Timothy Geithner may take the second half of the summer off.
Bloomberg is reporting that the Treasury Secretary is considering leaving his post after the debt ceiling debate is resolved. The deadline for that is August 2nd. After that, the government can’t pay its bills. That puts Geithner out the door sometime in the next few weeks. The striking thing about that the news is how many economic advisors have fled or left the Obama administration recently. Geithner like the others is citing personal reasons. His son wants to finish high school in New York. But you have to credit the weak economic condition for some of this, and Obama’s inability to do more to lower the unemployment rate. Bloomberg says Geithner’s exit would leave two top economic positions open. But it will really be three. The head of the Council of Economic Advisors, which is being vacated by Austin Goolsbee, the Treasury Secretary job and the head of the Consumer Financial Protection Agency.
(LIST: Barack Obama’s First 100 Days)
Geithner had a rocky start as the Treasury Secretary. He pushed for a program that allowed the government to work with private partnerships to buy up troubled assets. The programs got poor reception initially and never really amounted to much. The administration’s foreclosure mitigation plans also turned out to be mostly a bust. Then there was the bombshell of the AIG bonuses, which even if they weren’t Geither’s fault, his double talk on the matter made him look really bad.
But as financial crisis wore on, Geithner did seem to do a better job of managing things. Geithner’s even-tempered approach, much like Obama, seemed to pay off. And he was able to help push through a massive financial reform bill that while not perfect should be an improvement on what we have. Also, he probably was heavily involved in last year’s tax deal, which seems to have somewhat helped the economy. The auto bailout, at least in terms of jobs saved, did seem to work out. And TARP has mostly worked out. Geithner managed the exit from most of the big banks reasonably well. He probably should have pushed for more lending, and more restrictions on pay, but the government has not taken the hit on TARP that many thought it would. I don’t know if he has done an inspired job, but he clearly wasn’t as big a disaster as he originally looked he would be.
In my opinion, the problem the Obama administration has had from the beginning was that they didn’t push for a bigger stimulus. And that they couldn’t make the cause since then to do more. Don’t know if that is Geithner’s fault, though.
So who could replace Geithner? Gene Sperling, who is now the head of the National Economic Council is well positioned to take the job. He spent much of the first two and a half years of the administration as a special adviser in the Treasury Department. So he knows the job and knows the Obama administration well. Gary Gensler over at the Commodities Futures Trading Commission seems to be angling for a bigger job. And his former life on Wall Street might give confidence to the market. But the fact that he comes from Goldman might look bad. And it’s really not the confidence of the market that Obama lacks. It’s the confidence of Main Street. Another way to go would be for someone from the private sector. But so far Obama’s job czar CEO Jeffrey Immelt doesn’t seem to have come up with anything inspired so I’m not sure Obama’s experience with private sector appointees has been that good.