The Right Opinion

An Unqualified Jack Lew Will Tax and Spend

By Lawrence Kudlow · Jan. 12, 2013

The worst part of the Jack Lew nomination for treasury secretary is not simply that he has no qualifications, standing or experience in the financial world or international sphere (think G20 and European debt crisis). Nor is it simply that he doesn't have any seasoned currency opinions (under Obama, the greenback has dropped 10 percent, while gold has doubled).

Yes, these are big disqualifiers. But the real problem is that Lew is a left-liberal Obama spear-carrier, whose very appointment signals a sharp confrontation with the Republican House over key issues such as the debt ceiling, the spending sequester, next year's budgets and taxes.

From all the way back when Lew was staff advisor to Tip O'Neill, he has been a man of the left. So as treasury secretary, I expect the former Obama budget director to push for trillions of dollars in new tax hikes, absolutely minimal spending restraint and no serious entitlement reform.

Instead of being a fresh face who can generate a clean start for a new slate of fiscal compromises, Lew – who doesn't play well with the other kids – is going to represent the same old Obama confrontation with the Republican House.

It didn't have to be this way. As treasury secretary, Obama supporter Larry Fink of Blackrock would have tremendous support from the financial community in the effort to solve our fiscal imbalances. So would budget reformer Erskine Bowles. Or Amex CEO Kenneth Chenault. Or even the outspoken Democratic banker Jamie Dimon.

These are all men of experience, high standing and respect within financial circles. Any one of them would have given Obama credibility and led us to serious talks about growing the economy and keeping us out of bankruptcy. Lew has none of their qualities.

And did I say Lew doesn't play well with the other kids? He may have singlehandedly sabotaged the Boehner-Obama deficit talks in 2011. “Jack Lew said 'no' 999,000 times out of a million,” House Speaker John Boehner told author and reporter Bob Woodward. “At one point I told the president, 'Keep him out of here.'” Many believe Lew was responsible for the last-minute $400 billion tax hike that doomed the talks.

Because there are so many more Democrats than Republicans, I have no doubt that Lew will be confirmed in the Senate. But he's going to take a lot of flack over his short experience on Wall Street, where he got a $1 million bonus for administering Citigroup's proprietary trading operation. Oh, that came on top of his $1 million compensation. And there was the big money made by shorting the subprime mortgage market, all back in 2008, when Citigroup got a $47 billion taxpayer bailout.

Now, you know what? I have no problem with guys on Wall Street or anyplace else making good money. No problem at all. But here's Lew's problem: His boss, Barack Obama, keeps lashing out at fat-cat bankers who receive obscene bonuses. Which means, during the Senate hearings, Lew is going to be hoisted on Obama's petard.

Lew is to the left of the departing Tim Geithner, just as Chuck Hagel is to the left of Leon Panetta, and John Kerry is to the left of Hillary Clinton. It gives you a sense of Obama's second-term direction, which is likely to move toward high taxes at home and weak national security abroad.

Some highly placed senior Obama advisors are telling me that Jack Lew is really a fiscally conservative Democrat who will sell spending and entitlement reforms to all those liberals in the Senate. Look, I don't even know the guy. None of my criticisms are personal. But I don't see any evidence of this fiscal conservatism. And I sure don't see an influential presence on the world stage to keep America front and center.

Jack Lew is no George Shultz, or William Simon, or Lloyd Bentsen, or Robert Rubin, or Hank Paulson. He is an inside, Obama political operator, not an independent voice. This is degrading to one of the biggest jobs in the government.

For my Republican friends out there, here's a piece of free advice: In the coming economic battles, stay away from debt-ceiling defaults and government shutdowns. Instead, keep a laser-like focus on implementing the $1.2 trillion sequester spending cuts, which would actually pay for last year's debt-ceiling hike, and put together a tough-minded cut, cap and balance spending-cut package for the upcoming budget cycle.

As John Boehner told me a couple of years ago, his primary purpose is to “stop the bad stuff.” Please, Mr. Speaker, hold that thought.



Wayne in Hinesville, GA said:

I truly believe that Odumbo wants the economy to collaspe so he can declare a national emergency and take over the country's resources. I can't see any other reason for some of the fiscal policies he is pushing. Appointing a leftwing loon who has little or no experience for Treasury indicative of his disdain for Congress. The same goes for Kerry and Hagel.

Saturday, January 12, 2013 at 9:11 AM

Doktor Riktor Von Zhades in Western KY said:

1) Since when is being qualified necessary these days? The Usurper in the WH isn't, so why should his minions meet any type of measuring stick?
2) I used to believe these folks were incompetent, now I believe they're just evil incarnate.

Saturday, January 12, 2013 at 9:40 AM

M Rick Timms MD in Georgia said:

Wonder if Lew has ever filed a tax form himself, made a payroll and calculated withholding, FICA and Medicare on his employees.
We know Geithner was a tax cheat, I'm willing to bet Lew is as well.

And remember when they told us that Tim Geithner, a guy who can't file his own taxes, is the ONLY MAN who can save our economy. That is what they told us. Now they are trying to sell us this Lew guy. What a bunch of liars and thieves.

Saturday, January 12, 2013 at 5:02 PM

enemaofthestatistquo in Monroe,GA said:

Mr. Kudlow, "put together a tough-minded cut, cap and balance spending-cut package for the upcoming budget cycle." You must actually believe there still exist a Federal budget cycle. The House must enforce a budget cycle. How? The pertinent phrases of the Constituion point to a 2 year budget cycle coincident with the term of each Representative. Art1, Sec7, P1; "All Bills for raising revenue shall originate in the House of Representatives; but the Senate may {MAY, not Shall] propose or concur with Amendments as on other Bills". Art1, Sec9, P7: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; And a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time." A recorded Budget and its execution and reportage by the POTUS. Art1, Sec8, P1,"The Congress shall have Power to Lay and collect Taxes, Duties, Imposts, and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States;...". Congress is vested with duty of administering, by authorizing the ways and means, the business of the Federal government. Art1, Sec8, P2, "To Borrow Money on the credit of the United States;. If exigencies necessitate loan liabilities. Art1. Sec8, P5; "To coin Money, regulate the Value thereof, and of foreign coin, and fix the Standard of Weights and Measures;...". Regulation of the Value of the Money can not be maintained except by stringent Congressional regulation of the Interest Rates by classes and categories of Commerccial Product. The Interest Rates are Measures of the cost of borrowed money and the Coinage specie is valued by weight of Base, Alloy, or Precious Metals. Art1, Sec8, P6; "To provide for the Punishment of counterfeiting the Securities and current coin of the United States;...'.The Federal Reserve must be denied permission to issue US Money. Art1, Sec8, P12; "To raise and support Armies, but no Appropriations of Money to that Use shall be for a longer Term than two {TWO] Years;...". Gee, a Constitutionally recognized Budget cycle, which is originated in the House and if passed by the House, and not acted upon by the Senate post haste, is then presented to the POTUS eleven days or more before House adjournment is Law (signed or unsigned per Art1, Sec7, P2.

Sunday, January 13, 2013 at 12:12 AM