Elizabeth Warren And The Independent Community Bankers of America Are Right: Antonio Weiss Should Not Become Undersecretary for Domestic Finance

By Simon Johnson

Antonio Weiss has been nominated to become Undersecretary for Domestic Finance at the Treasury Department. A growing number of people and organizations have expressed reservations about this potential appointment, which requires Senate confirmation – including Senator Dick Durbin (D., IL), Senator Jeanne Shaheen (D.,NH), Senator Joe Manchin (D., WV), the American Federation of Teachers (in a press release on December 17th), and other groups. And, from another part of the political spectrum, the Independent Community Bankers of America has also come out strongly against Mr. Weiss.

In a speech last week, Senator Elizabeth Warren detailed her concerns about Mr. Weiss’s background:

“He [Mr. Weiss] has focused on international corporate mergers and companies buying and selling each other. It may be interesting, challenging work, but it does not sufficiently qualify him to oversee consumer protection and domestic regulatory functions at the Treasury that are a critical part of the job.”

And Senator Warren made it clear that the Weiss nomination needs to be seen in this broader context:

“Time after time in government, the Wall Street view prevails, and time after time, conflicting views are crowded out.”

A line must be drawn and, as Senator Warren said on Friday evening, with regard to the Wall Street view that what is good for executives at big banks is good for the country,

“Enough is enough.”

The latest round of pushback from Weiss supporters against Senator Warren makes three points. First, this administration is not captured by the Wall Street view. Second, Mr. Weiss is not captured by the Wall Street view. And, third, that Mr. Weiss is so perfectly qualified for the job that all these broader issues are irrelevant or even illegitimate. None of these points has a substantive basis or can withstand scrutiny. The ICBA, AFT, and Senators Durbin, Machin, Shaheen, and Warren are right to continue opposing Mr. Weiss’s appointment.

On the extent of capture of this administration by the Wall Street view, the facts are straightforward. The Obama administration has continually refused to put forward any potential nominee for a senior position who has shown serious backbone with regard to financial reform. There appears to be a litmus test. If you want to be tough on reform – in the sense of confronting Too Big To Fail head-on or even just reducing the reckless risks that big banks take with derivatives – you cannot have a senior administration job.

A few reformers have, of course, managed to get through. Gary Gensler took financial reform seriously and implemented the Dodd-Frank law as chair at the Commodity Futures Trading Commission. The administration seems to have been surprised by how tough he was – and they did not reappoint him. Janet Yellen became chair of the Federal Reserve Board, but only because the White House could not get sufficient support for Larry Summers. And Tom Hoenig and Jeremiah Norton are strong voices for sensible policy at the Federal Deposit Insurance Corporation – but they were both put in office by the Republicans.

There is no balance of views at the top of the US Treasury. The Wall Street view – what’s good for the people who run big banks is good for the country – is fully in control. The most recent demonstration of this point came just last week, when House Republicans proposed to repeal Section 716 of Dodd-Frank – a direct attempt to help Citigroup and other megabanks by allowing them to run more dangerous derivatives out of their insured banks (and therefore create more downside risks for taxpayers and the broader economy). Treasury and the administration not only did not oppose this measure – they actively undermined House Democrats and Senator Warren in their attempts to stick up for Section 716. There is no backbone on financial reform at Treasury.

Regarding Mr. Weiss himself, the reasonable question is: to what extent does he believe in any version of the Wall Street view?

We know many things about Mr. Weiss but we don’t know everything. Therefore any reasonable observer faces a signal extraction problem – there is plenty of noise and distraction, but what are his real views? Here is what we have to work with:

  • Weiss has no known competence on anything to do with financial regulation. There is no track record.
  • Weiss has never communicated, in public or private, on financial reform issues with anyone who has worked hard against the Wall Street view over the past six years (or ever).
  • Weiss’s employment has involved advising on international mergers and acquisitions for 20 years. Lazard, his firm, does deals involving big banks – and it hires plenty of people who previously worked at global megabanks such as Citigroup.
  • Many people who live and work in this kind of milieu share some version of the Wall Street view. For example, some of the most vociferous defenders of Citigroup are people in smaller financial firms and in law firms (and in think tanks) who make their living from the Citi ecosystem (and the implicit government subsidies that keep this bizarre and dangerous structure going).
  • Not everyone who has worked in finance believes in the Wall Street view (e.g., Gary Gensler). But at this point – six years after the crisis – most of the serious skeptics regarding the supposed advantages of megabanks have made their voices heard, at least in private.
  • Weiss is associated with Robert Rubin, for example through a paper (on fiscal issues) they both signed that was produced by the Center for American Progress. Mr. Rubin has, while in office during the 1990s, while at Citigroup during the 2000s, and still today, consistently exhibited a strong version of the Wall Street view.
  • Rubin has exerted great apparent influence on this administration, including by directly or indirectly encouraging the White House to hire people with minimal public track records on financial reform – who then prove to be profoundly disappointing by siding repeatedly with the big Wall Street players.
  • More broadly, the attitude of the Obama administration on financial reform has been profoundly disappointing – including, now, not even going to bat for their own legislation.
  • Everyone on the Board of Governors of the Federal Reserve System has at this point been appointed or re-appointed by the Obama administration. The only person on that Board who definitely does not share the Wall Street view is Janet Yellen.
  • The administration has steadfastly refused to take seriously any potential appointees to the Fed Board of Governors who would be tough on the Wall Street view. There have long been two vacancies on the Board – and the administration will not advance a single person who worries about the profound risks created by big banks or any kind of proven willingness to implement the Dodd-Frank reforms.

In recent days, Mr. Weiss’s supporters have sought to rally support through two outside letters that stress Mr. Weiss’s supposed qualifications for the job. But both these letters further weaken the case for Mr. Weiss – seen in terms of the signal extraction problem, these interventions strengthen the likelihood that Mr. Weiss shares a disturbing version of the Wall Street view.

One letter, dated December 11, is from four former Undersecretaries for Domestic Finance. The authors concede that Mr. Weiss has no experience in managing the national debt so, by their own definition, the issue is whether Mr. Weiss is suited to a key position relative to financial regulation. Their argument comes down to this:

“Mr. Weiss has spent a quarter century operating in financial markets, including more than 20 years at Lazard, the last five of which as Global Head of Investment Banking. He has specific expertise advising companies how to grow, and how to finance that growth. Lazard is not a money center or lending bank and does not engage in sales and trading. Mr. Weiss has been deeply involved on behalf of large and small client companies in negotiating every type of financing, from debt and equity through more complex structures.”

All this says is: he worked on Wall Street, knows about corporate finance, and did not directly get bailed out in 2008-09. But there is no definite or specific information here that helps us understand or verify whether Mr. Weiss at all shares, or even deeply believes in, the Wall Street view – an important part of which now is “bailouts are fine” and “the government made money”; completely ignoring the costs of the financial crisis to the broader economy and to ordinary Americans.

The fact that Mr. Weiss’s strong supporters would send a letter devoid of relevant information on this point should itself be interpreted as a signal. If Mr. Weiss were at all skeptical of megabanks, now would be a good time to communicate that point – and we see nothing of the kind.

The second letter, dated December 12, is from the Partnership for New York City, which is an organization comprised primarily of leading New York-based companies – naturally heavily weighted towards finance. The membership of the Partnership includes all the Too Big To Fail banks, although most of them chose not to sign this letter (with the exception of Morgan Stanley).

Instead, the prominent names among those signing include top Wall Street lawyers, people at financial firms that do a lot of business with TBTF banks as partners or counterparties, and former executives from the largest global megabanks (including the former chairman of Citigroup). Many of these individuals have no material interest in seeing an end to the distortive government subsidies associated with any financial firm perceived as being Too Big To Fail. Indeed, the net worth, status, and professional opportunities for many on the Partnership’s letter are presumably closely tied to the fortunes of TBTF banks. These are smart, rational people with a good grip on how the world works – it does not seem unreasonable to think many of them wish to continue receiving, indirectly, the benefits of implicit taxpayer support provided to the likes of Citigroup.

Similar views to those of high-profile individuals in the Partnership for New York are not underrepresented in this administration and in this Treasury Department. Many of these people have access also to the very top of the White House.

And, as matter of routine, an influential subset of this group also appoints, oversees, and can actually remove from office one of our most important financial regulators, the president of the Federal Reserve Bank of New York. A major part of our modern difficulties can be traced back to the fact that the New York Fed has become completely captured by the Wall Street view. (Senator Jack Reed has a legislative proposal that would help deal with this problem by reducing the powers of the Board of the New York Fed, where the banking sector still holds the reins.)

It is hard to see the letter from the Partnership for New York as anything other than confirmation of the points made by opponents of Mr. Weiss. Camden R. Fine, president of the ICBA, put it this way:

“While Mr. Weiss has impressive credentials as a top Wall Street executive specializing in international mergers and acquisitions, Wall Street is already well represented at Treasury, and the narrow focus of Mr. Weiss’s professional experience is a serious concern for ICBA and community banks nationwide.”

Senator Warren agrees completely, with slightly different wording:

“It’s all about the revolving door – that well-oiled mechanism that sends Wall Street executives to make policies in the government and that sends government policymakers straight to Wall Street. Weiss defenders are all in, loudly defending the revolving door and telling America how lucky we are that Wall Street is willing to run the economy and the government.”

As argued by his opponents and as confirmed by the public statements of his strongest supporters, Antonio Weiss does not have the right background, qualifications, or – as far as anyone can reasonably determine – views to become Undersecretary for Domestic Finance.

33 responses to “Elizabeth Warren And The Independent Community Bankers of America Are Right: Antonio Weiss Should Not Become Undersecretary for Domestic Finance

  1. All I know is that I would’nt want to be a banker holding onto stolen money right now. They are one mouse click away from the grave.

  2. From the desk of Thom Hartmann (again):

    “Over the past few weeks, Elizabeth Warren has emerged as a leader of progressives on Capitol Hill. She led the charge against the part of the Cromnibus that gutted our financial regulations, and she is still fighting the White House over its nomination of bankster Antonio Weiss as Undersecretary of Domestic Finance in the Treasury Department.”

    “But while those of us on the left are thrilled that Senator Warren is coming into her own as a voice for change in Washington, the right, well, isn’t so thrilled. In fact, it’s downright terrified.”

    ….further along in the article:

    “Melissa’s right to be scared, because Elizabeth Warren represents one of – if not the biggest – threat to Republicans winning the presidency in 2016. Warren is, essentially, a populist, and if there was one good sign from this year’s midterm elections it’s that Americans of all stripes, even those living in red states, support a populist agenda.”


    Here is the problem with starry-eyed Democrats wanting (and in some cases, demanding…) the populist, break-up the big bank rallying cry:

    “The fight over a subsidy for risky Wall Street derivatives trading isn’t over quite yet. Sens. Elizabeth Warren (D-Mass.) and David Vitter (R-La.) introduced an amendment Friday to strip out the controversial provision from the spending bill that would fund the government until next October.”
    “The amendment forces Senate Majority Leader Harry Reid (D-Nev.) to choose between holding a vote to strip out controversial changes to Dodd-Frank in the House-passed omnibus, or anger the progressive wing of his caucus. Reid had already signed off on the funding bill in its current form, and the White House has also backed the measure and urged its passage.”

    …… then, further along in the article:

    “The House passed the $1.1 trillion omnibus spending bill Thursday, fending off a Democratic rebellion over riders that would roll back aspects of the Dodd-Frank reform and weaken campaign finance laws. Reid said he shared his colleagues’ reservations but urged Democrats to support the bill’s passage nonetheless.”

    “Reid is unlikely to allow a vote on the amendment during a crowded Senate schedule. The spending bill, including the Wall Street subsidy, is expected to pass by a wide margin.”

    “UPDATE: 6:20 p.m. — Reid filed cloture on the omnibus and “filled the tree,” a procedural maneuver that bars everyone from offering amendments. In other words, Warren and Vitter’s amendment has no chance of being added to the spending bill.”

    “Here are the 30 Democratic senators (more than half of those who voted in favor) who passed the Crominus spending bill yesterday and sent it on to President Obama for his certain signature. They knowingly endorsed a bill that stripped out a key protection of the Dodd-Frank financial reform bill, and a bill that endangered the pensions of many Americans”….. “As for you Harry Reid, Dick Durbin, Chuck Schumer, Pat Leahy, Patty Murray, and especially Barbara Mikulski, how does it feel to speak out of both sides of your mouth?”

    Baldwin (D-WI)
    Begich (D-AK) (defeated in 2014)
    Bennet (D-CO) (defeated in 2014)
    Cardin (D-MD)
    Carper (D-DE)
    Casey (D-PA)
    Coons (D-DE)
    Donnelly (D-IN)
    Durbin (D-IL) (leadership)
    Hagan (D-NC) (defeated in 2014)
    Heinrich (D-NM)
    Heitkamp (D-ND)
    Johnson (D-SD) (didn’t run in 2014)
    Kaine (D-VA)
    Landrieu (D-LA) (defeated in 2014)
    Leahy (D-VT)
    Mikulski (D-MD) (leadership)
    Murphy (D-CT)
    Murray (D-WA) (leadership)
    Nelson (D-FL)
    Pryor (D-AR) (defeated in 2014)
    Reid (D-NV) (the leader)
    Rockefeller (D-WV) (didn’t run in 2014)
    Schatz (D-HI)
    Schumer (D-NY) (leadership)
    Shaheen (D-NH)
    Stabenow (D-MI)
    Udall (D-CO) (defeated in 2014)
    Udall (D-NM)
    Walsh (D-MT) (defeated in 2014)
    Warner (D-VA)

    Senator Warren cannot openly criticize Senate Democrat for good reason so proxy web sites will have to shame these pols into getting in line, to mirror the Republican Tea Party screams and demands they put on their leadership and rank, with great success.

    Like I said earlier, the wonders of copy, cut and paste when time is of the essence….

  3. The Federal Reserve Board announced today that they are not going to implement the Volker Rule until 2017….DOW SOARS OVER 400 points – pass the Viagra…

  4. btw, the “…the worst cyber attack in history…” was NOT the hacking of Sony – it was the hacking done by the NSA and the IRS (where the enronistas got cushy jobs as a reward for what they did at enron?) of the “American People” for the banksters….now THAT was “hacking”!

    The strangest mind reading I indulged in – USA calls it body language and voice inflection – of today’s Prez’s Q and A was how he seemed surprised about the “American People” – he talks about us as if he is not one of us….!!

    Hatred of Slavs is REAL – Prima Facie evidence GALORE – don’t need “mind readers” (which is not how I would translate what the Russian said into English, but, ok, NYT, you need to sell papers)


    I blame the Beatles for my “terminal innocence” – their simple and sincere songs about “love” did not prepare me for “managing” the real world of 81 million $$$$ torturers and merciless and unrelenting bigotry from the army of hucksters that embrace the diversity of “…an atheist and a Mormon walk into the CIA….”

    Getting a “divorce” is the best option.


    btw, no one likes “Fascist Vegas”….best pivot away from more of it….

  5. From the desk of Elizabeth Warren ‏@SenWarren 19h19 hours ago

    Delaying the Volcker Rule is one more giveaway that lets Wall Street have more time to make risky bets. http://bit.ly/1wuxaJt
    View summary 0 replies 215 retweets 147 favorites
    Reply Retweet215 Favorite147

  6. Do we expect Hillary to be any better than Obama? I cannot go there. If the 99% want someone to FINALLY represent its interests, address infrastructure problems, tax the rich, address the horrible cost of education, reduce the power of the Military-Industrical-Security complex, it need either Warren or Sanders or both. BUT, we all have to support her or them — with MONEY, and lots of it. The 1% know how much a victory by either of them would cost, and such a reversal of fortune will dwarf even very generous campaign contributions.

  7. Wow. All Wall Street =bad. hey, Let’s hire someone with no banking or finance experience to run treasury.!!Maybe a professor who has never worked in the real world. Never mind mr Weiss has been a huge supporter of all things Obama . All things are black or white. You people are idiots

  8. Captain America

    If you ever want America to work for the “99%”, then change the campaign finance laws. Otherwise, America is a failed state and will only get worse.
    Happy Holidays,

  9. What about the $20,000,000 that Mr. Weiss is rumored to receive if he makes the move to Treasury? Is this accurate? And why wouldn’t this be against the law pray tell?

  10. This is what I don’t like about Obama. He has left Wall Street in a worse position for Main Street than it was when he came on the scene. TOO BIG TO FAIL>

  11. Hey guys, lets tear the place up.

  12. Elizabeth Warren can talk the talk but can she walk the walk? I have seen this before with obama. Before he was president. He talk the talk but when it came time to walk the walk he fell on his face and I don’t mean in prayer, I mean he lies after lies making obama the second worst president in America’s history, just after bush.
    Elizabeth Warren, don’t promise something you can’t deliver. If you have an opinion about something, fine. Don’t make it sound like if you were President you would do something about it.
    When you announce you are going to run for president and you start your campaigning are you going to be like obama? If not, tell me how you are going to be different then clinton, bush and obama?
    clinton, bush and obama may have the respect of the brain dead, moron, Sheeple Americans but for thinking Americans, they have missed the boat. clinton, bush and obama are, using a military term they are a “Charlie Foxtrot.”

  13. Really..President is being very pragmatic ..bash Wall street then appoint Wall Street scumbag to power positions ..money stream will keep coming ..what a drama !!!

  14. It is not a choice between Weiss and someone (as Jandrews says) who has never worked in the real world. Putting up false choices is a standard rhetorical trick. As Warren says, there are lots of people with real world experience who do not buy into the Wall Street view.

  15. bradman turner

    why did wiley sutton rob banks ? give up ? do you know the answer?

  16. Leave it to Thom Hartmann to call the far right wing war monger Elizabeth Warren a “progressive.” This posturing by Warren and others over a fait accompli merely tries to set her up for 2016. Hartmann fits perfectly the “liberal” Cindy Sheehan claimed opposed war only when Bush did it, but supported it whenever democrats did it. Hartmann has the ethics of Julius Streicher.

    Whatever candidate the democrats endorse will (1) Support Wall Street over Main Street, like all democratic presidents such as Clinton who repealed Glass Steagall and signed Gramm Leach Bliley; (2) will support perpetual war against poor people in the Middle East, Africa, and Latin America, while backing dictators on every continent; (3) will support Big Oil over the environment, like with Obama allowing BP back into the Gulf and Shell into the Arctic; will support Big Agriculture and GMOs and pesticides and herbicides over your health and the environment; and (4) will promise to save the world from the nasty republicans who support Wall Street, war and dictators, Big Oil, and Big Agriculture.

    If you do not have millions of dollars and vote for either the republicans or democrats, you vote against your own interests and the interests of all decent people in the world. If you want war and torture, vote for either a democrat of a republican.

  17. Public Citizen’s Lori Wallach explains in clear and engaging detail why so-called “Free Trade” is really an international corporate coup.



  18. We all are living in an oligarchy!! There is no democracy any more. Welcome to the Guilted Age. Where is Teddy??..maybe Warren/Sanders in 16!!!!

  19. All very good points – except for the guy making the false equivalency about nominating someone with no experience and calling everybody idiots – wishful thinking on his part. We are in a new gilded age, and we are living in a kleptocracy, and the only way out is campaign finance reform. But before that we must give as much as we can to Warren & Sanders or Sanders and Warren in 2016!

  20. Huh yea, this won’t end well.

  21. Looks like the Cult of Personality under the control of Klepto Rats has finally imploded…..

    It is not ILLEGAL to have a 3rd party candidate! INDEPENDENTS are the largest registered voter political party….more than Rethugs and Devolutioncrats COMBINED.

    Sanders was in D.C FAR LONGER than Warren, meaning he has done NOTHING longer.

    And it is the slithering sycophant kleptos who pawed through all that financial information banks required to get a goddamn “mortgage” and THAT ARMY of hooligans, busybody babushkas, and enronistas are the REAL problem – they made it PERSONAL – wiping out the Middle Class ala “hacking”…..

    This is a bottom up revolution – Warren has no clue who I am – PERSONALLY – but she sure as hell knows who empowered the slime that carried out the “torture” orders. Since we are all Medi-evil, throw just one enronista out into the crowd of 52 million wiped out Middle Class scientists, engineers and skilled tool and dye UNION and guilds and see what happens….THAT is the JUSTICE that has been denied….

    Those “green cards” that managed the phone terrorism for the banksters – in their ‘hoods, they back their GANG who deals in cash – drugs, weapons and SEX.

    Yup, the new Middle Class are GANGS with more cash than the researchers who were fired from the labs doing antibiotic research….

    Welcome to the PSYCHO third world of “immigrants”….good luck managing them, enronistas….

    Anyone who thinks that anything has changed in how personal information is going to be used when you sign ANY kind of housing contract, guess again….what a joke, the outrage about Sony….

    Warren is NOT a “manufactured” candidate….and if Clinton was not good enough when she was up against Obama the last time, what makes her the right candidate for 2016? Because her daughter married into the chosen ones tribe…?

  22. A really poor piece, of everything.
    It seems everyone , journalists as well, are too busy pushing they own views and not looking at the picture as a whole

  23. Annie the worlds problems come from the dry powder crowd who basiclly live off of that, sugars, cakes, wines, and cigarettes. They live an insane life, have to sleep little, and have many others to watch over their backs and take their place should a problem occur. Their numbers are enormus, they know of no other way to live, are filled with every imaginable type of cancer known to mankind, and are in complete denial about their situation. They are politicians, bankers, pro athletes, housewives, hard refined drug dealers, the ones who made, entertain, and control the sick world we have to now live with.

    For now, because it’s been proved that this behavior is unsustainable and will eventually, but suddenly, end for them, and many others too for that matter, because it’s that bad.

  24. http://rt.com/news/216691-pope-vatican-officials-sins/

    Pretty much the same “sins” in the Ivory Towers everywhere….

  25. All the focus, now, on how the massive sadistic heist was carried out in USA exported as “sanctions” against Russia is doing the same thing to the Russian economy that it did to the USA economy…..tanking it….

    “….yay! we are hurtin’ the Putin….”

  26. And why don’t you give us the full story, all the pain that money can buy.

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