The Treasury Department is filling some of those
gaping holes in its senior staff, as Lewis Alexander, the chief economist at Citigroup Inc. (NYSE:C) is leaving the bank to become a counselor to Treasury Secretary Timothy Geithner.
The Associated Press cites a government official who spoke on condition of anonymity because a formal announcement has not been made. Alexander will work on domestic finance matters, the official said.
Although the lack of deputies in key spots at Treasury during a financial crisis has drawn criticism, the appointment of Alexander and his relationship to his former bank is also likely to raise eyebrows. Citigroup has already received multiple bailouts and is often cited as a prime candidate for nationalization.
Additionally, in 2007 Alexander predicted that although the housing market would remain weak well into 2008, it wouldn't spill over into the broader economy, which turned out to be way off the mark.
On the appointment Financial blog Zero Hedge
quips:
"All we need is another overly optimistic figurehead to provide the 3D
rose-colored glasses to the masses. Additionally, now companies that
have Citi as a counterparty are likely to immediately become elevated
to too big to fail status."
-
George White
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