avatar
Meet Jack Lew, The Insider’s Outsider


When it was clear that Timothy Geithner wanted out, and that the President needed a new Treasury Secretary, a grass roots petition campaign called on the President to name Princeton University Professor and Nobel Prize winning economist Paul Krugman – also a New York Times op-ed writer – to the job.

The respected African American actor Danny Glover added a celebrity to the mix as the liberal advocacy group MoveOn began reaching out to the grassroots for support for Krugman, clearly a voice of distinction and economic populism.

Many among the Obama Camp followers believed that the second term gave the President a chance to act more in the spirit of Franklin Roosevelt than George Bush.

Obama's choice of mainstream economist Larry Summers and the banker Geithner as key economic advisors has been a wedge issue between the liberal base that backed the President and the White House, but in the end, the danger of an economic collapse led many on the left to turn a blind eye to the Administration's unwillingness to prosecute financial crimes by financiers in high places.

Convinced that a Romney victory would be worse for the economy and the country, Democratic voters turned the 2012 election into a referendum on a resurgent right.

Obama's re-election convinced many that there was an opening to push the Administration in a more progressive direction, even if Paul Krugman sees himself as a liberal, not a leftist.

But there was no traction for any more aggressive turn toward economic populism. Still rooted in a cautious centrism, Obama reached into his own inner circle to replace Geithner. His pick is a backrooom numbers man, his budget director and chief of staff, Jack Lew was undoubtedly initially considered a safe choice.

The New York Times calls him a Wall Street "outsider". Other media outlets poke fun at his strange signature of interconnected circles that they think will look funny on a dollar bill if he gets the job with his name on our money.

The Atlantic tries to portray him as some kind of independent, "aligned with a class warrior image that Obama adopted during the election campaign".

As we know, Obama is a man of many images, many of them contradictory. And Lew, whatever the image they want to sell to Party activists is "a firm supporter of the 1 percent", as writer David Graham acknowledges:

Don't take his liberalism to mean that Lew is a wild-eyed socialist though. In fact, he's a former banker. In 2008, he served as chief operating officer of Citigroup Alternative Investments, a division of the Wall Street behemoth. That group was involved in controversial practices like proprietary trading, and was involved in shorting the housing market as the economy lurched toward collapse. Perhaps in keeping with his resume, Lew has rejected the view of many fellow liberals who argue that deregulation of the financial sector contributed to the crash, saying, "[I don't] personally know the extent to which deregulation drove it, but I don't believe that deregulation was the proximate cause." Expect to hear muffled howls of unhappiness from the left, which will be glad to see Geithner go but upset at Lew's positions.

This is why the most progressive member of the Senate, Vermont's Bernie Sanders, was the first out of the box to say he won't support him:

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.

And so, here we go again with a nominee mired in internal party battles, especially at a time when many Democrats fear that the next "grand bargain" or major compromise will lead to cutbacks in entitlement benefits and social security.

Lew is unlikely to stand up to the President. He has had successes working with Republicans and reportedly earning their trust. He may have started in politics opposing the Vietnam War, but he is now spoken of as a pragmatist who will rationalise Obama's more conservative predelictions, not challenge them.

None of this seems to matter to some leading Republicans. They dislike Lew because they hate Obama and want to put an obstacle in the path of his nominees.

Said leading Republican Jeff Sessions, "Jack Lew must never be secretary of treasury." He promised to fight the nomination because of comments that Lew made two years ago claiming that Obama's budget plans would not raise the debt. Sessions called those comments "outrageous and false".

Given the deep partisan divide in Congress, ideologues there prefer paralysis to analysis.

The more things change, the more they remain the same.













Leave a comment