Saturday, January 12, 2013

Treasury Nominee Jack Lew Can't Speak Our ... - Yahoo! Finance

Right beneath its mission statement on its official website, the U.S. Treasury offers the following description of its various duties and functions:

"Treasury's mission highlights its role as the steward of U.S. economic and financial systems, and as an influential participant in the world economy. The Treasury Department is the executive agency responsible for promoting economic prosperity and ensuring the financial security of the United States. The Department is responsible for a wide range of activities such as advising the President on economic and financial issues, encouraging sustainable economic growth, and fostering improved governance in financial institutions."

With White House chief of staff Jack Lew targeted to succeed Timothy Geithner, now only the Senate can stand in the way of his nomination. It's a critical job at a critical time that many observers say he shouldn't get.

Related: Jack Lew Knows More About Budget Issues Than Anyone in Congress: Greg Valliere

"The Treasury secretary's position is supposed to be the President's eyes and ears to the financial markets. He's supposed to know what's going on in the markets, interpret it, explain it to the President," says Jim Bianco, president of Bianco Research, in the attached video. He characterizes Lew as someone who "doesn't speak our language."

"As I look at Jack Lew, I am afraid that when financial markets do something he's either going to ask his assistants to explain it to him, read The Wall Street Journal to the President ? or worse, he's going to call the captains of Wall Street and they're going to give him their spin, and he's not going to be able to tell the difference between what's really happening and their spin," Bianco adds.

To be fair, Lew would not be the first financial lightweight to assume the top job at 1500 Pennsylvania Avenue ? which sits directly across the street from the White House. James Baker made the exact same move in 1985 under President Reagan. Baker was an attorney by education and a political insider and operative who ultimately became the gatekeeper to the Oval Office as chief of staff.

Related: Stocks Set to Slingshot Higher Ahead of Debt Ceiling Debates

Outgoing Treasury secretary Timothy Geithner has made it clear that he is ready to leave and plans to be gone by January 25, as has been widely reported. But confirmations don't always go as planned. In fact, Geithner's own confirmation hearings four years ago focused largely on his personal tax filing mistakes and how that could be awkward or problematic, given the Treasury's oversight of the IRS.

"You want somebody in the room so that when the President asks, 'What do the financial markets think? Why is the dollar doing this or the stock market doing that?', they can give it to him straight up," Bianco argues. He also notes that he thinks Lew is highly capable as budget director or chief of staff, "but the Treasury secretary is a specific position that he's not qualified for."

Related: Nothing But Battles Lie Ahead for the New Congress

Source: http://finance.yahoo.com/blogs/breakout/treasury-nominee-jack-lew-t-speak-language-jim-165745119.html

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