Jacob Lew: Another Brick in the Wall Street on the Potomac (William K. Black)

[Octafish]

Dr. Black explains how Dr. Wall Street will continue bleeding the patient dry.



President Obama and Jacob L. "Jack" Lew walk near Marine One.

Jacob Lew: Another Brick in the Wall Street on the Potomac

William K. Black
Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle

EXCERPT...

The unobvious aspects of the pattern compound these problems. First, Obama likes to surround himself with failures. Geithner set the pattern. He was supposed to be the principal regulator of most of the largest U.S. bank holding companies. He was an abject failure. His speeches and his statements at the Federal Reserve System's FOMC meetings during the crisis demonstrate that he remained clueless to the end. For reasons of brevity, I discuss only three of his failures as Treasury Secretary below.

Lew has gone from failure to failure. He was one of the architects of both of the Clinton administration's disastrous statutory deregulatory actions that helped produce the epidemic of accounting control fraud that drove the Great Recession.

Emanuel and Daley were failures as directors of Fannie and Freddie. Lew was a failure at Citicorp's proprietary derivatives trading arm. That failure is particularly dangerous because the purpose of the Volcker rule was to ensure that federally insured banks did not take proprietary positions in derivatives. Obama has put failed anti-regulators in positions where they can best undermine the reregulatory effort that is essential to reduce the risk and harm of future crises.

Obama's senior financial advisors have also failed ethically. Lew's great moral challenge was whether he would be honest about his errors. Honesty is essential to preventing future harm. Lew failed this second, less obvious, test as well. The CBS special notes:

During a 2010 Senate hearing to confirm him as White House budget chief, Lew seemed to soft-pedal the role of financial deregulation in the housing crash, saying, &quot I don't) personally know the extent to which deregulation drove it, but I don't believe that deregulation was the proximate cause."

CONTINUED w/Links...

http://www.huffingtonpost.com/william-k-black/jacob-lew-another-brick-i_b_2446848.html

Gee. I had thought I wouldn't miss old Timmy G.