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Earlier this month, we argued that it was time for Treasury Secretary Tim Geithner to go.
Our logic was simple:
We still think Geithner should go. And judging by yesterday's startling Get-Tough-On-Banks press conference, it seems Obama is coming to the same conclusion.
Recall the opening words of Obama's short speech:
Good morning, everybody. I just had a very productive meeting with two members of my Economic Recovery Advisory Board: Paul Volcker, who is the former chair of the Federal Reserve Board, and Bill Donaldson, previously the head of the SEC. And I deeply appreciate the counsel of these two leaders and the board, that they’ve offered as we have dealt with a broad array of very difficult economic challenges.
Note the immediate shout-out to Paul Volcker and Bill Donaldson. Note the glaring omission of Tim Geithner and Larry Summers. Note that he didn't say "meetings with my economic team" (because surely this new policy wasn't hatched in one meeting with Volcker and Donaldson).
What Obama was telling America was "I just had a meeting with two new advisors, and, based on what they said, I'm launching a new policy."
Note, too, that the new get-tough-on-Wall Street policy is explicitly called, "The Volcker Rule." (That in itself is shocking. Volcker is just an advisor. Tim Geithner is Obama's Treasury Secretary.)
Tim Geithner was at the press conference, way down the line -- but, by some accounts, he spent most of it staring at his shoes. He is also said to disagree with the new policy (we have problems with it, too).
At the very least, yesterday's press conference seemed designed to tell America that Tim Geithner has been marginalized, that Obama is now (finally) committed to change. More likely, it was a prelude to Geithner formally being shown the door.
Our logic was simple:
- Geithner's save-Wall Street-at-any-cost policy has failed (the banks aren't lending), and it is distorting fairness and competition throughout the economy
- Geithner's role in the AIG bailout and cover-up continues to undermine confidence in the current administration (and makes it impossible for the current administration to blame AIG on the last administration)
- Geithner's "too big to fail" bailout policy has led directly to today's Wall Street bonus fiasco: There's no "bonus problem" at Lehman or Wamu.
- Geithner's insistence on always putting Wall Street first has contributed to the populist rage that is now sweeping the nation and bludgeoning Obama in the polls.
We still think Geithner should go. And judging by yesterday's startling Get-Tough-On-Banks press conference, it seems Obama is coming to the same conclusion.
Recall the opening words of Obama's short speech:
Good morning, everybody. I just had a very productive meeting with two members of my Economic Recovery Advisory Board: Paul Volcker, who is the former chair of the Federal Reserve Board, and Bill Donaldson, previously the head of the SEC. And I deeply appreciate the counsel of these two leaders and the board, that they’ve offered as we have dealt with a broad array of very difficult economic challenges.
Note the immediate shout-out to Paul Volcker and Bill Donaldson. Note the glaring omission of Tim Geithner and Larry Summers. Note that he didn't say "meetings with my economic team" (because surely this new policy wasn't hatched in one meeting with Volcker and Donaldson).
What Obama was telling America was "I just had a meeting with two new advisors, and, based on what they said, I'm launching a new policy."
Note, too, that the new get-tough-on-Wall Street policy is explicitly called, "The Volcker Rule." (That in itself is shocking. Volcker is just an advisor. Tim Geithner is Obama's Treasury Secretary.)
Tim Geithner was at the press conference, way down the line -- but, by some accounts, he spent most of it staring at his shoes. He is also said to disagree with the new policy (we have problems with it, too).
At the very least, yesterday's press conference seemed designed to tell America that Tim Geithner has been marginalized, that Obama is now (finally) committed to change. More likely, it was a prelude to Geithner formally being shown the door.
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