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Wanted: Economic Savior

The Tim Geithner era is almost over. And his replacement may be the most important appointment Obama ever makes.


Illustration by Roberto Parada  

"You couldn’t pay me enough to do that job” is a refrain often voiced by ordinary folks with respect to the presidency, and at least for those both sane and sober, the sentiment goes double for Barack Obama’s. But after watching over these past few weeks the appalling clown/horror show that has played out around the raising of the federal government’s debt ceiling, I can’t help thinking there’s another pair of shoes in Washington that no amount of money would be sufficient to induce a non-lunatic to fill: the tasseled loafers of Timothy F. Geithner.

Since the start of the year, the Treasury secretary has been publicly warning that allowing the nation to default on its debts would have “catastrophic economic consequences” and frantically shuffling money around to extend the deadline on a deal to raise the ceiling until as late as possible—while at the same time privately exuding serene confidence that the adults in the Republican Party would never be remotely reckless enough to risk abject calamity. Yet not only has the GOP proved to be just that, but many of its members have spent weeks loudly accusing Geithner of wildly exaggerating the threat posed by default, decrying his deadlines as a hoax, even calling him an outright liar. On the left, meanwhile, the castigation of Geithner continues unabated; where once he was attacked as a shill for Wall Street, now he is vilified as the prime mover behind Obama’s supposedly deplorable fixation on deficit reduction.

Depending on your view of the merits of these broadsides, the recent news that Geithner may soon be throwing in the towel will have evoked either a sigh of relief, a shrug of resignation, or a sense of amazement that the guy managed to hang in there this long. For Obama, however, Geithner’s possible exit before 2012 is both a big fat headache and a whopping opportunity—for whomever he picks as Geithner’s replacement is likely to provoke a hairy confirmation fight but also send a powerful message about his economic vision for a putative second term.

That Geithner might be skipping town shortly took much of the capital crowd by surprise. For all the hell that he has taken from both ends of the ideological spectrum, Geithner’s reputation among those closer to the center has risen steadily during his tenure. (A June profile in the Washington Post was headlined “Geithner Finds His Footing.”) A career public servant perpetually amused by the misapprehension that he hails from Wall Street, specifically from Goldman Sachs, he has never seemed to care much about money (and God knows plenty will be waiting for him whenever he leaves). No doubt he quails at the prospect of creating a hassle for the man in the big chair.

Geithner, for his part, has refused to confirm that he has taken up residence in the departure lounge, saying that he is “going to be commuting for a while”—to D.C. from New York, where his son will enter his final year of high school this fall—“but I’m going to be doing this for the foreseeable future.” Which only suggests that the secretary suffers from sporadic myopia, since multiple administration sources have confirmed to multiple reporters (including this one) that Geithner has told Obama the contrary, and that the likeliest timing for his clearing out his office will be shortly after the debt-ceiling negotiations are completed (assuming that day comes!).

So who might take Geithner’s place? Speculation abounds. For those with a parochial rooting interest, the names of three prominent Gothamites pop up on most short lists: Mayor Michael Bloomberg, JPMorgan Chase CEO Jamie Dimon, and private-equity big shot and former deputy Treasury secretary Roger Altman. Among Beltway players, White House chief of staff Bill Daley, OMB chief Jack Lew, outgoing FDIC head Sheila Bair, and CFTC chairman Gary Gensler are regularly mentioned by the Great Mentioner, as are far-scattered Clintonistas Erskine Bowles, Laura Tyson, and Larry Summers (who, of course, also qualifies as an Obaman). And, finally, there are the straight-up businesspeople, of whom the most frequently cited are G.E. CEO Jeff Immelt and Facebook COO Sheryl Sandberg.

Lists like this are always good sport, and there’s no begrudging the efforts of administration officials to float certain names not because they ever would be seriously considered but simply for the purposes of massaging egos that need stroking. But it requires only the limpest grasp of the political imperatives facing Obama to realize that a fair number of the people above stand zero chance of being picked.

At the very top of that list are Dimon and Altman, both of whom, whatever their virtues, and they have many, are bone-deep Wall Street creatures—and while the toxicity of the post-crash financial sector may have lessened an itty bit, what remains is so strong that naming anyone from that world would be tantamount, in terms of public perception, to naming Bernie Madoff. (When it comes to Dimon, the selection is doubly unlikely, in that he has soured on Obama and is said to be searching for a Republican presidential candidate—maybe Jon Huntsman—to back in 2012.)


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