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Former Chief Economist at Bear Sterns to become Under-Secretary of the Treasury

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You can’t make this up.   Politico notes that Treasury Secretary Mnuchin is filling out his team.

From Politico:

Senior Goldman Sachs banker Jim Donovan is under strong consideration for deputy Treasury secretary and could serve as Mnuchin’s number two if confirmed by the Senate, people familiar with the matter said. Justin Muzinich, a former Morgan Stanley banker now at Muzinich & Co., is likely to take a senior position possibly as undersecretary for domestic finance or counselor, the people said. The counselor position would not require Senate confirmation.

Economist David Malpass, a veteran of the Ronald Reagan and George H.W. Bush administrations, is expected to be nominated by President Trump to serve as undersecretary for international affairs.

 David Malpass was the head economist at Bear Sterns.  Maybe you don’t know that name.  Bear was the firm at the heart of the Mortgage crisis.  Their collapse was one of the triggers that brought the Great Recession.  On August 7th, 2007, Malpass wrote an article in the Wall Street Journal entitled “Don't Panic About the Credit Market”.

The slowdown talk weighing on equities also reflects the Wall Street view that debt, mortgage and takeover businesses have replaced General Motors as the economy's bellwether. According to the bears: As goes the credit market, so goes the economy. Fortunately, Main Street is not that fickle. Housing and debt markets are not that big a part of the U.S. economy, or of job creation. It's more likely the economy is sturdy and will grow solidly in coming months, and perhaps years.

As Mother Jones noted, that was wrong.

Malpass’s article reminds me of this:

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Alas, this idiot is making economic policy.

What is that line about doing the same thing and expecting a different result?


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