Wednesday, April 1, 2009

Management We Can Believe In?



Barack Obama has been president for 10 weeks, and, as he attempts to deal with a severe economic recession, numerous positions at the Treasury Department have gone unfilled.

That being the case, it wouldn't surprise me if he was in something of a hurry to fill those vacancies and get a complete team in place at Treasury.

But I don't think even haste is enough of an excuse when the nominee is Neal Wolin, who was chosen last week to be deputy treasury secretary.

Who is Neal Wolin? Well, he was deputy counsel and general counsel at the Treasury for six years during the Clinton presidency. I suppose, on the surface, that would make him appear to be qualified for a position in that department under this president.

But, more importantly, as reported in WhoRunsGov.com, Wolin "supervised a team of Treasury lawyers that drafted a version of the Gramm–Leach–Bliley (GLB) Financial Modernization Act that allowed banks, insurance companies and brokerage firms to merge" in 1999. It was the legislation that essentially deregulated banks, making a lot of things possible that weren't possible under existing Depression–era law.

The final version of the bill passed both houses of Congress overwhelmingly. The Senate approved it by a 90–8 vote; the House supported it by a 362–57 margin.

Do you believe Gramm–Leach–Bliley was responsible for the current recession? Not everyone does. President Clinton doesn't. Neither do Wolin or Robert Rubin.

But, during the campaign last year, Obama seldom passed up an opportunity to criticize the legislation, especially after the economic meltdown. He made it clear, particularly after the meltdown but also in the days of $4/gallon gas and runaway food prices, how he felt about deregulation and its complicity in the nation's financial problems.

Now, make no mistake, the act did allow some pretty unsavory situations to develop. But it did not lower the standards for mortgages, and that, it seems to me, was a major contributing factor to the bursting of the housing bubble.

During the campaign, Obama was a strident opponent of deregulation. But now, less than three months into his presidency, he wants one of the architects of deregulation to be his deputy treasury secretary.

So let me get this straight — Obama was against deregulation ... before he was for it?

Surely, he won't make the mistake of saying that.

But, then, what will his answer be if the followup question is about the nature of the administration's policy on regulation and deregulation?

Come to think of it, I'd sort of like to know the answer to that one myself.

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