To CNN, More Regulation from Treasury Isn't Worth Noting

     Although President-elect Barack Obama could surprise observers with an out-of-the-blue pick, the three men being bandied about as likely candidates for secretary of the treasury all share the same pro-regulation philosophy – something CNN failed to mention.

     CNN discussed the possible picks, on “American Morning” Nov. 6. Business correspondent Christine Romans said that right now, “Naming a Treasury Secretary is like naming a defense secretary in a time of war.” If the position is that important, CNN should have mentioned the anti-free market leanings of the contenders. Instead, John Roberts repeated criticism of the current Treasury Secretary from prominent [1]liberal George Soros.

     Romans noted that some observers including Warren Buffett, “wanted Treasury Secretary Paulson stay on,” but Roberts said, “George Soros also says ‘take Henry Paulson and kick him to the curb…He says he's part of the problem that got us to where we are.”

     The short list according to Romans includes Paul Volcker, Larry Summers and Tim Geithner. All three are Washington veterans with center-left economic philosophies. Another name mentioned on "American Morning," was liberal Democrat New Jersey Governor Jon Corzine, a former head of Goldman Sachs.

     Volcker, 81, served as Chairman of the Federal Reserve under presidents Carter and Reagan and was replaced by Alan Greenspan in 1987. He is widely credited with defeating the “stagflation” of the Carter years by putting a tight reign on monetary policy, bringing inflation down from a peak of 13.5 percent in 1981 to 3.2 percent two years later.

     According to a June 3, 1987 [2]New York Times article, “The main philosophical difference between Mr. Volcker, a Democrat, and Mr. Greenspan, a Republican, appears to be in their views of the structure and regulation of the banking system. Mr. Volcker has tended to resist deregulation of banks while Mr. Greenspan is more favorably disposed to it.”

     A [3]Nov. 5, 2008 Reuters article cited liberal Columbia University professor and fierce critic of the free markets Joseph Stiglitz, who said Volcker is “‘the kind of person’ suited to be Treasury Secretary in the incoming Obama administration.”

     Another possible pick, Harvard economics professor Summers replaced Robert Rubin as Bill Clinton’s third and final Treasury Secretary in 1999. Although some have associated Summers with the unregulated derivatives market that helped precipitate the current problems, Summers made it clear in a recent interview that he’s no free marketer.

     “Moving beyond a 'trust the market no matter what, what's best for Wall Street is what's best for America' approach to the financial markets, is important," Summers told [4]Portfolio.com on Sept. 11, 2008.

     Geithner, one of the other men whose name is being tossed around, is president of the Federal Reserve Bank of New York and he worked for both Summers and Rubin at the Treasury as under secretary for international affairs.

     He’s been deeply involved in the Bush Administration’s crisis management this year, including, according to a [5]Sept. 18 New York Post article, “killing off Bear Stearns, Uncle Sam's seizing of mortgage misfits Freddie Mac and Fannie Mae, and taking control of tottering insurance giant AIG for a bailout deal.”