When President Barack Obama nominated Jack Lew to be his new secretary of the Treasury, the corporate press seemed most concerned about his illegible signature, which would appear on most of the U.S. currency. Far less attention was paid to lesser publicized — and far more important — traits of Lew, and for good reason.
The secretary of the Treasury is one of the most powerful posts in the U.S. government and, indeed, the world. If confirmed, Lew would not just oversee the more than $3 trillion federal budget and the currency. The secretary also serves as chair of the boards and managing trustee of the Social Security and Medicare Trust Fund — as well as U.S governor of the International Monetary Fund, the International Bank for Reconstruction and Development, the Inter-American Development Bank, the Asian Development Bank and the European Bank for Reconstruction and Development.
He is also a member of the National Security Council and fifth in succession should anything happen to the president.
Almost every secretary of the treasury in modern U.S. history has come from — and usually returned to — Wall Street.
Lew has been hailed in some quarters as a “compassionate liberal,” who will stand up for the rights of poor and working people, particularly in negotiations with Congress over the “fiscal cliff.” But there is a grimmer side to Jack Lew.
A commentator from the right-wing American Enterprise Institute think tank let the cat out of the bag with the following statement: “[While Lew’s] strong liberal credentials may irk Republicans … he is well-positioned to sell a large deficit agreement to Mr. Obama’s Democratic base, [which is] wary of big cuts to social programs.” (Financial Times, Jan. 12)
Having served in the Clinton administration, where he advocated a hands-off approach to big business, Lew was in private practice during the Bush administrations. (“Is Jack Lew a Friend to Wall Street?” National Journal, Jan. 10)
Union busting, bailouts & Social Security
In 2004, he was the chief operating officer of New York University, where he oversaw a vicious — if seemingly mild-mannered — union-busting operation. During Lew’s tenure, NYU withdrew recognition from its graduate student employees’ union and punished participants in the ensuing strike. United Auto Workers Local 2110 President Maida Rosenstein said that Lew was “the point person” in “representing management’s position” against the union. (In These Times, Jan. 17, 2012)
From union busting, Lew proceeded to Wall Street. While he was chief operating officer of Citigroup from 2006 to 2008, he happily accepted $45 billion in bailout funds from the federal government. Citigroup sorely needed the funds, having lost $27.7 billion during Lew’s tenure. The unit he oversaw even invested in a hedge fund “that bet on the housing market to collapse.” (motherjones.com, Jan. 9, 2012)
But perhaps most revealing is Lew’s attitude toward cuts in Social Security as a means of “ending the fiscal crisis.” President Obama has touted Lew’s role in negotiating the Reagan “reforms,” which he says “saved Social Security” in the 1980s. (The Atlantic Wire, Jan. 10) Obama failed to mention that these so-called reforms were mostly at the expense of working people through such tactics as raising the retirement age.
During the recent fiscal-cliff negotiations, Lew not only showed a willingness to accept, but actually proposed deep cuts to Medicare and Social Security. Meanwhile, Lew maintains his friendly attitude toward the big banks.
According to Sen. Bernie Sanders, the Independent from Vermont, “The six largest financial institutions in this country have assets equivalent to $9 trillion, which is two-thirds of the [gross domestic product] of the United States of America. Three out of the four largest financial institutions today are bigger than they were before we bailed [them] out because they were quote-unquote too big too fail.”(Talking Points Memo, Jan. 11)
That’s where a lot of the money resides that’s been squeezed out of the working class. But don’t expect this bankers’ banker to go after it. He’ll be too busy trying to find ways to raid Social Security — the supposedly untouchable retirement fund that comes from deferred workers’ wages and has now been put on the chopping block by both capitalist parties.