Jack Lew

What’s Killing U.S. Growth

On April 6th, the Wall Street Journal published an editorial that merits careful examination: “Jack Lew’s Political Economy”. The Journal correctly points out that the Obama administration’s meddling with regulations and red tape is killing U.S. investment and jobs. The most recent example being the Treasury’s new rules on so-called tax inversions, which burried a merger between Pfizer, Inc. and Allergan PLC.

As the Journal concluded: “This politicization has spread across most of the economy during the Obama years, as regulators rewrite longstanding interpretations of longstanding laws in order to achieve the policy goals they can’t or won’t negotiate with Congress. Telecoms, consumer finance, for-profit education, carbon energy, auto lending, auto-fuel economy, truck emissions, home mortgages, health care and so much more.”

Alexander Hamilton: Defender of Property Rights

Treasury Secretary Jack Lew’s proposed degradation of the ten-dollar bill (read: the removal of Alexander Hamilton as the featured figure on the ten-spot) is wrongheaded. In addition to being the first and most distinguished U.S. Treasury Secretary and a renowned journalist, Hamilton also excelled as a lawyer and defender of property rights.

Hamilton’s Good for the Ten-Spot

I recently objected to Treasury Secretary Jack Lew’s proposed demotion of Alexander Hamilton on the ten-dollar bill. Hamilton was not only the first and most distinguished Treasury Secretary, but was also an accomplished professional in many other fields outside the confines of finance.

During his varied career, Alexander Hamilton was a profound journalist. His most famous journalistic project was a series of 85 opinion pieces that called for the ratification of the Constitution. These essays are called The Federalist Papers, and are the most cited sources by the U.S. Supreme Court. The Federalist Papers were published in 1787 and 1788 in New York City’s Independent Journal. These important essays — written under pseudonyms by Alexander Hamilton, James Madison and John Jay — were of very high quality and set the stage for the Constitutional Convention and the resulting product.

Margaret Thatcher and the Battle of the 364 Keynesians

With the death of Margaret Thatcher, and the ensuing profusion of commentary on her legacy, it is worth looking back at an overlooked chapter in the Thatcher story. I am referring to her 1981 showdown with the Keynesian establishment—a showdown that the Iron Lady won handily. Before getting caught up with the phony “austerity vs. fiscal stimulus” debate, the chattering classes should take note of how Mrs. Thatcher debunked the Keynesian “fiscal factoid.”

Jack Lew’s Cayman Adventure

Every so often you get a “teaching moment” in Washington. We now have one excellent example, as President Obama’s nominee for treasury secretary has been caught with his hand in the “tax haven” cookie jar. Mr. Lew not only invested some of his own money in a Cayman-based fund, he also was in charge of a Citi Bank division that had over 100 Cayman-domiciled funds. This provides an opportunity to educate lawmakers about the “offshore” world.

As you can imagine, Republicans are having some fun with this issue. Mitt Romney was subjected to a lot of class warfare demagoguery during the 2012 campaign because he had invested some of his wealth in a Cayman fund. GOPers are now hoisting Lew on a petard and grilling him about the obvious hypocrisy of a “progressive” utilizing—both personally and professionally—a jurisdiction that commits the unforgivable crime of not imposing income tax.

In a sensible world, Lew would be able to say what everyone in the financial world already understands: the Cayman Islands are an excellent, fully legal, tax-neutral platform for investment funds because 1) there’s no added layer of tax, 2) there’s good rule of law, and, 3) foreigners can invest in the American economy without creating any nexus with the IRS. But we don’t live in a sensible world, so Lew instead wants us to believe he didn’t realize that the funds were domiciled in Cayman.

I guess all the other wealthy progressives with offshore-based investments were probably also unaware, right?

Anyhow, I’m taking a glass-half-full perspective on this kerfuffle since it gives me an opportunity to educate more people on why tax havens are a liberalizing and positive force in the global economy.

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