22 November, 2008

Obama Does Cabinetry

And he seems to be a pretty damned good carpenter, despite some of the wailing and gnashing of teeth from some folks on the left who think "change" means "don't choose anyone who knows how Washington works." I'm one of those who think that change can only come to an institution such as Washington when you know it well enough to manipulate it.

Hillary Clinton's our next SOS, if she ever gets through playing coy and makes up her mind. Bill Richardson's being eyeballed to head Commerce, and then there's this guy nearly nobody's heard of:

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.


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.

The market bounced back after Geithner's announcement despite the fact he's gone all regulatory on their ass. That could be a sign they trust him to clean up their mess.

I hope Obama's bought him a very large broom.

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