Editore"s Note
Tilting at Windmills

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November 21, 2008

MEET TIM GEITHNER.... Of the three apparent cabinet moves this afternoon, we know a lot about Hillary Clinton, quite a bit about Bill Richardson, but comparably less about Timothy Geithner. If he's going to be the Secretary of the Treasury in the midst of a historical financial crisis, it's probably worth taking some time to get to know him.

I've read two solid pieces lately on the likely next Treasury Secretary. The first was back in September, when Robert Kuttner wrote a fascinating item on Geithner's background and expertise.

Unlike many senior Treasury and Fed officials, Geithner is not a high roller from a big bank or investment house but a public-minded civil servant. He has neither a doctorate in economics nor an M.B.A. After receiving a master's degree in international economics from Johns Hopkins University, he worked as a research assistant to Henry Kissinger and then joined the Treasury, where he was posted as an assistant attache in Japan. He came to the attention of both Larry Summers and Robert Rubin and quickly moved up the ladder. He was a key player in the containment of the Asian financial crisis of 1997-1998 and later went to the International Monetary Fund as a top official. Despite being a Democrat, he was named president of the New York Fed after two stronger and more conservative candidates withdrew.

Geithner's admirers span the spectrum from Republican financial mogul Pete Peterson to liberal Democrat Barney Frank. One can infer from his broad fan base three possible conclusions: Wall Street is so clubby and politically powerful that permissible policy differences just aren't that great; or maybe Geithner is all things to all people; or perhaps, in a deep crisis, truly talented and effective people can earn broad respect.

Perhaps most importantly, Kuttner noted a speech Geithner delivered to the Economic Club of New York last June, calling for a far-tougher regulatory policy to alter "the level and concentration of risk-taking across the financial system." He got quite specific, saying regulators "need to make it much more difficult for institutions with little capital and little supervision to underwrite mortgages." Reassuringly, Kuttner described the remarks as "a blueprint for fundamental overhaul," which is what's necessary given the need for a new financial architecture.

The other piece was Noam Scheiber's recent article, describing Geithner as "the next Larry Summers," and providing some helpful context to Geithner's professional and ideological background. It's well worth reading.

For what it's worth, investors appeared very pleased with word about Geithner's nomination -- the Dow soared nearly 500 points after MSNBC's report made the rounds.

I'm going to go out on a limb here and say Geithner will not have any confirmation trouble in the Senate.

Steve Benen 4:30 PM Permalink | Trackbacks | Comments (18)

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Comments

Anyone that Barack Obama, Bob Kuttner, and Barney Frank all support, definitely has my vote too.

Posted by: low-tech cyclist on November 21, 2008 at 4:36 PM | PERMALINK

I'm curious what Paul Krugman thinks. His blog is not clear.

Posted by: coral on November 21, 2008 at 4:47 PM | PERMALINK

I hate the Kudlovian urge to attribute every zig of the Dow to whatever news happens to have caught one's eye.

Posted by: Bosch's Poodle on November 21, 2008 at 4:51 PM | PERMALINK

"Unlike many senior Treasury and Fed officials, Geithner is not a high roller from a big bank or investment house but a public-minded civil servant."
-Mr. Benen

A financial Patrick Fitzgerald? Cool.

And thanks for another of your very useful, "Meet the new guy/gal", pieces Steve.

Posted by: burro on November 21, 2008 at 4:53 PM | PERMALINK

I'm curious what Paul Krugman thinks. His blog is not clear. Posted by: coral

Krugman, who had a peripheral role in economic policy during the Clinton administration is, perhaps, keeping his counsel hoping for an appointment himself. However, Nobel Prize notwithstanding, his criticism of Obama during the primary was pretty sharp and his support for Clinton very obvious. So, he needs to keep his day job.

Posted by: Jeff II on November 21, 2008 at 4:55 PM | PERMALINK

I was surprised to hear about his length/breadth of experience, given he's only 47--it apparently dates back at least some 20 years?

Impressive in itself.

The cabinet seems to be shaping up well. Very well.

My only lingering concern thus far is Hillary and Obama--but it's a minor one. I'd like to know what sort of recourse Obama has if he feels Hillary is acting out of line--and will he act on the same?

All un-knowns, so it's leap of faith--but a realitivly small one, IMO>

As I stated in an earlier post, it really seems Obama respects Hillary-and I think she too can't not be impressed by him--he did beat her, after all. And they're both minorities who know what it's like to be up against such sterotype and bigotry.

Admittedly, that "Harriet Tubman" quote she delivered at the DNC--along with the "NO Way, NO how, NO McCain" slogan really sold me.

Maybe I'm just a sucker, but I think it'll work out--maybe even better than we imagine.

Posted by: It sounds pretty awesome on November 21, 2008 at 5:02 PM | PERMALINK

Although Krugman was not positive on Obama, it was Obama policy not personality that he decried. BHO is a bigger man than any previous occupant of the WH, and can move beyond such criticism. Hillary was not exactly positive either, was she ?

I think it would be hard for Paul to have to wear a suit every day, however. He is a Jacket, Tie, Shirt, shorts and sandals guy who would make an excellent ambassador to Bermuda to keep track of the banking houses there :)

Posted by: reboot on November 21, 2008 at 5:03 PM | PERMALINK

...he worked as a research assistant to Henry Kissinger and then joined the Treasury, where he was posted as an assistant attache in Japan. He came to the attention of both Larry Summers and Robert Rubin...

That's reassuring.

Posted by: Brojo on November 21, 2008 at 5:13 PM | PERMALINK

...he worked as a research assistant to Henry Kissinger and then joined the Treasury, where he was posted as an assistant attache in Japan. He came to the attention of both Larry Summers and Robert Rubin... That's reassuring. Posted by: Brojo

The Kissinger part or the Summers and Rubin part?

Posted by: Jeff II on November 21, 2008 at 5:16 PM | PERMALINK

Mmm, smell the neoliberalism. Goldman Sachs alum and Paulson protege.

Smell the Change(TM). Not.

Posted by: SocraticGadfly on November 21, 2008 at 5:20 PM | PERMALINK

It's hard for me to critique anything adequately right now, as I'm frankly still glowing with joy that Obama won. And so far, the choices look damn good for the most part.

After living through Bush and also watching my friends and colleagues all stressed out about their jobs and homes, I'm just feeling grateful now.

Posted by: joanne on November 21, 2008 at 5:21 PM | PERMALINK

REBOOT -- the official winner in the Obama Kool-Aid Guzzling Contest for this week, with this gem:

BHO is a bigger man than any previous occupant of the WH.

I would laugh my ass off, if it weren't for the fact that people actually believe this when we have no way of knowing whether it's true or not, since....

Obama ain't even in the WH yet.

What a maroon.

Posted by: SocraticGadfly on November 21, 2008 at 5:22 PM | PERMALINK

Geithner's got an impressive resume. But while he hasn't spent any time in the private financial sector, he's also no Joseph Stiglitz.

Posted by: Jeff II on November 21, 2008 at 5:35 PM | PERMALINK

Mmm, smell the neoliberalism. Goldman Sachs alum and Paulson protege.

Smell the Change(TM). Not.

The facts...those are not.

Who are you describing there?????

Posted by: gwangung on November 21, 2008 at 5:57 PM | PERMALINK

ah, gadfly......you never cease to disappoint me. always coming up with some little piece of information that supports your "concerned" remarks, but in reality has absolutely nothing to do with the matter at hand.

thanks for the regular daily entertainment.

(flame on)

Posted by: just bill on November 21, 2008 at 7:48 PM | PERMALINK

Goldman Sachs alum and Paulson protege. -- Socratic Gadfly, @ 17:20

Where did you dredge that tidbit from? I've read Steve's piece and re-read it and couldn't find it.

PS While I cannot say whether or not you're a "cattle biting fly, such as horse-fly")I think you flatter yourself with the "Socratic" bit. As far as I can tell, you're be more accurate if you used "Xanthippe" (Xanthippic?) instead.

Posted by: exlibra on November 21, 2008 at 8:11 PM | PERMALINK

Kuttner should be a part of Obama's circle of economic advisers. I'm encocuraged, and somewhat surprised, that he gives Geithner positive reviews.

Posted by: bruce on November 21, 2008 at 9:34 PM | PERMALINK

I agree in part with Socractic Gadfly. We seem to be making positive predictions about Obama's tenure as president, and he isn't even in office yet. People seem to be so in search of a new savior for the economy and the nation in general, that they are predicting outcomes for the Obama administration that only time will be able to foretell. BTW, I voted for Obama, but unlike most people I know, I am not overly-smitten by his candidacy nor his election win. I just want his administration to fix the problems that his predecessors have allowed to happen, especially the economy, the wars, and health care.

Posted by: wowser on November 22, 2008 at 8:50 AM | PERMALINK




 

 

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