Yes, Jack Lew’s bizarre signature will look pretty awful on our currency, but the real ugly is what he means for our economy.
Lew, President Obama’s choice as the country’s next Treasury chief, will be a carbon copy of his predecessor, Tim Geithner: a drone who’ll mindlessly carry out the president’s short-sighted economic agenda, no matter how silly or disastrous the policy.
When Geithner took over at Treasury in the wake of the 2008 financial crisis, many on Wall Street expected big things. After all, he had a stellar resume: president of the New York Fed after serving in a top post at the IMF and in the Clinton Treasury Department under Bob Rubin and Larry Summers.
The markets shot up when he was named to the job, as traders applauded the appointment of someone they thought was a key architect of the 2008 banking rescues, which staved off a total collapse of the financial system and a likely depression.
But the markets soon turned south, as Geithner showed his true colors. Truth be told, Geithner had been a side player in the bailouts, which were arranged mainly by Bush Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke. But (as people in the markets came to realize) he was a key player in the crisis: As New York Fed president, Geithner was the key guy in charge of making sure the big banks like Citigroup didn’t load up on risky assets — which of course they did, which is why the taxpayer-financed bailout became necessary.
People who know Geithner say he’s weighing a tell-all book on the crisis and recovery. But it will belong on the “fiction” shelves, because nothing the president or his Treasury chief did had much impact. It’s been Bernanke’s unprecedented money-printing and super-low interest rates that keep inflating stock prices while keeping banks’ borrowing costs so low that it’s nearly impossible for them not to make money and repair their balance sheets.
The price of Bernanke’s medicine, of course, is a debased currency, plus a high risk of serious inflation if the economy ever picks up steam.
But that’s a big “if,” since nothing Geithner did in his four years on the job gives anyone confidence that the slowest economic recovery in modern history will speed up anytime soon. The administration’s near-$1 trillion stimulus sure never gave us the promised big boost, and neither Geithner nor Lew (nor Obama) offers any big pro-growth ideas.
All they have on the table is more of the president’s fetish for taxing “the rich,” whether that means families with a combined income of $250,000 a year or (for now) only above the $450,000 line. Plus, of course, pretending that all the costs and taxes associated with ObamaCare will actually be good for the economy.
Don’t count on Jack Lew to shake things up. He relishes the opportunity to press the president’s partisan agenda without a second thought to its consequences.
Most recently, he played a key role in the fiscal-cliff negotiations — a tryout, Washington sources tell me, for his appointment to Treasury. And I am told he stuck to the president’s class-warfare guns, refusing to budge on what serious people in both parties believe is the most important budget issue facing the country: namely the need to reign in entitlements.
Lew and Obama love to tout that they kept tax rates low for the vast majority of Americans, all except those nasty “billionaire” families and small businesses who’ll now pay their “fair share” to solve the deficit problem. In fact the big revenue-raiser from the “cliff” talks was the rise in the payroll taxes, which hits everyone from true billionaires like Obama lackey Warren Buffett, to the construction worker in Queens still waiting for his stimulus-created shovel-ready job.
Yes, liberals are also bemoaning that Lew, like Geithner, is an acolyte of Bob Rubin, the Clinton-era Treasury chief said to be too cozy with the big banks. In fact, after he moved to Citigroup, Rubin brought in Lew, who until then was a lifelong bureaucrat without significant private-sector experience. Lew, by most accounts, didn’t do much other than collect a couple of big paychecks during the bank’s period of greatest excess (the one Geithner didn’t stop) before moving back to government.
Say what you want about Bob Rubin, particularly his disastrous Citi performance: While in government, he was an independent thinker; goading President Bill Clinton to focus on paying down the country’s debt in the 1990s, rather than heed the big-spending liberals.
Geithner never showed similar moxie, of course — and neither will Jack Lew.
Charles Gasparino is a Fox Business Network senior correspondent.