Jack Lew: A Bronx Jew Moves to Wall Street and the White House

President Barack Obama's choice of treasury secretary, Jack Lew, is an Orthodox Jew from a humble New York background with an - almost - unblemished track record.

Nadan Feldman
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Nadan Feldman

Jack Lew was nominated to become the next U.S. Treasury secretary Thursday. Born to a religious Jewish family, in the past year he has become one of the closest people to President Barack Obama. He also played a crucial role in the negotiations with Republicans during the recent fiscal cliff crisis. These talks actually won him the post.

Despite being highly regarded by many for his roles in various administrations, his past also includes a failed adventure at Citigroup that made him a millionaire at the expense of the tax payers. He has been known in governmental circles since the mid-1970s, but has always kept a low public profile and is virtually unknown outside Washington, D.C.

Lew was severely criticized for his short Wall Street adventure, which led to great losses and failed investments - but huge profits for him. Still, his riches notwithstanding, he is considered sensitive to social issues, and lives modestly with his family in The Bronx.

How did an Orthodox Jew from a working class neighborhood make it to one of the most influential roles in the world economy?

Jacob Joseph Lew was born in 1955, in Queens. His first public roles were in the Democratic Party. At age 20, he was already senior adviser to House Speaker Tip O'Neill. Lew expressed an economic viewpoint that encouraged assistance to the poor and low earners, and promoted many issues - including lowering tuition fees for students, national security reforms and public housing projects.

In 1978 he received a Harvard scholarship, and, in 1983, went on to complete his graduate studies in law at Georgetown. Lew established his own law firm and was appointed to several executive posts, including a senior role in the Boston Municipality budget department.

His meteoric rise began when Bill Clinton was elected to office in 1992. In 1993 he served as a special assistant to the president, dealing with the health care reform legislation Clinton planned to implement. A year later, he was named deputy director of the Office of Management and Budget (OMB), being appointed director in 1998. He filled the post until the end of Clinton's second term.

After leaving the White House, Lew served in a number of academic posts, including executive vice president for operations at New York University.

The only controversial element to his career began in 2006, when he was appointed  chief operating officer of Citigroup's Alternative Investments Unit, a proprietary trading group. The unit he oversaw invested in a hedge fund that bet on the housing market to collapse - a move that caused much criticism when he returned to the White House in 2009.

Lew earned $1.1 million for the year he spent on Wall Street, despite the fact that his unit lost billions of dollars as a result of his failed investments. In the first quarter of 2008, the unit lost $500 million. The same year the administration bailed out Citi to the tune of $45 billion.

Lew's short and bitter experience on Wall Street drove him back to the government's arms. His close relationship with the Clintons continued when he was appointed  deputy secretary of state for management and resources under Secretary of State Hillary Clinton.

In July 2010 he began his second term as OMB director at the White House, following Peter R. Orszag's retirement. He hoped to reenact the higher tax rates on the rich that were employed during the Clinton presidency. Still, he offered to reduce the rates from 40% to 25%.

In January 2012, Obama appointed Lew to chief of staff - one of the most influential and powerful roles within the administration. The appointment was slammed after it was revealed that Lew had received a $900,000 bonus from Citi after it was bailed out by the government, recording losses of $27.7 billion.

Lew became one of Obama's closest advisers and filled a central role in the speedy negotiations with the Republicans to avert the Fiscal cliff. Lew was bent on reaching an agreement, but insisted on minimal cuts in social and health programs - such as Medicare, public housing and food stamps.

Jared Bernstein, the former economic adviser to Vice President Joe Biden, said of Lew: "One of the things that Lew always deeply understood is the administration's importance to pensioners,  the poor and people that aren't connected to finances and economic markets. Many Republicans believe that everyone is connected, but that in fact that is simply untrue." 

Jack Lew, nominee for U.S. Treasury secretary.Credit: Reuters
President Barack Obama with Jack Lew.Credit: AP

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