Timothy Geithner Should Be Terminated, Is Harming Obama's Agenda
I don't trust Timothy Geithner, U.S. Treasury Secretary. And the longer President Obama stands steadfastly by Mr. Geithner, the less I trust Obama to resolve the massive U.S. financial meltdown. As the old saying goes, "If you lie down with dogs, you will get up with fleas."
Secretary Geithner is:
- an uninspiring and incoherent leader,
- far too close to Wall Street for any measure of objectivity, and
- exudes deliberate intransparency mixed with the unconscious mannerisms of blue-chip arrogance.
At minimum, Timothy Geithner has proven incompetent and naively over his head in dealing with the sharks of Wall Street.
I don't buy that. Geithner is one smart, educated cookie about the ways of Wall Street... which is precisely why Chicago-hardened politician Obama nominated him for Treasury Secretary.
Geithner honed exceptionally deep knowledge and an extraordinary host of close contacts in the banking and corporate world as Under Secretary of the Treasury under President Clinton, as Senior Fellow at the Council on Foreign Relations, as a director at the International Monetary Fund, and until recently, as President of the New York Federal Reserve.
The Obama administration's phony, after-the-fact "We're shocked, SHOCKED!" routine doesn't hold water.
Here's the real political deal: during the '08 campaign, Barack Obama won the Democratic nomination and the presidential election in large part by deftly playing both sides of the street on many issues. It's a time-honored American political tradition. Bill Clinton did it. George Bush often did it. Ronald Reagan was the master of it on social issues.
Two full days after first "hearing" of the AIG bonuses, President Obama today huffed in front of cameras in his best martyred-leader tone of angered surprise.
Fact is, though, that Obama's key economic advisors are unabashed free-market supporters with deep, long roots to Wall Street. And they certainly know that key corporate executives routinely have employment contracts and bonus agreements.
Political Posturing for the Cameras
That Obama is stunned that his economic posse failed to inform him of fat bonuses for their long-time friends, or that Obama himself doesn't understand that this is a commonplace practice, is pure public-relations baloney. Two-faced pretending. Political posturing at its finest.
Reality is that the Obama administration has been caught by the public and press attempting to play both sides of the political street: the Main Street side, and the Wall Street side. And the picture is neither pretty nor popular.
Secretary Geithner needs to go. Logically:
- Geithner suspected or privately knew of the existence of the compensation contracts,
- wanted to make nice with Wall Street movers who could help the administration, so tacitly turned his back, and
- avoided dealing with the AIG contracts until he was forced to by press and Congressional leaks.
- Thus, today Obama belatedly spouted a populist "Main Street" message about AIG to the waiting press cameras.
Secretary Geithner and the AIG bonuses may be mere symbols of larger problems. But symbols are important, particularly in politics. Symbols matter.
To be fully honest, everytime I look at Secretary Geithner, I can't help but remember that he blatantly, willfully cheated on his income taxes. Repeatedly, over several years and on several different, significant items.
As someone who worked for 20 years as a CPA/auditor, I assure you that Mr. Geithner's protestations of innocence on his tax deficiencies are nonsensical. I have no doubt that Mr. Geithner, a highly educated financial professional, gamed the system, and got away with it until caught red-handed during the vetting process.
Political Tone-Deafness by Obama
That President Obama continues to stand by Secretary Geithner displays political tone deafness on Obama's part, as well as characteristic over-confidence in his abilities to personally charm and distract the public from the burning issue at hand.
Several years ago, I wrote about Barack Obama, "Although armed with shrewd political sensibilities, he's sometimes slow to recognize viable threats to his agenda." (See Profile of President Barack Obama.)
That's precisely what Obama is doing again, this time in relation to Timothy Geithner: failing to realize the intensity of this poisonous threat to Obama's larger agenda.
Put simply, Timothy Geithner is apparently not trustworthy . And judging by recent events, he's not competent, either.
Obama MUST terminate Geithner's tenure as Treasury Secretary. The sooner, the better.
I'm hardly alone in this sentiment. Take a gander at a few of the comments from Washington Post's The Plum Line blog:
- From Liz - "... I am furious that President Obama keeps hiring more mis-managers from Goldman Sachs and Citigroup. He is placing the foxes in the hen house under the theory that these foxes will know how to 'fix' the economy.
" I have a hard time seeing them serving the needs of the taxpayers over the needs of their former masters at Goldman Sachs. I hate that all of these insiders have the authority to hand over huge sums of taxpayer dollars to Wall Street."
- From Mike - "I don’t think the problem is that Geithner is 'incompetent'-it’s that he and Summers are obviously on the side of their Wall Street friends and loath to do anything that upsets their applecart.
"As was pointed out, if Geithner could demand that the automakers change their contracts with the unions, there is no reason on earth that he couldn’t have used the same heavy-handed technique with AIG–the fact is, he didn’t want to."
- From sgwhiteinfla - "If Geitner continues to be painted as incompetent by the media and President Obama keeps standing beside him it had better rain gold in the next year or so or none of the rest of President Obama’s agenda will get passed and that includes his budget and all of his initiatives on green energy, health care reform, and education."
- From Tena - "Obama gets blamed because we just backed up another truckload of money to AIG to the tune of 30 billion last month and he could have attached conditions to the money that the bonuses not be paid. The problem really and truly is that they underestimated the public’s reaction to this.
"What they should have done is come out and bashed AIG... instead of coming out on Sunday saying there was nothing they could do to break the contracts. That for d@mn sure wasn’t the sentiment when they were dealing with the Big 3 and their labor contracts so why should AIG be any different?"
- From sgwhiteinfla - "You can say that President Obama didn’t know until recently about the bonuses but the fact that the contracts were entered into last year would mean one of two things, either President Obama and his team are incompetent and never asked, or at least somebody in his cabinet DID know.
"It doesn’t help that Geitner recently said that the administration knew where every cent from AIG was going... "
Comments
Deborah, I think you are on to something. This last few days has taken a toll on my obamathusiasm.
It started about a week ago when I did my homework about Charles Freeman. Having been tied up with paying bills and rearing a family for the last two or three decades I have had to skip over all but the most superficial issues. I never heard of Freeman, but the more I read about him the better I liked him. When Greg Djerejian (Belgravia Dispatch) came out of hibernation to defend Freeman I realized that (once again) a good appointee – in this case, chair of the NSC – had been put nominated and shot down. Badly. And without any defense from Barack Obama.
I am realizing as the weeks go by that Barack Obama is a politician first and man of principle second. This doesn’t mean I don’t like his principles. It only means I’m seeing him more and more as a poker player at the opening of a game who is being very careful, maybe too careful, with his chips (political capital).
Early on he was quick to say “I screwed up” when the Daschle tax problem (among several, it seems) hit the fan. By doing so he was able to make lemonade out of a bad situation, boosting his image, standing up for his team and protecting everyone’s credibility at the same time. I realize that’s a card that can’t be played politically but once or twice, but it shows character. Yesterday, in a sense, he did the same kind of thing with Geithner, this time spending a little political capital to save someone. When it happened, I felt a pang of regret that he hadn’t done the same for Charles Freeman. And I have no axe to grind. After reading about Freeman, being swept away by the scope and depth of his diplomatic vision and experience it is as though someone as iconic as Schlesinger or Brzezinski had been tossed overboard.
This weeks’ focus on executive bonuses strikes me as dangerous as driving while talking on a cell-phone. We probably won’t crash, but the controversy is terribly unimportant other than as an opportunity for politicians on all sides to do a little populist hotdogging. Obama himself couldn’t resist. In the scale of things, the amounts in question are like dust on a balance scale. (Great image, don’t you think? Abagail Adams used it in a letter to her husband. I’m just starting McCullough’s bio of Adams.) As I heard this morning, “trillion” has become the new “billion.” News and commentary about global finances since last September have made us drunk with zeroes. What we thought was an economic universe we understood turns out to be a speck in a really big galaxy most of us never thought about. When I think of the IAG bonuses as the trivial distractions they really are I am reminded of arguing with myself over whether to give a dollar to a wino. Ten minutes later it makes no difference at all, unless he runs into traffic in his excitement and gets run over by a truck.
So back to Geithner, principles and all that. When I back away from the economy and try to put the US into the global picture, I realize how very badly we have screwed up.
Most lay people (myself included until recently) think of America on the world stage as the Last of the Superpowers, First among Equals, Leader of the Free World, and (most importantly) the economic engine that runs the world economy. To some degree all of the above is true, but when compared in economic terms, we may not be as smart as we imagine.
It is true that America is the richest place on earth, that our economy is so influential that when Wall Street catches cold the whole world sneezes, that it is US currency, not local legal tenders, that will always be accepted all over the world. Even in isolated places like the mountains of Brazil or behind enemy boundaries, no one turns down a Ben Franklin. And by now everyone knows it is China’s investment in US Treasury notes, together with petro-dollars from the Middle East, that are keeping our economy afloat. Both, as well as global ties from everywhere else, have ulterior motives (US as export market, customer for oil, source of venture capital, whatever).
But the US, unlike most of the world, has been living on credit for some time now. Our culture is not like that of China where ninety percent of cars are bought for cash and loans that we would call mortgages typically have fifty percent “down.” Most of the world is, compared with the US, on a cash economy. In fact, until recently most of the world was on a cash economy. Savings rates worldwide have reflected this for years. India, I heard, is somewhat protected from the current financial meltdown because their banks (nationally run, incidentally) didn’t get involved with exotic “securities” that turned out to be fool’s gold.
Which brings us back again to Geithner. Whether or not he is competent or trustworthy is important. But from from a global perspective it’s not relevant. Obama (and by extension all of us) is in the unfortunate position of having to choose among SOB’s Under the circumstances we must choose the least among very few disagreeable options, all of which balance on the too-late-to-change fact that as a population we have not saved enough to get us through a very rainy day and are trying to piss out way out of a crisis by using credit. And credit is the very poison which has led us to where we are.
Geithner may be an SOB but to use a tired line, he’s OUR SOB.
I hate it. I wish it were not so. And I have to admit I’m starting to feel the same way about the president.
Timmy Geithner a former Treasury Secretary in a few short weeks. Warren Buffet or Paul Voelker to replace him. The teleprompter president can’t afford the bad PR.
This really makes sense.. lets get rid of him while there is such a huge economic mess in our country and the world… That’s just what we need.. no treasury secretary. We are just now starting to see some effects of the Recovery act starting to work, the banking plan is just getting going and hopefully we will see results of it soon, and you want to dump the guy…
Hey I have an idea… lets do another election and vote out Pres. Obama at the the same time.. or better yet.. just impeach him and start over… wouldn’t that be beter..
Geeze people.. give it a rest…
You should read your history books… This is exactly the same things that FDR went through in his early years… I feel bad for Pres. Obama.. it’s bad enough he has to deal with the darn Republicans throwing everything under the sun at him, now he has his so called supporters doing the same thing…
Thanks guys…