Tim Geithner, the president of the New York Federal Reserve Bank, is the next United States Treasury Secretary. That job is suddenly more important than all the other cabinet positions, because the economy is cratering. Is he a good pick, because he's knowledgeable and not a banker and will think big? Or is he a terrible pick because he's a Rubinite and killed Lehman and the whole recession is all his fault? No one knows but many will speculate wildly. A number of Wall Street types—speaking to Times DealBook columnist Andrew Ross Sorkin on the condition of anonymity because the recession is actually their fault—say Geithner is baaaaad. Banking industry experts agree!
“We have only two things to say about Tim Geithner, who we do not know: A.I.G. and Lehman Brothers,” said Christopher Whalen of Institutional Risk Analytics. “Throw in the Bear Stearns/Maiden Lane fiasco for good measure,” he said. “All of these ‘rescues’ are a disaster for the taxpayer, for the financial markets and also for the Federal Reserve System as an organization. Geithner, in our view, deserves retirement, not promotion.”
Well yes it but seems like Hank Paulsen was the one who invented some reason for being either unwilling or unable to "rescue" Lehman (or both? he seems to have switched from "we let them fail on purpose" to "we couldn't have saved them" because he's a bad, bad Treasury Secretary). In fact it seems like the New York Fed Position is one of limited powers! What's more worrying is that Geithner is another damned Rubinite, trained by evil Robert Rubin. But American Prospect co-editor Robert Kuttner, no fan of Rubin, is cautiously optimistic about the many Rubinites who'll soon be in charge of the money.
In fairness, adults are not merely tools of their patrons. In recent months, Larry Summers has disagreed with Rubin on the scale of the needed stimulus. Tim Geithner is for far more regulation than Rubin. Jason Furman, though suggested by Rubin for his campaign post of economic policy director, actually spent more of his career working for Joseph Stiglitz than for Robert Rubin. Peter Orszag has done a fine job as director of the Congressional Budget Office, and is not averse to large scale public spending.
He, too, would also like to maybe see a Joseph Stiglitz in the White House, but as we all know, the cratering ecnomy has turned even the moderates into crazy radical New Dealers. And Berkeley Economist/blogger Brad DeLong seems pleased with this Christina D. Romer appointment, as she is an expert on Great Depressions and how to not have more of them. Of course basically no one knows what is going on, except that January 20 can't come soon enough.