In Geithner We Trust - Democratic Underground

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Thu Mar-19-09 09:58 AM
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In Geithner We Trust

http://www.mydd.com/story/2009/3/19/31440/2976#readmore

In Geithner We Trust

by Charles Lemos, Thu Mar 19, 2009 at 03:14:40 AM EST

Alright, alright, perhaps not we, maybe just me after reading a number of posts on this blog and other blogs savaging our young Secretary of the Treasury. And maybe not trust either, for I can't say I fully understand the inaction on certain fronts but certainly I think it fair to extend the Secretary and the President the benefit of the doubt and the gift of time.

As the New York Times finds Secretary Geithner is "shouldering more crises on his slight frame than most Treasury secretaries ever have." And I think it relevant to note that he is doing so without the usual complement of Treasury assistants because of Administration delays in vetting potential nominees and due to candidates who have withdrawn. In short, Mr. Geithner is not just the quarterback right now but the wide receiver, the running back and the offensive line doing the blocking and tackling.

Let's also be cognizant of the task at hand and difficulty of the moment. As the President noted in his defense of the Secretary on the White House lawn before setting out for California, "there has never been a secretary of the treasury, except maybe Alexander Hamilton, right after the Revolutionary War, who's had to deal with the multiplicity of issues that Secretary Geithner is having to deal with -- all at the same time." President Obama added that "Nobody is working harder than this guy. He is making all the right moves in terms of playing a bad hand."

But beyond this if Geithner is axed now what does that say about the President's decision making? Eamon Javers over at Politico is right to point out that any move to replace Geithner now could be viewed by the markets as a sign of panic.

It would open up Obama to charges that he bungled one of his first significant personnel picks, as Geithner was chosen about three weeks after Obama was elected. And it would only exacerbate the situation at Treasury, where many top jobs remain unfilled and several top appointees backed out in recent weeks over issues that arose during their vetting.

We have had a vacuum at the Treasury Department for most of the Bush years. Hank Paulson, the last of Bush's Secretaries, was the only one with any muscle and we are correcting 30 years of mistakes. To expect a turnaround in less than 3 months is unreasonable. Furthermore, where are these attacks coming from? Mostly from the right but also from the left. The ones from the right such Connie Mack's assertion that "quite simply, the Timothy Geithner experience has been a disaster" is easily dismissed. After all who are the Republicans to preach about disasters. But the ones from the center and the left are a different order, these center over policy disagreements and mostly on the issue of the nationalization of the banks. To call for a resignation over a policy dispute before the policy is even fully articulated seems a little sanctimonious and a dangerous precedent to set.

Replacing Tim Geithner now also would seriously undermine the Obama economic agenda just as it is getting pitched to Congress and the nation. No doubt that there many progressive economists who differ with the Secretary over how to handle the banks and their NPLs but at the same time no major banks have failed as yet and the Secretary has pushed hard for the banks to aggressively write down their toxic securities in advance of the stress test.

The Secretary and the President deserve the benefit of the doubt and the gift of time. Secretary Geithner deserves time to prove indeed that he is the boy wonder. As he stated to Charlie Rose in an interview last week, "we start{ed} with a mess, a deep mess, made worse by the deepening recession and these things are pitting on themselves. And it's very important for people to understand, it's going to take some time to work through this. But what I want people to know is that we're going to do what's necessary to get through it. And these things will get traction. They will start to help unfreeze things, and they will help lay the foundation for recovery."