Washington Post - Jack Lew's Robert Rubin Connection Is A Bad Sign For Financial Reform

There usually are many misunderstandings around about Jack Lew, Obama's choose to run the Treasury Department, that's what you receive which has a general cipher including Lew.

One matter is actually apparent enough, from their association with previous Treasury Secretary Robert Rubin that will his stint at Citigroup for you to his professed lack of abilities inside economical markets: His track record can't inspire any hope which he will certainly treatment much concerning financial reform.

First, the misinformation: The Washington Post has a breathless history Friday headlined "Jack Lew Had Major Role At Citigroup When It Nearly Imploded ." This occurs regarding eighteen months once The

Lew's part at Citi had been almost never "major," at very least possibly not when the item came up on the expenditure decisions from the divisions where he / she worked. In fact, this individual appeared to be most likely kept far, distant out of all those decisions. As primary running officer, he or she experienced a great exalted name and definitely created a great deal of cash like , after Citi ended up being bailed out. But he or she handled back-office matters like payroll. As Bloomberg had written sooner this week, Lew's work was " " in the unit. He built the educates run on time, in some other words.

The Washington Post post promises which "More as compared to 15,000 financial advisers and bankers worked beneath Lew," which is might be genuine inside feeling make were a lesser amount than the pup inside the corporate and business pecking order, or even worked on some sort of decrease floor. But probably none associated with those bankers or monetary advisers answered that will Lew related to expense decisions.

And Lew have nothing at all related to the countless marked by controversy purchases inside Citi's alternative ventures system as well as your bet on John Paulson's hedge fund, that was back then betting next to subprime mortgage-backed securities. When they improved compared to that system 2008, the particular financial doom and gloom was already fully swing in addition to Citi had been well on it has the way to a massive administration bailout. As that Washington Post article things out:

A press generate announcing their fresh place because chief functioning policeman on the team reported this individual would oversee coordination involving the operations, technology, human being resources, legal, financial as well as local departments.

He has been the primary office manager, in some other words, same as his or her various other job.

What's oftentimes extra troubling in relation to Lew will be precisely how he got to Citigroup, and the fact of which he / she unsurprisingly managed to pay a couple of many years on Wall Street without mastering a lot of in relation to markets.

His position from Citi ended up being guaranteed within the suggestions of Rubin , that recognized your ex from their years functioning collectively within the Clinton government plus ended up being on Citi's accounting committee throughout 2006.

The link with Rubin is mainly troubling, as Rubin has been the chief architect belonging to the fiscal deregulation while in the 1990s this aided placed the step for that crisis. Lew was not as nearly Rubin when were Tim Geithner or Larry Summers, writes Michael Hirsh while in the National Journal. But he or she a minimum of owes Rubin intended for his big Wall Street payday.

And he seems to possess followed Rubin's mindset with regards to regulation, showing a Senate hearing really that he or she didn't consider deregulation appeared to be that "proximate cause" of the financial crisis. That put your ex during probability with standard wisdom, and squarely from the worldview belonging to the Rubinites.

So here is therapies be familiar with Lew when it comes that will fiscal reform: He's someone without experience in finance, nonetheless who seem to however compiled a income coming from some sort of bailed-out Citigroup and futures no less than one connected with Robert Rubin's opinions in relation to regulation.

Lew may yet astonish us. He is actually routinely described as smart, considerate and also capable. Reformers usually are hoping for the best. But we should prepare for something less.