Jack Lew, avatar of Obamanomics

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  • 09/21/2022

The Wall Street Journal on Sunday published a devastating indictment of Treasury Secretary nominee Jack Lew, in which it is noted that Lew and his defenders seem to have a great deal of difficulty laying out any positive qualifications for the job.  “All we can find,” they grumble, “is a list of things that Mr. Lew and his allies claim he was not responsible for.”

Well, that makes him perfectly qualified for a job with Barack Obama, doesn’t it?  Obama’s re-election campaign was all about not being responsible for anything, and it worked like a charm.

The Journal imagines gales of nervous laughter ripping through the halls of Citigroup in 2008, if someone had suggested one of their executives would wind up serving as Treasury Secretary just a few years later.  That’s not really ironic, though.  The point behind everything Democrats did in late 2008 was to re-write the history of the financial collapse.  They survived a moment of existential crisis that should have destroyed them, and emerged more powerful than ever.  No further contrary evidence is likely to erase their edit of history.  If a key figure from the subprime scandal can be President, why shouldn’t a bailout profiteer be Treasury Secretary?  To quote the world-class document shredder who became Secretary of State, “What difference, at this point, does it make?”

Lew’s career illustrates the point that in a command economy, political influence is the most valuable resource in the world, and those who sell it can rake in millions without breaking a sweat:

A former colleague of Mr. Lew’s argues that since he had no role in sales, marketing or managing investments, this one isn’t his fault either. But that raises the question of whether Mr. Lew was merely holding down a non-job reserved for those with political juice. He was brought into Citi by his patron and Clinton Administration colleague, Robert Rubin.

When it comes to pay for non-performance and monetizing Beltway status, Mr. Rubin set Wall Street’s unofficial world records. Over roughly a decade Citigroup shareholders paid the former Treasury secretary more than $115 million, though Citi said he had “no line responsibilities.” Unaccountable for any business results, Mr. Rubin nevertheless advised those who were accountable to take on more risk. Citi managers tragically followed his advice.

Without a famous name, Jack Lew couldn’t make Rubin money. But after a career as a government official and then a university administrator, he probably enjoyed making more than $1 million a year. Not bad considering the bank was collapsing.

The fact that almost no one seems to know what exactly he did for that paycheck underlines the fact that Mr. Lew comes to this job not as an expert or practitioner in financial markets, but as a political actor.

Sounds like a perfect Treasury Secretary for a world in which “too big to fail” government props up “too big to fail” business ventures, on the backs of too-small-to-succeed taxpayers.