Who SHOULD be the Next Treasury Secretary?

Four days ago, Ezra Klein reported that Erskine Bowles is the front-runner for Treasury Secretary in a second Obama Administration.  It’s hard to think of any plausible Democrat who would be a greater disaster.  Bowles has a man-crush on Paul Ryan; his chairman’s mark for his eponymous commission was simply an embarrassment on both political and policy grounds; a managing director of Morgan Stanley, he is Wall Street’s creature.  He has no business running Treasury any more than I do.  Take a look:

But if that is the case, then assuming (in best chickens-counting style) that there even is a second Obama Administration, who should the next Treasury Secretary be?

This isn’t merely idle blog talk (although I am under no illusions about RBC’s awesome policy influence).  One great failing of progressives is that after the 2008 election, we simply celebrated.  Wall Street did not: it got to work making sure that its people were in key positions, and that Barack Obama’s agenda would never challenge the financial industry’s power.  That’s how we got Timothy Geithner at Treasury, Larry Summers at NEC, Ben Bernanke reappointed at the Fed, Bowles himself appointed to an absurd “deficit reduction commission”, Christy Romer sidelined at CEA, and ditto Elizabeth Warren.

So if, as anyone not committed to entrenched plutocracy should hope, President Obama wins a second term, the very next day should be devoted to making sure that President Obama does not make such disastrous picks again.  That means being prepared to push very hard against rancid appointments like Bowles and in favor of someone else.  I would hope that the day after Obama’s re-election, Al Franken and re-elected Senator Sherrod Brown call the White House and make it very clear that if they have anything to say about, Bowles will never be confirmed.

But who should be?  A couple of notes: 1) at this stage, we should not worry about confirmability too much.  The Republicans will seek to block anyone (whether by filibuster or otherwise), and at some point progressives will have to press President Obama to make a recess appointment; and 2) for what it’s worth (and it may not be worth much), there has never been a woman or a minority heading Treasury.

There are a few I can think of offhand: former FDIC chair Sheila Bair, former CFTC chair Brooksley Born, Paul Volcker (too old?), Gary Gensler, Christy Romer, Jared Bernstein.  Hillary?  I would be very wary: the Clintons created the Wall Street Democratic party, all of her advisors will be Rubinites, and if she wants to run for President in 2016, negotiating with Wall Street potential campaign contributors provides dark incentives.  Still, she could be more progressive as a way of attracting primary support. 

 Paul Campos wants The Shrill One: that would be great, but I think that’s a little too far-fetched even at this stage.  Nevertheless, Campos is asking the right question.

By the day after Election Day, progressives should have an answer.  Because Wall Street sure will.


Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.

26 thoughts on “Who SHOULD be the Next Treasury Secretary?”

  1. A minor historical quibble (which will show my age, both for bringing it up and because I am not sure I remember enough for it to be coherent/identifiable to anyone).

    I think the Clinton’s merely cemented the relation between WS and the Dem party. I recall reading that the very strong tendency in that direction began in the 1980s when leading Dems realized that no only was Reagan successfully destroying the union movement, but the oil industry, once reliably Democratic, no longer was, given the strong green sentiment in the Dem party. Another reliable funding was needed. A key player in this was a Congressman whose name escapes me at the moment, but he was from southern CA and was 3rd, I think, in the House Democratic hierarchy when he was caught up in some financial scandal, and resigned within about 2 days.

  2. I love Krugman, but I doubt he has the talent, temperament or desire to be Secretary of The Treasury. I’d love to see him as a special economic adviser to the President or something similar (Shrillness Czar!), but I expect he likes his outsider status too much to take a job like that.

  3. Krugman has said repeatedly that economics/punditry and governing are very different skill sets, he has the former but not the latter. On the other hand Joseph Stiglitz also has a Nobel Prize and Bates Medal as well as time as senior VP and Chief Economist at the World Bank suggesting the organizations skills a treasury secretary needs.

    On the other hand if we are discounting confirmability as an option Andy Stern or John Sweeney would be good choices.

    1. The Fed might be a better match…

      I always wonder why his name is never floated if only as a negotiating tactic. Stiglitz might seem a bit more palatable if Galbraith were viewed as an alternative.

  4. William K. Black. Maybe not for Treasury Secretary, but for some senior role where he could give some bankers hell.

  5. The key question is just what we want out of a Treasury Secretary. What responsibilities would they have at Treasury and what would be their role within the administration? What would they need to be effective? There are many potential candidates who are good in some areas and yet flawed in others (Bair and Volcker spring to mind).

  6. I’m self-identified conservative, but I’d be in favor of Sheila Bair. Her general idea–that banks ought to clean up their balance sheets–seems to be rather to the point.

  7. I think we should save Paul Krugman for when Bernanke’s term as Fed Chairman expires.

  8. How much does it actually matter, who the Treasury Secretary is? Anyone radical enough to make a difference will be slow-walked to death by the actually-existing industry the regulation of which he or she is charged to execute.

    1. It matters because, globally, things are still going south at a fairly rapid pace. It would be nice to have someone in place about 2015 who would make use of another strong negotiating position.

  9. Bowles? Oh f*ck me. Damnit, Barack.

    Krugman is a bad idea. I want him influencing policy debates, yes, but that doesn’t scream Treasury Secretary, does it? And even if it did… it’s totally implausible.

  10. Well, just because I like him, Phil Angelides.

    Actually I’ve very fond of Eliot Spitzer too. Even though there was that … um, little scandal.

    Since we aren’t worrying about confirmation yet.

    1. I know he hasn’t got much finance background, but he’s got the conflict of interest thing down cold. Which is nice.

      1. Angelides is too bland for this fight. Spitzer has the aggression necessary to challenge the cosy status quo. This is fantasy baseball, right? Obama wouldn’t want him precisely *because* he would be aggressive enough to make a difference.

    2. Yes, Eliot Spitzer would be a fantastic choice, and his scandal isn’t worse than Geithner’s tax mess-up. Notice how Geithner was given a pass on his income tax mess-up? Want to bet Spitzer wouldn’t be given the same chance? Reformed sinners are only accepted if they’re Republicans, like Gingrich.

    1. Bloomberg would be a disaster. Not only does he have an ego the size of montana, but he seems to truly believe that the finance industry is god’s gift to the little people.

      1. Well, I would guess most people with the necessary finance background would probably have huge egos.

        I like him because he dates a woman his own age, even though he has a $billion. But, I guess my expectations for men have been systematically lowered. He does have flaws, certainly, but still seems less douche-y to me than a lot of others.

        I read a lovely article about Bogle, the Vanguard guy. I kind of liked O’Neill, who was a Pres. W. guy? Or was it 41? Heavens, my memory is going.

        Hmm. There must be others.

        Also, I don’t think Angelides is bland. Not sure where people are getting that.

      2. And theoretically, what we need is a Nixon so he can go to China? But of course, he’d have to *want* to…

  11. Simon Johnson, hell on Wall Street, good adminsitrative record. Problem with Stiglitz is he can’t run anything, too disorganized.

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