FacebookTwitterGoogle+RedditEmail

What Will Lew Do?

It has been more than five years since the onset of the financial crisis.

It will be at least several more years before the economy recovers fully. And the too-big-to-fail banks are bigger than ever. President Obama’s nominee for Treasury Secretary, Jack Lew, needs to address these two problems.

On the first, would he be open to increasing the deficit to stimulate the economy? If not, why not? What sort of person would he recommend to chair the Federal Reserve? Would he want a continuation or even expansion of Ben Bernanke’s policy of quantitative easing – having the Fed buy government securities to increase the monetary supply? Or would he prefer a retrenchment in monetary policy?

Does he favor trying to break up the huge banks, whose protection by the government gives them an implicit subsidy? If so, what measures would he propose? If not, how does he justify this taxpayer subsidy for many of the country’s richest people.

Also, the European Union is moving ahead with a financial transactions tax. Such a tax would make the financial sector more efficient by eliminating a huge amount of wasteful transactions. It could also raise a large amount of revenue. Congress’ Joint Tax Committee estimated that the Harkin-DeFazio bill’s modest transaction tax, with a 0.03 percent rate, could raise $40 billion a year. Other proposals could raise more. If Lew doesn’t support this efficiency enhancing tax, why not?

Finally, we just saw Standard & Poor’s sued by the government on accusations that it mis-rated securities in the run-up of the housing bubble. A provision of the Dodd-Frank bill would end the conflict of interest inherent when, as is now the case, bond issuers pay raters, by having the Securities and Exchange Commission select the rating agency. This provision sits in some bizarre regulatory limbo even after an SEC study determined that it is feasible. Will Lew push to have this provision put into law? If not, why not?

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recoverying From the Bubble Economy.

This article originally appeared in Room for Debate.

 

More articles by:

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.

Weekend Edition
April 20, 2018
Friday - Sunday
Paul Street
Ruling Class Operatives Say the Darndest Things: On Devils Known and Not
Conn Hallinan
The Great Game Comes to Syria
Jeffrey St. Clair
Roaming Charges: Mother of War
Andrew Levine
“How Come?” Questions
Doug Noble
A Tale of Two Atrocities: Douma and Gaza
Kenneth Surin
The Blight of Ukania
Howard Lisnoff
How James Comey Became the Strange New Hero of the Liberals
William Blum
Anti-Empire Report: Unseen Persons
Lawrence Davidson
Missiles Over Damascus
Patrick Cockburn
The Plight of the Yazidi of Afrin
Pete Dolack
Fooled Again? Trump Trade Policy Elevates Corporate Power
Stan Cox
For Climate Mobilization, Look to 1960s Vietnam Before Turning to 1940s America
William Hawes
Global Weirding
Dan Glazebrook
World War is Still in the Cards
Nick Pemberton
In Defense of Cardi B: Beyond Bourgeois PC Culture
Ishmael Reed
Hollywood’s Last Days?
Peter Certo
There Was Nothing Humanitarian About Our Strikes on Syria
Dean Baker
China’s “Currency Devaluation Game”
Ann Garrison
Why Don’t We All Vote to Commit International Crimes?
LEJ Rachell
The Baddest Black Power Artist You Never Heard Of
Lawrence Ware
All Hell Broke Out in Oklahoma
Franklin Lamb
Tehran’s Syria: Lebanon Colonization Project is Collapsing
Donny Swanson
Janus v. AFSCME: What’s It All About?
Will Podmore
Brexit and the Windrush Britons
Brian Saady
Boehner’s Marijuana Lobbying is Symptomatic of Special-Interest Problem
Julian Vigo
Google’s Delisting and Censorship of Information
Patrick Walker
Political Dynamite: Poor People’s Campaign and the Movement for a People’s Party
Fred Gardner
Medical Board to MDs: Emphasize Dangers of Marijuana
Rob Seimetz
We Must Stand In Solidarity With Eric Reid
Missy Comley Beattie
Remembering Barbara Bush
Wim Laven
Teaching Peace in a Time of Hate
Thomas Knapp
Freedom is Winning in the Encryption Arms Race
Mir Alikhan
There Won’t be Peace in Afghanistan Until There’s Peace in Kashmir
Robert Koehler
Playing War in Syria
Tamara Pearson
US Shootings: Gun Industry Killing More People Overseas
John Feffer
Trump’s Trade War is About Trump Not China
Morris Pearl
Why the Census Shouldn’t Ask About Citizenship
Ralph Nader
Bill Curry on the Move against Public Corruption
Josh Hoxie
Five Tax Myths Debunked
Leslie Mullin
Democratic Space in Adverse Times: Milestone at Haiti’s University of the Aristide Foundation
Louis Proyect
Syria and Neo-McCarthyism
Dean Baker
Finance 202 Meets Economics 101
Abel Cohen
Forget Gun Control, Try Bullet Control
Robert Fantina
“Damascus Time:” An Iranian Movie
David Yearsley
Bach and Taxes
FacebookTwitterGoogle+RedditEmail