"Failure of Epic Proportions": Treasury Nominee Jack Lew’s Pro-Bank, Austerity, Deregulation Legacy

MATT TAIBBI: I think there’s a couple things. I agree with everything that Professor Black said. I think it’s—the symbolism of this choice is, I think, very important for people, just the mere fact of picking somebody from Citigroup and from that same Bob Rubin nexus that Timothy Geithner came from. And, you know, you heard Barack Obama, as he’s introducing Jack Lew, praising Tim Geithner as somebody who’s going to go down in history as one of the great treasury secretaries of all time. I think what this tells everybody is that Jack Lew is going to represent absolute continuity with the previous treasury secretary, who had a very specific agenda when it came to Wall Street. And I think we’re just going to expect more of the same, more of the same really being overt and covert support of these too-big-to-fail institutions that Lew worked for, Citigroup being the worst and most disastrous example of that kind of company. So I think it’s—the choice of somebody from that particular firm is fraught with pretty upsetting symbolism for the country, I think.

AMY GOODMAN: I want to go back to 2010, when Jack Lew appeared before the Senate Budget Committee for a confirmation hearing after he was nominated by President Obama to head the Office of Management and Budget. During the hearing, he was questioned by Senator Bernie Sanders.

SEN. BERNIE SANDERS: Do you believe that the deregulation of Wall Street, pushed by people like Alan Greenspan, Robert Rubin, contributed significantly to the disaster we saw on Wall Street several years ago?

JACK LEW: Senator, I—as when we discussed, I mentioned to you, I don’t consider myself an expert in some of these aspects of the financial industry. My experience in the financial industry has been as a manager, not as an investment adviser. My sense is, as someone who has, you know, generally been familiar with these trends, is that the problems in the financial industry preceded deregulation. There was an increasing emphasis on highly abstract leveraged derivative products that got us to the point that, in the period of time leading up to the financial crisis, risks were taken. They weren’t fully embraced. They weren’t well understood. I don’t personally know the extent to which deregulation drove it, but I don’t believe that deregulation was the, you know, proximate cause. I would defer to others who are more expert about the industry to try and parse it better than that.

AMY GOODMAN: That’s Jack Lew responding to Bernie Sanders, who, when President Obama announced his nomination of treasury secretary—to treasury secretary of Jack Lew, Senator Sanders said, "We don’t need a treasury secretary who thinks that Wall Street deregulation was not responsible for the financial crisis." Professor Black?

WILLIAM BLACK: Well, I mean, we can agree that he lacks expertise in the area, but he was supposed to have expertise. This was supposed to be his area of expertise, both in his role as OMB head under Clinton, and then, of course, as being in the industry and actually implementing the fruits of this deregulation.

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