Newsmakers | United States

In what was hailed as a victory for American progressives, Antonio Weiss, a senior investment banker at Lazard who was nominated by president Barack Obama to the post of undersecretary for domestic finance at the US Treasury Department, withdrew his name for consideration in January after the liberal wing of the Democratic Party mounted a vocal opposition against him.

This would likely have made his confirmation process in the Senate long and tortuous, leaving him, even if appointed, little time to do the job before the next administration is inaugurated in January 2017. Weiss’s withdrawal points to a shift within the Democratic Party.

“With congressional Republicans controlling both the House and Senate, Democrats are likely to spend the months ahead unabashedly embracing a more populist economic policy agenda,” says Isaac Boltansky, senior vice president and policy analyst at Compass Point Research & Trading.

Weiss is widely regarded as capable, and is a liberal himself. But he came under fire because of his affiliation with Wall Street, as many in the American left have been calling for an end to the “revolving door,” the practice of bankers becoming regulators and regulators becoming bankers, particularly in the wake of the financial crisis.

Additionally, in his role as global head of Lazard’s investment banking division, Weiss was involved in a number of merger and acquisition transactions, most recently the merger between American and Canadian fast-food chains Burger King and Tim Hortons, that have resulted in so-called “tax inversions,” a much-criticized tactic by which US multinationals move their fiscal residency to more tax-friendly locations and pay less to the US government.

Although Weiss has extensive knowledge and experience of financial markets and how they operate, critics, including prominent MIT professor Simon Johnson, thought Weiss was not sufficiently qualified for a job that entails “running responsible federal government finances” as it has nothing to do with buying or selling companies.

Whatever the reasons, there is little doubt that Weiss’s decision to turn down the post signals the ascendance, in the nation’s capital, of the populist wing of the Democratic Party. As it turns out, though, Weiss has moved from New York to Washington anyway. He has become counselor to Treasury secretary Jack Lew—a position that does not require confirmation by the Senate but that still carries some influence with the Treasury, although at a reduced level. Weiss is expected to provide Lew with advice on a range of matters, including financial markets and the economy.