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.