Tim Geithner: The New Man at Treasury
A brief profile of Tim Geithner published last year at New York Times:
“If the brave new world of finance is daunting, the man in charge of it is not. With a boyish charm and a dry sense of humor, Mr. Geithner has taken advantage of the current calm waters of the financial markets to take an active stance, rallying Wall Street to peel apart the market of credit derivatives to try to understand its potential risks. As a financial regulator, his style is more like a cerebral Dr. Phil than an Eliot Spitzer, the former attorney general and now [former] governor of New York, who reveled in showdowns with Wall Street.
Of course, Federal Reserve bank chiefs are typically less confrontational, charged with stability, as well as being a critical part of setting monetary policy. But he has been unusually productive in tackling issues widely viewed as uncomfortably complex.
‘Tim loves projects, and he wraps his projects in packages that everyone wants to be part of,’ said Annette L. Nazareth, a Securities and Exchange commissioner who has known Mr. Geithner since he worked at the Treasury Department.
As Mr. Rubin put it: ‘He’s elbow-less. It’s really remarkable.’”
The leak that Mr. Geithner would be appointed by Mr. Obama as the new Treasury Secretary caused the DOW to jump almost 500 points. This was a significant vote of confidence for the President of the Federal Reserve Bank of New York. He has been working on some of the sub-prime issues already, and has a good grasp of this area of investing that lies beneath so many of our current economic problems. We cannot know what his tenure at Treasury will produce, but it looks as if the economic team Mr. Obama is putting together is showing competence at a high level. I am encouraged by the quality of his choices, so far.
Feb 13, 2009. For an update on the job of Mr. Geithner, follow this link:Here
March 9, 2009. Update on Mr. Geithner’s plans for G-20, from NY Times.
“Administration officials say they are postponing their plan to produce a detailed road map for overhauling the nation’s financial regulatory system by April, in time for the Group of 20 meeting in London. Though officials say they will still develop basic principles in time for the meeting, the plan will not include much detail.
Treasury officials are also still scrambling to decide details of their plan to buy up as much as $1 trillion in toxic assets from the nation’s banks, one month after being widely criticized for presenting a plan that lacked any specifics on how it would work.”
This report raises my fears that Mr. Obama will not be completely prepared to take full advantage of the progress that could be made at the G-20 meeting. On the issue of bank regulation, alone, much work must be done by the Treasury Department before the meeting. China, Great Britain, Germany and Japan, just to name a few, will all have their plans ready for discussion.
There are many other issues, such as coordination of stimulus spending between major producers, IMF membership and IMF funding that are vital to having a good meeting. Preparation time is necessary to be fully informed before the meeting begins.
Ultimately, April is probably a little early for Mr. Obama to have a complete agenda worked out. He has been occupied, as has Treasury, with a collapsing economy and getting his budget through Congress. A June or July date would probably have been better, but the meeting date was set in December, so Mr. Obama had no input on the schedule. Also, since there is an urgency about the meeting, with the global economy on the brink of disaster, so an earlier meeting was needed.
Mr. Geithner has been criticized for not moving faster in filling important posts at Treasury, but the Administration is moving slowly with strong vetting of the tax histories of each prospect for a position. Early stumbles on this issue have cost him valuable time in getting into high gear.
March 19, 2009 Update: NY Times article on the A.I.G. bonus outrage and its effects on Mr. Geithner’s credibility: NY Times Article here
Mr. Geithner is in for some tough times, as he is under fire for not being more on top of the A.I.G. bonus situation. The President had to contradict him and direct him to find a way to get the bonuses back. Criticisms are coming fast and from all corners. It is one week away from the London G-20 meeting, and Mr. Geithner goes to the meeting in a weakened condition.
