Obama Tips His Hand With Tim Geithner.
President-Elect Barack Obama is moving forward at an extremely accelerated rate to form his cabinet. Obviously, with the number and severity of major challenges the nation faces, this atypical haste makes some sense. First and foremost on virtually everybody's mind is the financial crisis. The situation took decades to erode to its current point, but people are hoping for a quick fix. It's clear to anyone with even a cursory understanding (like me) that solutions will neither come easy nor fast. Our economy is in shambles, and our public and private debt is out of control. If done correctly, it could still take a generation to work out of the mess that we are in. There likely won't be any miracles.
I've seen and heard a lot of folks discussing what they perceive as unreasonable expectations among Obama supporters. This perception has been no doubt fueled by the Republican-formulated meme that people view our next president as a "Messiah". They believe that he has promised everything to everybody, and that the public will hold him to ridiculously high standards. The reality is that Obama is no extremist, despite what we heard during the election out of the McCain camp. If anything he is a centrist. Leaving aside the center-right or center-left characterizations, we can expect the former Senator from Illinois to take a pragmatic approach to governance. "Better than Bush" is as far as I'm willing to go in my speculations.
If you still fear (or hope) that our new federal executive is a "socialist", you should take a good, hard look at the team he's built so far. Last Friday, it was announced that Timothy Geithner (president of the Federal Reserve Bank of New York since 2004) will be the next Treasury Secretary. The markets responded by jumping ahead 500 points. Geithner is a Brooklyn native, and has attended Dartmouth and Johns Hopkins University. He is a world-traveler, having lived in India, China, Thailand, and Indonesia. It's notable that Geithner is not a "professional economist". His first job in government was with the US Treasury Department in 1988. He served as Under Secretary of the Treasury for International Affairs in the Clinton years, and then moved on to the Council on Foreign Relations and the International Monetary Fund.
Geithner is particularly known for dealing with crisis. This past March he engineered the rescue and sale of Bear Stearns, but also helped make the decision to let Lehman Brothers fail. He is also credited with managing serious troubles in Brazil, Mexico, Indonesia, South Korea and Thailand. During the current debacle in the US, he's had a close working relationship with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson. He's an establishment guy, with ties to Clinton advisers like Lawrence Summers and Robert Rubin. His philosophy is no doubt in line with the architects of the $750+ bailout that was recently approved by Congress. He's succinctly encapsulated his working philosophy by saying, “Most consequential choices involve shades of gray, and some fog is often useful in getting things done.” (The Wall Street Journal, Feb. 20, 2007).
On a personal level, it is said that Geithner is avowedly non-partisan, and a registered independent. He's known for his willingness to challenge authority, self-deprecating humor, and vast resources of energy. But he's also reportedly even-keeled and conciliatory. He's likely to maintain his close associations with Bernanke and Summers (who was pegged by Obama to be Chairman of the National Economic Council / Assistant to the President for Economic Policy*). It's evident that Geithner is an advocate of applying a robust activism in order to "save" the markets. Whether that means "business as usual" is yet to be seen, but the scuttlebutt is that Geithner wants even more power to search for solutions in order to avoid another Great Depression.
I've seen and heard a lot of folks discussing what they perceive as unreasonable expectations among Obama supporters. This perception has been no doubt fueled by the Republican-formulated meme that people view our next president as a "Messiah". They believe that he has promised everything to everybody, and that the public will hold him to ridiculously high standards. The reality is that Obama is no extremist, despite what we heard during the election out of the McCain camp. If anything he is a centrist. Leaving aside the center-right or center-left characterizations, we can expect the former Senator from Illinois to take a pragmatic approach to governance. "Better than Bush" is as far as I'm willing to go in my speculations.
If you still fear (or hope) that our new federal executive is a "socialist", you should take a good, hard look at the team he's built so far. Last Friday, it was announced that Timothy Geithner (president of the Federal Reserve Bank of New York since 2004) will be the next Treasury Secretary. The markets responded by jumping ahead 500 points. Geithner is a Brooklyn native, and has attended Dartmouth and Johns Hopkins University. He is a world-traveler, having lived in India, China, Thailand, and Indonesia. It's notable that Geithner is not a "professional economist". His first job in government was with the US Treasury Department in 1988. He served as Under Secretary of the Treasury for International Affairs in the Clinton years, and then moved on to the Council on Foreign Relations and the International Monetary Fund.
Geithner is particularly known for dealing with crisis. This past March he engineered the rescue and sale of Bear Stearns, but also helped make the decision to let Lehman Brothers fail. He is also credited with managing serious troubles in Brazil, Mexico, Indonesia, South Korea and Thailand. During the current debacle in the US, he's had a close working relationship with Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson. He's an establishment guy, with ties to Clinton advisers like Lawrence Summers and Robert Rubin. His philosophy is no doubt in line with the architects of the $750+ bailout that was recently approved by Congress. He's succinctly encapsulated his working philosophy by saying, “Most consequential choices involve shades of gray, and some fog is often useful in getting things done.” (The Wall Street Journal, Feb. 20, 2007).
On a personal level, it is said that Geithner is avowedly non-partisan, and a registered independent. He's known for his willingness to challenge authority, self-deprecating humor, and vast resources of energy. But he's also reportedly even-keeled and conciliatory. He's likely to maintain his close associations with Bernanke and Summers (who was pegged by Obama to be Chairman of the National Economic Council / Assistant to the President for Economic Policy*). It's evident that Geithner is an advocate of applying a robust activism in order to "save" the markets. Whether that means "business as usual" is yet to be seen, but the scuttlebutt is that Geithner wants even more power to search for solutions in order to avoid another Great Depression.
* Some suspect that Summers was offered this position instead of Treasury Secretary in order to avoid tricky confirmation hearings. Summers is known as an advocate of unfettered "free markets" and deregulation. This article, however, suggests that Geithner has been arguing for more consolidated supervision over the banking and financial industries.
There is also speculation that Lawrence Summers will be groomed to become the next Fed Chairman when Ben Bernanke's term expires in 2010.
Labels: Barack Obama, Economics, Lawrence Summers, Politics, Socialism, The Federal Reserve, Timothy Geithner
posted by Merge Divide at 4:16 PM
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