Obama's New Chief Of Staff — Smells Like Change!

Writing in Salon, Glenn Greenwald reports on Jack Lew, Hopey-Changey's choice to replace William Daley as his chief of staff. Glenn gives us some background on Daley, who I used to illustrate just how screwed we truly are in my post America's Elites Own You. I believe that was the first post in which I used the classic George Carlin video on the "American Dream"—you've got to be asleep to believe it.

When President Obama last January announced the departure of Rahm Emanuel as White House Chief of Staff, many liberals were furious that his replacement was the Midwest Chairman of JP Morgan and Boeing Director William Daley, who was also an opponent of the Consumer Financial Protection Bureau and a critic of Obama’s health care bill as too leftist...

Rachel Maddow harshly condemned the choice ... and sardonically observed: “mmm – a banker and a lobbyist: smells like change.”

I don't have much use for Rachel Maddow, but she got that right. What will Daley do now?

Yesterday, the White House announced Daley’s departure — he will now co-chair Obama’s re-election campaign, which basically means raising huge amounts of money from his Wall Street friends — and unveiled his replacement as Chief of Staff: Jacob "Jack" Lew.

And what about the new guy? What was he doing prior to the financial crisis?

Here is what Lew [left] was doing in 2008 at the time the financial crisis exploded, as detailed by an excellent Huffington Post report from last year:

[Lew] oversaw a Citigroup unit that profited off the housing collapse and financial crisis by investing in a hedge fund king who correctly predicted the eventual subprime meltdown and now finds himself involved in the center of the U.S. government’s fraud case against Goldman Sachs. . . .

[I]t is his few years at Citi — in particular the one year he spent at its then-$54 billion proprietary trading, hedge fund and private equity unit — that’s likely to raise the most eyebrows in the coming weeks as Lew faces a Senate confirmation hearing.

Especially his unit’s investments in a hedge fund that bet on the housing market to collapse — a reality suffered by millions of American homeowners.

In particular, the Citigroup fund run by Lew, Citi’s Alternative Investments, invested heavily in the hedge fund of John Paulson, “who made billions off the deterioration of the housing industry by making bearish bets on securities tied to home mortgages — particularly subprime home mortgages.”

One of Paulson’s largest bets at the time involved Goldman Sachs, which the SEC has now charged with “defrauding investors by creating and selling exotic securities tied to subprime home mortgages in 2007 without disclosing that they were handpicked by a hedge fund [Paulson] that was betting on them to fail.”