President Barack Obama talks with Chief of Staff Jack Lew during an elevator ride in the Eisenhower Executive Office Building. (White House/Pete Souza)
I suppose that he can't be much worse than Timothy Geithner, but that should be scant cause for cheer over the news that the president has nominated Jack Lew as Treasury secretary. Both championed the financial deregulation craze of the Clinton administration, and both are acolytes of Robert Rubin, the former Clinton Treasury secretary who unfettered Wall Street greed and then took his own considerable cut of the action.
Rubin went to work at Citigroup, the world's largest financial conglomerate whose legality was enabled by legislation he advanced while in government. He made off with a salary of $15 million a year during his decade at that bank, which specialized in toxic mortgage derivatives and had to be bailed out by taxpayers to avoid bankruptcy.
Lew's association with Citigroup was a far briefer and less rewarding three-year stint, but then the alternative investments unit of which he was chief operating officer in 2008 didn't do so well with its hedge fund and private equity investments. As Jia Lynn Yang points out in The Washington Post, "Massive losses in that unit helped drive Citigroup into the arms of the federal government, which bailed out the bank with $45 billion in taxpayer money that year."
But the taxpayer bailout did not interfere with Lew raking in more than $2 million in salary and bonuses in 2008, despite his unit's glaring failures. Nor did he seem to learn much from the experience as to the need for restoring the sensible government regulation of the financial industry that President Franklin Roosevelt had instituted to prevent another Great Depression and the Clinton administration had destroyed.
When asked by Sen. Bernie Sanders, I-Vt., at a Senate confirmation hearing in 2010, when Lew was nominated to be head of the Office of Management and Budget, whether the deregulation pushed by Rubin and former Fed Chairman Alan Greenspan had "contributed significantly" to the banking crisis, Lew responded: