Timothy Geithner: Obama’s very convenient fall guy
While the Treasury Secretary gets pelted with mouldy cabbages, especially by Paul Krugman, the President charms the nation
Since America is in its worst economic mess in 70 years and since President Obama's designated Mr Fixit is Treasury Secretary Tim Geithner, you'd think the Obama presidency would be in desperate shape. So why isn't it?
Mr Fixit is surely the most derided man running the US Treasury since Andrew Mellon cut spending and raised taxes amid the onset of the Great Depression in 1932, prompting the derisive ditty:
Hoover blew the whistle,
Mellon rang the bell,
Wall Street gave the signal,
And the country went to hell!
Even the bounce on Wall Street after the launch of Geithner's most recent effort to bail out the banks didn't stem the chorus of abuse. "Quite simply, the Timothy Geithner experience has been a disaster," proclaims a senior US senator, Connie Mack of Forida. "The Treasury Department is in disarray."
Nobel laureat Paul Krugman said the bail-out fills him with a sense of despair
Granted, Mack is a Republican, but Democrats can't muster much enthusiasm for their man. Michael Capuano, Democratic representative for Massachusetts, told ABC News: "At the moment, yeah. I mean, I have questions like anybody else, but let's be serious. He's still new on the job." Fifty economists surveyed by the Wall Street Journal gave Geithner a rating of 51 out of 100.
Most stentorian in his denunciations is Paul Krugman, a Princeton economics professor and winner of last year's Nobel prize for economics. Week after week from his pulpit at the New York Times, Krugman gives the Obama administration another walloping from the left for wimpish groveling to Wall Street.
Even before Geithner unveiled his latest bail-out (in an off-camera presentation planned to mitigate the Treasury Secretary's meagre rhetorical skills), Krugman was abusing its "zombie ideas". No doubt Geithner's insistence on the Hill on Thursday that he yearns for a legislative green light to discipline irresponsible bankers will be duly and, no doubt correctly, flayed by Krugman as mere persiflage.
In his official obituary for the bank bail-out plan, published in the Times on Monday - the same day as the scheme's official birth - Krugman announced somberly: "This is more than disappointing. In fact, it fills me with a sense of despair."
(Yes, this does sound a bit pompous. As connoisseurs of Martin Wolf and other prominent economic Cassandras down the decades know well, there's nothing like a widely read economics column to induce a tone of rotund self-importance. "I'm concerned about Europe," Krugman began a column grandly a few weeks ago.)
Of course Geithner got off on the wrong foot by coming to public attention during his nomination hearings before Congress for failure to pay certain federal taxes when he was at the International Monetary Fund, even though the IRS - a branch of the Treasury - reminded him of the omission more than once. However dilatory or devious in their own dealings with the taxman, Americans are merciless in their moral posture towards public figures in the same position.
Geithner's appearance is against him, too. Treasury secretaries are supposed to evince gravitas, not resemble just the sort of rumpled 40-something investment banker whose funny-money antics put capitalism on the ropes.
But while Obama's Mr Fixit is only a hair's breadth away from becoming a stock figure on the comedy shows, little of the public derision is rubbing off on his boss. Though the prevailing consensus is that the bail-out and stimulus packages are saddling Americans with a couple of trillion in debt, with a better-than-even chance most of the money will miss its purpose, undermine the dollar and bring on hyperinflation, Barack Obama continues to ride pretty high.
In the president’s opinion, Geithner is ‘making all the right moves’The latest round of polling has his ratings very respectably in the mid-60s, with one spectacular dip into the low 40s, reflecting the public's low opinion of his handling of the AIG bonuses. On that issue, as I suggested here last week, Obama danced on the edge of the volcano and got singed.
Predictably enough Obama has been standing by his man. "I have complete confidence in Tim Geithner and my entire economic team," he said mid-week. In the President's opinion, Geithner "is making all the right moves".
Obama wouldn't be the first president to realise that it does no harm to have public odium pleasantly deflected onto a subordinate. Year after year George Bush watched the mud getting hurled at Karl Rove and Dick Cheney. It was the late great historian Walter Karp who argued that the most politically adept of all presidents, Franklin Delano Roosevelt, conceived his notorious court-packing proposal - up to six new justices on the Supreme Court - to deflect attention from serious difficulties on other fronts.
So Geithner gets pelted with mouldy cabbages, while Obama - entirely responsible for the basic economic strategy of bailing out the banks rather than taking them over - charms the nation.
It won't go on forever. If things go badly, the people know perfectly well where the buck stops. There's already a powerful drumbeat of disquiet from Krugman and former assistant Treasury Secretary Paul Craig Roberts on the CounterPunch site that Obama, for all his smoothness, is Hoover-like in his timid orthodoxy.
Back from the political graveyard last week came Eliot Spitzer arguing in a strong column in Slate that Obama's $200bn pay-off to AIG was the real scandal, not the $180m in bonuses.
A few days after writing the column Spitzer was on CNN giving his views. At this point in the former New York governor's unexpected renaissance one of the agents of Spitzer's downfall gave him an untimely nip on the ankle. The madam running the call-girl business patronised by the governor disclosed that another of her clients had been the baseball player New Yorkers love to hate, Alex Rodriguez. Spitzer, A-Rod and Madonna linked hands in a Daily News gossip item. For now, Obama sails smoothly on. ·
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