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

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  •  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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