You may not know the name Jack Lew, in fact most people outside of Washington, D.C. probably have. Jack Lew, former head of the Office of Management and Budget, will be taking over as White House Chief of Staff for William Daley, who is choosing to leave the post early. While the internal squabbles that led to this event occurring (you can read about those stories here
) what is interesting is the mainstream media, who jumped on Mitt Romney over his time at Bain Capital, are completely ignoring Jack Lew’s time spend at Citigroup in their alternative investments division.
From 2006-2008, Jack Lew was chief operating officer of Citibank's alternative investments division. And it was his division that made billions of dollars betting "U.S. homeowners would not be able to make their mortgage payments," as the Huffington Post reported.
The piece also reported: “Lew made millions at Citi, including a bonus of nearly $950,000 in 2009 just a few months after the bank received billions of dollars in a taxpayer rescue, according to disclosure forms filed with the federal government. The bank is still partly owned by taxpayers.”
The New York Observer breaks it down even further:
Prior to his appointment as a deputy secretary at the Department of State, Mr. Lew was Chief Operating Officer of CitiGroup’s Alternative Investments group.
Do you know what Alternative Investments are? They’re things like hedge funds, who buy things like credit default swaps! Credit default swaps are essentially the ability to buy insurance on someone else’s house in one hand as you hold anything else—the adjustable-rate mortgage you know they can’t pay off, or the capacity to sell that mortgage and therefore generate more mortgages like it, or a gasoline can—in the other hand. This is what Jacob Lew invested in!
In 2008 and the beginning of 2009, Mr. Lew took in $1.1M from CitiGroup.
This included a $900,000 bonus.
Not only did Jack Lew make money from betting against homeowners (a smart bet) he also took a bonus that was funded by the taxpayers. Isn’t this the revolving door between Wall Street and Washington that has so many upset? The left is beginning to pile on Mitt Romney for making money, why not Jack Lew? Isn’t just another Wall St. banker, a member of the 1% who doesn’t understand the plight of the middle class? Wasn’t he out to make money any way possible as an investment banker?
Personally I don’t care if Lew made money on Wall St. Good for him. What I am annoyed with is Obama replacing a guy who worked at J.P. Morgan (who replaced a guy for worked for Fannie Mae) with a guy who worked at Citigroup and the media is focusing on Mitt Romney whose career in leveraged buyouts was a far more productive form of capitalism.
Is it any wonder why people don’t flip on broadcast news or pick up most newspapers anymore? There is no balance in the coverage and with the internet people have access to different kinds of news sources. This Jack Lew story is just another case of the media’s bias hitting us right, smack in the face.