For progressives and the millions that voted for President Obama one early decision will tell us whether or not the President is really on our side ... or whether he is going to sell out over issues like Social Security reform.
Four years ago Obama picked Larry Summers and Tim Geithner for his top economic positions. That was the day I knew that for all Obama's good intentions he had sold his soul to the bankers. And so it turned out. Geithner and Summers have banker DNA. They were able to surround the President and present only their case for our the economy (and Wall Street) works.
The central theme of the bankers was that nothing illegal was done leading up to the financial crisis. It was just all bad decisions by well meaning people. Despite reams of information to the contrary almost no prosecutions were undertaken of those who caused much of the crisis (YES ... there was clear fraud in many cases by major financial institutions). Summers and Geithner sold the President on the need for stability and that any prosecutions would hurt or damage the economy (kind of the same idea as not prosecuting Bush officials for torture). Wall Street walked away pretty much scott free.
That brings us to now.
I like President Obama, but I fear that he is out of his depth when it comes to financial issues. He is far too logical and thoughtful to appreciate the lengths that the banksters will go to tilt the playing field in their direction, the rest of us be damned. Of late though he does seem to have started to question the perceived wisdom instilled in him by Summers and Geithner. The next appointments will tell if this is true.
The KEY decision that will set the tone for the next 4 years is the appointment of Geithner's replacement. This will be the person responsible for negotiating a way around the fiscal cliff and all that entails related to Social Security, defense spending, Medicare etc.
Already Wall Street friendly names are being thrown around ... like Erskine Bowles (of the Cat Food Commission). Just today on Bloomberg TV the announcers were pitching that he was Wall Street's pick.
If Bowles, or some other Wall Street friendly bankster is picked then you can start to seriously worry about Social Security and various entitlements.
(Let me be clear. By a Wall Street type I mean an individual that thinks that Wall Street in its current form actually adds value rather than being a ''taker'' from the economy. They believe that what is good for Wall Street is good for Main Street.)
Yesterday, also on Bloomberg TV, there was an interesting discussion which saw one commentator suggesting that the most important qualification for the new Treasury Secretary was that he/she was close to the President, someone who the President could trust implicitly. This is an opinion that makes sense - because if the President still has any progressive views left, then being able to get them on the table and then get them into the final deals, will still be possible.
So keep a close watch on how this plays out. This single appointment will likely say more about the direction of Obama's adminstration for the next 4 years than any other.
If you have any ideas for a ''good'' Treasury Secretary please add them in the comments.
For now other names being mentioned are:
Jacob Lew ... currently Chief of Staff.
Larry Fink, chairman chief executive of BlackRock
Roger Altman, chairman of Evercore Partners
A corporate CEO of CFO
My choice ... although he would never take the job. Ray Dalio.