At this point I think most political observers agree that the selection of Tim Geithner for Treasury Secretary was not one of President Obama’s best decisions.  Its not his tax evasion that gets me, though that’s disappointing in its own right, its his apparent inability to recognize the great importance of image in his position.  I’ve just recently watched Geithner’s debut press conference from last week and it was shockingly poor.  Part of Geithner’s problem is that, while he’s undoubtedly an intelligent person with nearly ideal experience and education for his position (he has graduate degrees in East Asian Studies as well as International economics), his boyish features make him look like he’s still a frat boy from some angles.  And his jilted speech, constant eyes on the tele-prompter, nervous rocking back and forth, and deer-in-the-headlights facial expression make him come-off…as someone who is not prepared for his position.  Lastly, and most importantly, his presentation was long on melodrama but very short on details.

Unsurprisingly, the speech was met with significant disappointment and even ridicule as described in this article from the Huffington Post. And the stock market took a nosedive as a result.  Investors were unsettled by the fact that we’re this far along and yet the Treasury is still unsure of the details of the plan, and that Geithner is obviously still trying to settle into his position.  Now of course its very rare that a Treasury Secretary is asked to take office and immediately step into such a difficult situation, it would be hard for anyone to hit the ground running.  And this article from the Washington Post gives us some insight into why Geithner’s “plan” seemed so ill-developed.  But when presenting something this critical everything must be perfect.  If the plan’s not ready, postpone the press conference!  The market may temporarily dip as a result but with the whole world waiting to hear what Geithner has to present he should have held off until he had details that he could present in a polished manner.  We’re talking economics and finance here!  Where consumer and investor confidence are actually quantified and plugged into equations.  Being mindful of the impression his speech will have on listeners is probably more important for Geithner than any other cabinet member.  Americans aren’t going to lose thousands of dollars from their investment portfolio if Hillary blows a speech.

As far as the bailout itself goes I’m a big fan of doing something, I just don’t know exactly what they’re going to do.  I think many people who oppose the bailout due to its expense are forgetting the part that the FDIC has to play in all this.  We are committed through the FDIC to bailout these banks one way or another and stabilizing a failing bank is much, much cheaper than refunding everyone’s accounts after they’ve collapsed.  The bank bailout is a cost-saving measure designed to prevent taxpayers from having to foot an even larger bill should any of the major banks collapse, its an attempt to minimize the debt that we have to lay on the next generation.  And I’m not much swayed by punitive arguments either.  I am frankly not willing to sacrifice the tax-dollars of the American people and the stability of our nation in hopes that if a bank fails some billionaire executive somewhere will feel bad about what he did and try to change his behavior in the future.  Most of those responsible for our current financial crisis have likely moved on to other jobs anyway.  Letting banks fail doesn’t teach anybody anything and it strikes me as a case of chasing the snake when you should be busy sucking out the poison.

What Geithner has laid out so far seems reasonable, and you can read a decent summary of it in this Freakonomics Blog Post, though details are obviously still lacking.  I just hope he can get a plan, and himself, together in the near future so he can restore a little much-needed confidence.

No related posts.