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

[Agony]

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

http://www.democracynow.org/2013/1/11/failure_of_epic_proportions_treasury_nominee

From the transcript
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WILLIAM BLACK: Well, on financial matters, Jack Lew has been a failure of pretty epic proportions, and he gets promoted precisely because he is willing to be a failure and is so useful to Wall Street interests. So, you’ve mentioned two of the things in terms of the most important and most destructive deregulation under President Clinton by statute. But he was also there for much of the deregulation by rule, and a strong proponent of it, and he was there for much of the cutting of staff. For example, the FDIC, the Federal Deposit Insurance Corporation, lost three-quarters of its staff, and that huge loss began under Clinton. And the whole reinventing government, Lew was a strong supporter of that. And, for example, we were taught—instructed by Washington that we were to refer to banks as our "clients" in our role as regulators and to think of them as clients.

He goes from there to Wall Street, where he was a complete failure. You noted that part of what Citicorp did was bet that housing would fall. That was actually one of their winning bets. But they actually made a bunch of losing bets, as well. And the unit that he was heading would have not been permissible but for the deregulation of getting rid of Glass-Steagall under President Clinton. And you saw, as an example of Citicorp, why we shouldn’t be doing this. Why would we create a federal subsidy where all of us, through the U.S. government, are on the hook for Citicorp’s gambling on financial derivatives for its own account, you know, running a casino operation? That makes absolutely no public policy sense.

Then he comes into the Obama administration, and he was disastrously wrong. He tried very hard to impose austerity on the United States back in 2011, which is—he wanted, you know, the European strategy, which has pushed the eurozone back into recession, and Spain, Greece and Italy into Great Depression levels of unemployment.

And this is the guy, after all of these failures, who also is intellectually dishonest. He will not own up to his role and deregulation’s role and de-supervision’s role in producing this crisis—and not just this crisis, but the Enron-era crisis and the savings-and-loan debacle.
"""
Same old shit