Obama Must Pick the Right Treasury Secretary

by John M. Curtis
(310) 204-8700

Copyright Dec.16, 2012
All Rights Reserved.                                         

           With the economy still limping along and the “fiscal cliff” looming, President Barack Obama has no room for error in his pick to replace 51-year-old Treasury Secretary Tim Geithner.  While Geithner worked at Goldman Sachs under former George W. Bush Treasury Secretary Hank Paulson and served as president of the New York Fed, he had sparse economics and business background.  Receiving on-the-job training wasn’t enough for the Dartmouth A.B. graduate in government and Asian studies, nor was his masters degree at Johns Hopkins in international economics and Asian studies.  From Day-One, Geithner fumbled, stumbled and bumbled through one of the most sluggish economic times in U.S. history.  While Tim can’t be blamed for Bush’s Great Recession that lingered in Obama’s first four years, he also wasn’t an articulate voice reassuring U.S. financial markets.

             Poised to replace Geithner, Obama must get it right this time around.  Floated as frontrunner is Barack’s current Chief of Staff, 57-year-old Jack Lew.  While a respected bureaucrat with years of experience with the Office of Management and Budget, Lew also has no real formal training in economics, management or business.  Whatever his credentials, he lacks the business, economics and Wall Street acumen needed during this time of grave economic peril.  Lew’s lack of business and Wall Street savvy won’t reassure roiled economic markets, especially with today’s turbulence.  Serving as a Congressional aid for the late House Speaker Tip O’Neil or as a special advisor for Bill Clinton or even his current bureaucratic job as OMB Director doesn’t qualify Lew for Treasury Secretary.  Obama truly has outstanding picks for Treasury Secretary available:  Just not Jack Lew.

             During his Senate Judiciary Committee confirmation hearing to run the OMB in 2009, Lew told Sen. Bernie Sanders (I-Vt.) he’d didn’t know whether deregulation caused the 2007-08 financial crisis.  Asked by Saunders whether or not former Fed Chairman Alan Greenspan and his Treasury Secretary Bob Rubin over did the deregulation, Lew demurred.  “Senator, I don’t consider myself an expert in some of these aspects of the financial industry,” Lew told Saunders, unsure whether or not deregulation had any role in the nation’s financial collapse.  Admitting he’s not an “expert” in matters related to the financial industry is precisely why Obama should not pick Lew for Treasury Secretary.  Given the dire straits of the U.S. economy, the next Treasury Secretary must not act clueless about what caused the economic collapse or what’s needed to fix it.

             All Cabinet positions must be filled with the best-and-brightest leaders in their respective fields.  If Wall Street’s top executives or the nation’s top economists don’t respect the Treasury Secretary, then the economy can’t get the guidance needed to get back on the right track.  Federal Reserve Board Chairman Ben S. Bernanke, a former Princeton University economics professor, can’t be the only one guiding the U.S.  economy.  When former President Bill Clinton picked Robert Rubin to replace Treasury Secretary Lloyd Bentsen in 1995, he picked the right man.  Rubin graduated Summa Cum Laude from Harvard in economics, and attended the London School of Economics before graduating from Yale Law School.  Rubin earned his chops at the arbitrage trading desk at Goldman Sachs before being considered for the nation’s chief financial officer, not working some bureaucratic job.

             Before Obama makes a huge mistake nominating Lew, he needs to consider the consequences of more economic malaise.  If nothing else, former GOP presidential nominee Mitt Romney reminded Barack that the economy is important.  While voters rejected Romney and his running mate Rep. Paul Ryan (R-Wis.), they expect the president to pick the right person to run the Treasury Department.  Clearly, Clinton got it right in 1997 picking Rubin, fueling the most prosperous economy in post-War history.  Now it’s Obama’s turn to get it right.  No bureaucrat can lead the U.S. economy out of its current mess.  While some qualified candidates don’t want the job, many do.  Even Omaha-based 82-year-old billionaire investor Warren Buffet would consider serving his country.  Current PIMCO CEO, 58-year-old, U.S.-born Cambridge and Oxford graduate Mohammed El-Erian would consider the job.

            Of all the essential Cabinet positions, it’s the Treasury Secretary who’s responsible for managing the mighty U.S. economy.  No one can succeed if they don’t command the respect of Wall Street and the academic community.  No bureaucrat, like Lew, no matter how competent and skillful in other areas, can rise to the occasion to fix what’s eluded Obama over his first four years:  The U.S. economy.  Even PIMCO founder—the world’s largest bond fund—68-year-old billionaire Bill Gross would consider serving his country, lending his profound expertise to help fix the U.S. economy.  Financial markets won’t be reassured by someone without the economic education, experience and savvy needed to fix the economy.  Obama has many other economic geniuses in the business and academic communities ready-and-willing to serve their country as Treasury Secretary.

 John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com.and author of Dodging the Bullet and Operation Charisma.