Deborah Solomon and Michael Phillips have a great article in Saturday’s WSJ about the Tim Geithner vs. Larry Summers Treasury Secretary bakeoff. They say Obama’s advisers are split between the two. And they offer lots of color about the long and friendly relationship between the rivals. They met when Summers arrived at Treasury in 1993 as undersecretary for international affairs and Geithner was assigned to be his special personal assistant. With Summers’ help, Geithner quickly began rising through the Treasury ranks:
Mr. Summers structured Treasury policy meetings as lively debates. But he had little time for those whose views reflected received wisdom instead of original thought. On occasion, his harshness made staffers reluctant to disagree with him. Not Mr. Geithner.
“Larry trusted Tim to punch holes in his logic when he needed holes punched,” says a former Clinton Treasury official. During the current crisis, Mr. Geithner has often consulted with Mr. Summers.
At a party thrown when Mr. Geithner was promoted to undersecretary in 1999, Mr. Rubin told the gathered staff that what impressed him most was Mr. Geithner’s ability to say no to Mr. Summers.
It sounds like they work awfully well together. The optimal solution might be to have both of them involved in the new administration’s economic and financial policymaking. Which is what you’d get, more or less, if Summers were appointed to the Treasury job and Geithner stayed at the New York Fed.