Obama appoints team of liberal loyalists. Never mind experience or job qualifications


Wall Street Journal Editorial

(Via Susan Combs, Comptroller web page)

January 10, 2013

President Obama is expected to name Jack Lew as his Treasury secretary on Thursday, continuing his cabinet’s second-term makeover in his own image. He is assembling a team of personal and ideological loyalists whose job will be less to offer independent advice than to advance and implement his agenda for a larger, more redistributionist government.

Mr. Lew’s nomination will disappoint those (mostly naive CEOs) who were hoping for a second-term agenda more hospitable to business and private economic growth. Save for a stint in Robert Rubin’s Citigroup, where Democrats go to monetize their political connections, and a few years as an academic, Mr. Lew is a Washington lifer whose expertise is politics. He brings no special knowledge or experience in economic policy, private industry or global finance.

It’s notable how Mr. Lew’s reputation has changed during the Obama years. As White House budget director in the Clinton era, he was viewed by Republicans as a reasonable liberal they could do business with. But as budget director and chief of staff in the Obama White House, Mr. Lew has been the President’s most partisan and implacable negotiator.

Our sources who have been in the room with the 57-year-old say he is now a fierce defender of entitlements in their current form, resists all but token spending restraint, and favors higher tax rates. In taking these positions he no doubt reflects Mr. Obama, but no one should think he’ll emerge as his own man at Treasury.

It’s also worth noting how different Mr. Lew’s selection is from most modern Treasury secretaries, of either party. Democrats have tended to select men with credibility in the business or financial worlds. JFK chose Republican financier Douglas Dillon, while Bill Clinton chose moderate Texas Senator Lloyd Bentsen and then Mr. Rubin of Goldman Sachs. George W. Bush picked former or current CEOs, though until Hank Paulson economic policy was run out of the White House.

Mr. Lew’s selection signals similar White House dominance, as well as a degrading of Treasury’s traditional role as the voice for pro-growth policies. Mr. Lew is not the economic general you choose if you’re looking for tax reform or a bold growth agenda.

He’s the man you pick if you expect months of political trench warfare over taxes and spending. He’s the partisan you nominate if your overriding political goal is to destroy House Republicans in the midterm elections, not strike a deal with them.

Mr. Lew’s nomination would continue the post-election trend of Obama Unfettered. There’s no more restraining his progressive agenda, as during the last two years. Chuck Hagel will be unleashed to shrink the Pentagon and reduce America’s global military footprint. John Kerry will be dispatched to give engagement with Iran and other U.S. adversaries another try, whether or not they’re interested.

But Mr. Obama’s main project is to reorder the relationship of Americans to their government. His goal is to extend and entrench entitlements into the daily expectations of the middle class—from cradle to college to health care during the working years to retirement and then the grave. The productive engines of the private U.S. economy are to be reoriented to finance this income redistribution.

His first four years, at least before House Republicans rudely interrupted, were about extending and entrenching the entitlements. His next four years will be about protecting every inch of that expansion while trying to find the means to pay for it.

Mr. Lew’s main job will be to cajole or pound that money out of Republicans. And if he can’t do that, he’ll try to position Democrats to retake the House in 2014. Then in Mr. Obama’s final two years, the President and Nancy Pelosi could finish what they started and impose the new energy tax or value-added tax they know is essential to finance their dreams because it taps the middle class.

Mr. Lew only makes sense as a Treasury secretary if this is the agenda. Policies to grow the economy will be an afterthought. The GOP should calibrate its expectations and strategy accordingly.



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