Guess its time to get off the dime and start a Geithner thread. Or a Geithner/Summers thread. Or is it an Obama thread?
Whatever. The point is: imagine for a moment that overwhelming sense of relief and burst of national economic confidence that would result if we woke up to find that Treasury Secretary Tim Geithner and National Economic Council Director Larry Summers had resigned, and that Presidential Economic Advisory Chair Paul Volcker was taking over at Treasury?
Interestingly, Obama is finding a way to unite Ds and Rs after all – in frustration with his economic team. Of course, what’s really happening is hardly unity; Dems and Repubs are now in a race of populist-esque rhetoric to get to the political-moral high ground on the matter. The result, in the immediate term, has yielded policy dividends, such as the creative, almost-100% tax on the dreaded AIG benefits that’s passing quickly through Congress (and that Obama has suggested he’ll sign, putting him in direct opposition to the previous efforts of Geithner and Summers to insure Wall Street bonuses were left untouched in the economic stimulus bill).
But of course, the R-D conflict and the surprising emergence of Congress as a warp-speed lawmaking entity has come in no small part as a result of the vacuum in economic leadership that has come to a head in the White House.
Geithner was supposed to be a Larry Summers that people could work with (while Summers himself has a position of equal significance, but one where he doesn’t have to deal with people as much), but the mixed signals sent from him, Obama, and various “inside sources” has led to a damning chorus of “who’s in charge” directed at the new administration – and not simply from the folks thought of as “the left” or “the right.” The result is a sense that nothing was really gained by getting Tim instead of Larry – the two of which are becoming an intellectually marginalized tweedledee and tweedledum. The two, rather than representing “change,” seem to be mired in a desire not to play economic managers, but to try and play financial sector good-ole-boys while still expecting the economic recovery to be a relatively casual affair.
Here’s a rapid fire list of some of the high-profile particulars against Geithner (and Summers): either he’s bullshitting about when he knew about the AIG bonuses, or he has a serious memory problem (ha), their uncoordinated, inadequate plan to deal with the banks, a pronounced resistance to transparency, and of course, the naked sleaziness of blaming embattled Chris Dodd for pulling bonus restrictions out of the stimulus legislation before finally acknowledge it was at his own urging, etc.
It was hard to understand Obama’s committment to institutional throwbacks Geithner and Summers – especially in light of the plethora of good advisers he has otherwise been surrounded by (many with significantly superior reputations, such as Volcker). Obama is not an economist, so one wonders if his committment to this twosome is as much about personal connections as it is about policy.
Whatever the case, we’ve entered untrodden political ground as the AIG news seems to have caused the electorate to pop. Obama does himself no favors by dismissing the affair as a “distraction.” Its hard to imagine things improving quickly with Tim and Larry at the helm, and Obama’s emotionally validating speeches delivered without a clear reflection in actual policy have begun sounding hollow in absolutely record speed for a new President.
If he doesn’t make some tangible moves to take control of the conversation (and the situation) soon, the price to pay will be high – and the cost in his reduced clout on the Hill and in the polls will likely be progress on upcoming priorities such as health care.