in written form in today's piece on HuffPo:

          Jacob Lew: Another Brick in the Wall Street on the Potomac

          Some snips:

          Obama is clearly comfortable bringing another ex-Wall Streeter into [his] administration

          Lew served as OMB chief from May 1998 to January 2001 during the Clinton administration, when Clinton signed into law the Financial Services Modernization Act of 1999 and the Commodity Futures Modernization Act of 2000 -- two pieces of legislation at the heart of the deregulation of Wall Street. …

          The obvious aspects of this pattern include: (1) Obama prefers to have Wall Street guys run finance (despite coming to power because Wall Street blew up the world), (2) the revolving door under Obama that connects Wall Street and the White House has been super-charged, and (3) even very short stints in Wall Street have made Obama's finance advisers wealthy. …

          The unobvious aspects of the pattern compound these problems. First, Obama likes to surround himself with failures. … Geithner … Daley

          Lew, President Clinton, Bob Rubin, Larry Summers, and Alan Greenspan pushed the key statutory acts of deregulation that helped create the crimionogenic environment that drove the crisis. But they also drove the destruction of regulation and supervision at the banking regulatory agencies. …

          Geithner failed the same moral test. He also refused to pay his taxes that he knew he owed because he believed he could get away with it. The irony is that the Internal Revenue Service (IRS) reports to Geithner. …

          The third, less obvious problem is that the Treasury Department and its bureaus (which include bank regulators) is responsible for adopting an enormous number of critical regulations intended to reduce the risk of future crises. …

          The fourth non-obvious problem is that Obama chooses as his principal financial advisors people who have not been trained to have financial expertise. Geithner studied international politics. Emmanuel studied speech. Lew, Obama, and Daley studied law. Lew, Daley, Emanuel, and Geithner all worked in finance, but they did so because of politics and who they knew rather than what they knew. Competence was never the key. …

          The fifth less obvious problem is that each of these key advisors is so slavish in his dedication to our systemically dangerous institutions (SDIs) (the so-called "too big to fail" banks) that they have embraced crony capitalism and the ability of the SDIs' CEOs to lead "control frauds" with impunity from the criminal laws. …

          Geithner has disgraced the nation and the Department of the Treasury by pushing to prevent criminal cases against the SDIs and their senior officers. There is nothing in Lew's record that suggests he will restore the nation's honor. …

          Lew's embrace of long-falsified austerity dogmas is intense. …

          In late December 2012, Obama urged Senate Majority Leader Reid to adopt a list of concessions that included substantial cuts to the safety net. Reid threw the proposed instrument of surrender and betrayal into his office fireplace. …

          Progressives need to understand that the Grand Betrayal is not inevitable. What the administration and Boehner are attempting to inflict on the nation is indefensibly self-destructive. Medicine realized over a century ago that bleeding patients constituted medical malpractice. We have known for at least 75 years that austerity in response to a recession or the Great Depression constitutes economic malpractice. The ironic aspect of the Wall Street wing of the Democratic Party is that they are terrible at finance. Wall Street on the Potomac combines the worst aspects of finance and politics. It is crony capitalism --- anti-American style.

          [my emphasis of some highlights]

          United We Understand

          by dorkenergy on Fri Jan 11, 2013 at 01:05:00 PM PST

          [ Parent ]

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