Citi Economist Takes Job at the Treasuryby Tim Manni
According to a Citigroup memo, Lewis Alexander, the bank’s chief economist, will be leaving his post for a job at the Treasury Department. Mr. Alexander will serve as a counselor to Treasury Secretary Timothy Geithner. The move comes at a time when the Treasury Department remains extremely short on senior staff members.
The move is an interesting one, as it’s due to raise a lot of questions. Has Washington inherited some of Wall Street’s premier talent (and will they continue to) due to their own bailout restrictions? How will the markets react to the White House’s decision to employ the chief economist of an institution that remains viable only thanks to repeated government funding? Mr. Alexander’s rosy economic forecast in 2007 hasn’t help eased his critics’ speculations:
“I think that’s not going to spill over more broadly into the economy, and so I think we’re going to have a normal kind of housing cycle that’s going to last through the middle of this year,” Mr. Alexander said in a 2007 interview on PBS.
Yet, the Treasury is stretched thin and in desperate need of more seasoned staff. Before being hired by Citi in 1999, Mr. Alexander worked for both the Federal Reserve and the Commerce Department, so his experience in federal economics is nothing new.
The Obama administration has been plagued by the nomination withdrawals of various Federal appointees; the Treasury Department has been no different. Nobody seems to want the job:
Rodgin Cohen, a well-connected Wall Street lawyer, last week withdrew from consideration for the post of deputy secretary. Annette Nazareth, the former Securities and Exchange commissioner, dropped out of the running for the same job the week before.
The lack of Treasury personnel has led officials of foreign finance ministries to openly complain that no one is available to take their calls.
The fact is the Treasury needs all the help they can get. With Alexander’s experience, and at this point his willingness, the administration should be heading at least one step in the right direction. But can the same be said for Citi? No reports released so far have named Alexander’s replacement. We’ll have to wait and see if Citi will be able to recruit comparable talent to fill the empty position.