Wanted: Economic Savior

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.)

Almost as unlikely are the figures who would provoke a confirmation fight that would be at once almost certainly unwinnable and have precious little political upside. So strike Summers immediately along with Gensler, whose Paul-to-­Damascus conversion from ultradove to ultrahawk on the question of securities regulation is commendable in principle but has left him with enemies on both sides of the aisle. Then cut those who would never take the job (Mayor Mike working for anyone but himself? Please.) and those already inside the administration whose shift would create more problems than they would solve (Daley). And then cut anyone whose career has been mainly in academia (Tyson) or government (Lew), not because they are objectionable per se, but because they would fail to advance Obama’s larger cause.

And what is that, exactly? It strikes me as being twofold, and the folds are tightly entwined: to appoint someone who, substantively and symbolically, (a) puts the matter of job creation front and center on the administration’s economic agenda, and (b) reassures the business community that Obama feels its pain.

The first point is, it seems to me, so obvious as to be beyond arguing. The second will provoke a degree of contention, almost exclusively among those on the left who maintain that the corporate world’s complaints about Obama are entirely unfounded and amount to nothing but self-serving whining. There is some truth to that, no doubt, but only some. (The business gripe about over- and irrational regulation, for example, is one that even many Obama officials believe is justified.) More germane, soothing relations with business has been one of Obama’s main priorities since the midterm shellacking, and there are few better or more dramatic ways for Obama to achieve that goal than with his choice of a new Treasury secretary.

Only two names on the current short lists would therefore fit the bill: Immelt and Sandberg. (There are, to be sure, more than this pair of fish in the sea, but for the purposes of illustration, let’s stick with just them.) Immelt is by a long shot a more familiar—even iconic in some circles, albeit less so than his predecessor, Jack Welch—figure. But as Obama learned when he named Immelt to head up his White House jobs council, only to have it marred by the discovery that G.E., despite its $5.1 billion in domestic profits last year, was essentially a U.S. tax-free zone, Immelt brings his share of baggage.

Quite the opposite is true of Sandberg. Though her public profile is nothing like as high as Immelt’s, that is changing quickly; to wit, see Ken Auletta’s lengthy profile of her in a recent New Yorker. In Silicon Valley, where she worked first for Google, helping transform the company into a behemoth, and where she is now in the process of pulling off the same trick at Mark Zuckerberg’s company, Sandberg is a bona fide superstar. Her ample brainpower is nearly matched by her leadership skills, managerial savvy, and winning personality. Oh, and she also happens to have served previously under Summers as Treasury’s chief of staff, so she knows the building and the policies it implements inside out.

For Obama, a large part of the choice between Immelt and Sandberg—or others cut from the same bolts of cloth—will boil down to precisely what sort of economic message he wants to send. They represent very different business traditions: manufacturing versus high tech, old economy versus new. There are reasonable arguments to be made for either point of emphasis. But both would be a marked departure from Geithner and far more in line with the direction in which the administration needs to go—and needs to be seen as going. And both are already are rich as Croesus and could afford the pay cut. Either or both may not, in the end, possess the requisite tolerance for being turned into a piñata. But there’s only one way to find that out: You have to ask.

E-mail: jheilemann@gmail.com.

Wanted: Economic Savior