Tag Archive: Secretary of the Treasury

Jan 16 2013

Treasury’s #2 Worse Than Lew

After Pres. Barack Obama’s pick for Treasury Secretary confessed to a lack of financial expertise, you would have thought that the president’s choice for the number two spot would have been someone to fill that gap. Silly you. President Obama’s choice for Deputy Treasury Secretary is rumored to be Ruth Porat, who lobbied for Wall St. against regulation. This is her profile from Business Week:

Ms. Ruth Porat has been Chief Financial Officer and Executive Vice President of Morgan Stanley since January 2010. Ms. Porat served as the Global Head of the Financial Institutions Group at Morgan Stanley from September 2006 to December 2009 and also served as its Vice Chairman of Investment Banking from September 2003 to December 2009 and Chairman of the Financial Sponsors Group from July 2004 to September 2006. Throughout the recent financial crisis, she has been responsible for the Financial Sponsors Group ‘s coverage of financial institutions and governments globally, and she led the team advising the U.S. Treasury with respect to Fannie Mae and Freddie Mac. Ms. Porat began her career with Morgan Stanley in 1987 in the Mergers and Acquisition Department.

According to Forbes, Ms Porat is the most influential woman on Wall St.

The Sunlight Foundation reports that Ms Porat lobbied on behalf of Wall St., meeting with regulators about Dodd-Frank rules nine times:

* 2012-03-27: Met with the Federal Reserve to express concerns on bank capital rules

* 2012-04-30: Met with the Federal Reserve to claim surcharges for Too Big To Fail banks were not necessary. Later also said regulating derivatives would hurt liquidity.

* 2011-12-14: Met with the Federal Reserve to ask for more lenient disclosure requirements for Morgan Stanley

* 2010-10-28: Met with the Federal Reserve to push back on Volker Rule and for more flexibility on Proprietary Trading

* 2010-11-02: Met with Treasury on the CFPB (no disclosures on meeting’s purpose)

*  2011-02-01: Met with Treasury on Capital and Liquidity (no disclosures on meeting’s purpose)

* 2011-05-03: Met with Treasury on the Volker Rule (no disclosures on meeting’s purpose)

* 2011-07-07: Met with Treasury on Derivatives (no disclosures on meeting’s purpose)

* 2011-01-05: Met with FDIC on Volker Rule (no disclosures on meeting’s purpose)

h/t DSWright at FDL News Desk

Ms Porat is not what Obama’s critics meant when they complained about a lack of woman in influential positions in the cabinet. Really, Mr. President, a Wall St. lobbyist? Jamie Dimon must be so pleased.

Jan 15 2013

Jack Lew: An Epic Failure

Sen. Bernie Sanders has already decided that he will not vote to approve President Barack Obama’s replacement for Timothy Geithner, Jack  Lew, AS Treasury Secretary, with good reason. It seems that Mr. Lew, who currently is the president Chief of Staff, does think that deregulation had a role in the housing crash. This is Sen. Sanders’ statement:

Jack Lew is clearly an extremely intelligent person and I applaud his many years of public service to our country. I believe that he will be confirmed by the Senate. Unfortunately, he will be confirmed without my vote. At a time when the middle class is collapsing and millions of workers are unemployed, I do not believe he is the right person at the right time to serve in this important position.

As a supporter of the president, I remain extremely concerned that virtually all of his key economic advisers have come from Wall Street. In my view, we need a treasury secretary who is prepared to stand up to corporate America and their powerful lobbyists and fight for policies that protect the working families in our country. I do not believe Mr. Lew is that person.

We don’t need a treasury secretary who thinks that Wall Street deregulation was not responsible for the financial crisis. We need a treasury secretary who will work hard to break up too-big-to-fail financial institutions so that Wall Street cannot cause another massive financial crisis.

We don’t need another treasury secretary who believes in ‘deficit neutral’ corporate tax reform. We need a treasury secretary willing to fight to make sure that large, profitable corporations pay their fair share in taxes to reduce the deficit and create jobs.

We don’t need a treasury secretary who will advise the president that he should negotiate with the Republicans to cut Social Security, Medicare, and Medicaid benefits. We need someone who is going to strengthen these programs.

We don’t need another treasury secretary who believes that NAFTA and Permanent Normal Trade Relations with China have been good for the American economy. We need someone in the White House who works to fundamentally re-write our trade policy to make sure that we are exporting American goods, not American jobs.

Matt Taibbi, contributing editor for Rolling Stone magazine, and William Black, associate professor of economics and law at the University of Missouri-Kansas City, a white-collar criminologist and former senior financial regulator, joined Amy Goodman and Juan Gonzalez at Democracy Now! to discuss why Jack Lew is a “failure of epic proportions



Transcript can be read here

At Huffington Post, Prof. Black also described Mr. Lew’s role as OMB Chief during the Clinton administration, that set the stage for our current economic and financial problems, his path to Wall St. and back through the “revolving door” to the Obama administration. He calls Mr. Lew “another brick in the Wall Street on the Potomac,”

From CBS News:

   Obama is clearly comfortable bringing another ex-Wall Streeter into an administration that, beyond a recent ratcheting up of populist rhetoric, has done relatively little to rein in the financial industry.

   That, in turn, reflects the ease with which Washington hands like Lew shuttle between the Street and the Hill. Case in point: Lew’s predecessor as budget chief, Peter Orszag, left the agency and joined Citi as vice chairman of global banking. A job in politics is no longer a back-door to a lucrative job in banking — it’s a red carpet. The revolving door keeps spinning.

   The Citi alternative investments] division ultimately lost billions. As for Lew, he naturally made big bucks during his three-year stint at Citi, including a [roughly $950,000 bonus in 2009 — after the company’s federal bailout.

Lew helped establish finance policy under President Clinton. [..]

Lew’s predecessor as chief of staff was William Daley. Daley is a lawyer. Daley was on the executive board of J.P. Morgan-Chase during the crisis and before that he was on Fannie Mae’s board of directors. Daley is a member of “Third Way’s” controlling board. Third Way is a Pete Peterson ally that lobbies in favor of austerity and cuts to the safety net. It pushes Wall Street’s, and Pete Peterson’s, greatest dream — privatizing Social Security. Privatization would allow Wall Street to increase its profits by hundreds of billions of dollars in fees for managing our retirement savings. [..]

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 obvious is vitally important, and it is largely ignored by the most prominent media. The obvious aspects help explain why Obama’s economic policies have been incoherent, ineptly explained, inequitable, and often slavishly pro-Wall Street at the expense of our integrity and citizens. [..]

Prof. Black gives examples of the less obvious aspects of the pattern that compound problem of Pres. Obama appointing people who have failed, not just professionally, but ethically and morally. It is an eye opening, scathing critique of an administration that is trying to force a destructive policy of austerity and why Jack Lew is a terrible choice for Treasury Secretary.  

Jan 14 2013

Krugman: The Keys to Economic Recovery

Paul Krugman Explains the Keys to Our Recovery



Transcript can be read here

Nobel Prize-winning economist and New York Times columnist Paul Krugman argues that saving money is not the path to economic recovery. Instead, he tells Bill, we should put aside our excessive focus on the deficit, try to overcome political recalcitrance, and spend money to put America back to work. Krugman offers specific solutions to not only end what he calls a “vast, unnecessary catastrophe,” but to do it more quickly than some imagine possible. His latest book, End This Depression Now!, is both a warning of the fiscal perils ahead and a prescription to safely avoid them.

On Pres. Obama’s choice of Jack Lew for Treasury Secretary

(W)hat the president needs right now is he needs a hardnosed negotiator. And rumor has it that’s what he’s got, so.

The president can’t pass major new legislation. He can’t formulate major new programs right now. What he has to do now is bargain down or ride over these crazy people in the Republican Party. And we what we need now is not deep thinking from the treasury secretary. If the president wants deep thinkers, he can call Joe Stiglitz, he can call other people. What he needs from the Treasury secretary is somebody who’s going to be very effective at dealing with these wild men and making sure that nothing terrible happens.

Damning praise, indeed.