- President Obama thinks Antonio Weiss, the current head of global investment banking at Lazard should be the next Undersecretary of Treasury for Domestic Finance.
- Politico reports that Elizabeth Warren disagrees.
- Warren was recently elevated to a leadership post in the Senate Democratic caucus.The Domestic Finance Undersecretary oversees most of Treasury’s functions related to bank supervision and consumer protection.
- Somewhat randomly, Weiss is also the publisher of the Paris Review.
Can Elizabeth Warren stop an investment banker from running financial regulation at Treasury?
Alex Wong/Getty Images
The background
There are longstanding tensions between the Obama administration and more left-wing Democrats over Obama’s approach to the financial services industry. Selecting a veteran investment banker to a key regulatory post inflames those tensions.
The fact that Weiss was personally involved in Burger King’s takeover of Tim Horton’s, which many view as a species of tax inversion — a kind of corporate tax avoidance the Obama administration is trying to crack down on — gives him additional political vulnerability.
Warren’s opposition is a problem for the White House for two reasons. One is that the recent leadership shift in the Senate Democratic caucus indicates that there’s a block of Senate Dems inclined to follow her lead on matters related to banking. The other is that with Obama now in the last two years of his term, Democrats on Capitol Hill see their political destiny as less tied to his and will be more willing to buck him when they feel that he has made the wrong call.
Of course, if Republicans decide that a veteran investment banker is exactly the kind of person they want as Wall Street’s watchdog at the Treasury Department then he’ll be confirmed easily regardless. But if the GOP sees an opportunity to embarrass Obama by joining a left-right pincers movement against Weiss, he might well go down.
The general theory that people with industry experience make for more bank-friendly regulators is popular, but somewhat lacking in evidence. Former Treasury Secretary Timothy Geithner, broadly viewed as Obama’s most bank-friendly employee, was a career civil servant with no background on Wall Street. Former CFTC Chair Gary Gensler, generally the Obama appointee who took the toughest line on bank regulation, was a longtime Goldman Sachs guy before joining the government. Weiss’ actual views on the key regulatory issues are, at this point, not widely known.
Further reading
Michael de la Merced has an excellent overview of Weiss’ business career, along with some glowing (but nonspecific) words of praise for Weiss from Neera Tanden of the Center for American Progress. Weiss was a co-author of this CAP tax and budget plan, that called for higher rates on the rich.
Many, many, many words have been written on the general divide between Warren-style Democrats and Obama-style Democrats regarding Wall Street.
In February, Alex Seitz-Wald of National Journal offered a provocative argument that even though Obama is president Warren has won the argument over the future of the party.
On the other hand, Noam Scheiber thinks Hillary Clinton represents continuity with a more Wall Street-friendly vision.
Ezra Klein argues that Warren should make a formal break and run for president.
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