Biden’s economic adviser evokes fear of a Wall Street-friendly past

As the economic recovery is already stalled by the unemployment of millions of Americans amid the renewed coronary virus, Deese’s record raises fears on the left that Biden’s administration will follow the same Wall Street-friendly policy book as Obama, which they say eventually resulted in a protracted post-financial crisis. in a slow and uneven recovery.

“It is confusing and discouraging to see people in key positions in the White House who have played such a prominent role in getting us where we are now,” said Barbara Roper, director of investor protection at the American Consumers Association, about the impact of the 2012 deregulation. the financial rules. – And Brian Deese is part of it.

Biden, for his part, did not recommend austerity measures, although he said some longer-term priorities require new revenues, such as higher taxes for the rich. Instead, he argued that extensive economic assistance measures would help reduce the general government deficit.

“If we act now, even with deficit financing, we can contribute to growth in the near future,” Biden said in a speech in Delaware on Friday.

When he appointed 42-year-old Deese as Biden’s chief economic adviser, the transition team learned about his leadership in government rescue of the U.S. auto industry and its efforts in climate change policy. Obama’s alumni describe him as brilliant and compassionate, and say he impressed White House officials so much that his responsibilities grew rapidly, even though he was only in his 30s. Some on the left, such as Senator Ed Markey (D-Mass.), they defended themselves.

“The positions taken during the Obama administration largely implemented the political decisions made by others,” said Dennis Kelleher, head of nonprofit Better Markets on Biden’s political transition team and in favor of better financial regulation.

Obama even highlighted Deese in an exit interview with Rolling Stone in 2016 at the end of his presidency.

– He designed the Paris Agreement, the [Hydrofluorocarbons] Maybe the Agreement, the Flight Agreement, helped save the planet and it only does that while it has two babies at home and there could be no better person, ”Obama said.

Asked to comment on Deese’s economic agenda, a spokesman for the transition group pointed to a remark made by Biden earlier this week in which he praised him and outlined the administration’s priorities.

Deese has already received significant restraint for his post-administration work as a global leader in sustainable investment at BlackRock, a Wall Street titanium that manages $ 7 trillion in assets; proponents of climate change fear it will be too sympathetic to the financial industry.

His earlier statements suggest that the cracks between him and those on the left may be more extensive.

“Brian Deese could be a very good NEC director,” tweeted Tyler Gellasch, retired Senator Carl Levin (D-Mich.) Former assistant, a key lawmaker who opposed the 2012 financial downturn. – He’s very smart and works hard. But when he was in Obama’s administration, he called for financial deregulation and austerity. “

Consumer advocates are concerned about Deese’s association with the Obama-signed 2012 law, known as the JOBS Act, which eased rules on financial securities to boost startups.

Obama’s White House supported the measure despite objections from several Senate Democrats who warned it would harm investors. Deese was involved in drafting the legislation, according to three sources involved in the debate at the time.

These advocates fear that Congress and the Biden administration may continue to repeat. The legislation was sold to strengthen the economy as it recovered from the global financial crisis – a motivation that may reappear as the United States progresses in the Covid-19 pandemic.

“We are in an environment where there will be a strong impetus for job creation,” Roper said. “Sen. [Pat] Toomey, who will be chairman of the Senate Banking Committee if Republicans retain control of the Senate, has already indicated his interest in further deregulation under securities laws as part of the strategy. We need to be sure that the White House will not buy in anymore. And somehow it’s hard to feel confident.

The Obama White House has felt burned by some Democrats and consumer guards over the handling of this legislation. Opponents of the bill, who have raised concerns about inadequate investor protection, say they believe the White House is working against them to become legitimate while Obama prepares for the re-election campaign.

The bill, which came into law less than a month after it was first passed by a house then controlled by Republicans, allowed growing companies to comply with less publicity when they sought to raise capital. Critics say encouraging more companies to invest in private individuals – over-the-counter (OTC) – could offset the efforts Democrats are now demanding to require companies to report on climate risks and the diversity of their organizations.

“Information and rights are essential to make smart investment decisions, but they are also essential to holding companies accountable for addressing important issues such as climate change and diversity,” said Gellasch, now executive director of the Association of Healthy Markets. “Efforts to combat climate change include not only government spending and programs, but also empowering investors and empowering them to make better decisions.”

Some of Deese’s earlier statements are also worrying for leftists. At an event hosted by the Atlantic in February 2011, he supported Obama’s ideas on moderate spending and a focus on reducing the federal budget deficit.

Deese pointed to the president’s call at the time for a five-year freeze on discretionary spending, which he called “a disciplinary tool to do just that”.

“We have a theory of how to limit the size of government, but it needs to focus on how to make the U.S. competitive and talk about jobs and wages for U.S. workers,” he said at the time, which means “investing” in in areas of the economy where you can achieve higher returns and aggressively cut where you can’t. “

“At the same time, it makes sense to try to reduce this in the immediate term and cut off the leg of economic recovery because we know the pace of economic growth and our ability to limit our fiscal problems are interlinked, so we need to have a strategy where we can do both,” he said.

A few years later, Deese was faced with questions when Gene Sperling, NEC’s deputy director, was pushing why the administration was pushing to close the tax loopholes for multinationals that hide cash abroad but offer to sweeten the business by cutting corporate tax rates rather than revenue that offsets automatic spending cuts.

“What the president said is twofold, that is, if we can move these loopholes, let’s do it,” Deese said at a hearing on the appointment of OMB’s deputy director in May 2013.

“But if there is a good faith commitment to attempt a comprehensive corporate tax reform, and if it can be achieved in a way that is truly growth-enhancing and would indeed increase incentives to invest in the United States, then it is willing to consider it in a revenue-neutral manner. “

Still, Biden are allies caution that it is not clear how much Deese’s earlier statements say about his personal positions and note that he will be working for another president in retrospect.

Kelleher, on better markets, said: “At the end of the day, President-elect Biden made it clear that he had chosen Deese based on his personal working relationship with him and Deese’s commitment to giving all the power of the economy to climate change. He has all the looks to be a pretty skilled guy for that. “