Jack Lew —NOT the Proverbial Banking Insider

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Jack LewJacob (Jack) Lew, the likely nominee for the President’s Secretary of the Treasury, is well-positioned to deal with the three most immediate fiscal crises facing the nation: the debt ceiling, the deficit, and the fiscal cliff. Is he the proverbial banking  insider?

Unlike his immediate predecessor, Lew doesn’t come from a big bank or investment firm, but rather from positions as Chief of Staff to the President and past director of the Office of Management and Budget (OMB).  At OMB he directed the financial activities of the Clinton White House to four years of budget surpluses. As Chief of Staff he is intimately familiar with the thinking and goals of President Obama.

What does it mean? Most likely, he isn’t so well-attuned to the thinking and goals of the big bankers and their investment banking counterparts. This could be problematic once the looming “big three” crises are dealt with…but it could also play out in Lew’s and President Obama’s favor.

The next four issues and potential crises on Lew’s plate are right up a banker’s alley: tax reform; implementing Dodd-Frank act; implementing Obamacare; and managing the nation’s international economic relationships.

Each of these issues is controversial in its own right. Perhaps the most difficult, from an experience perspective, will be the implementation of Dodd-Frank act and its investment and finance aspects. It is here that Lew’s lack of insider experience and minimal Wall Street connections could either really hurt or really help his efforts to craft laws and financial policy.

The insiders haven’t done so well over the past 12 years. The country has run up massive deficits each year since 2001; it has only been in the past Presidential terms that deficits have begun falling. Maybe, as an outsider who once presided over the longest run of budget surpluses in years Lew will be able to bridge party and industry gaps and get the country’s finances under control again.

Anna Timone (195 Posts)

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