Are Geithner’s Days Numbered?
Posted on March 19, 2009
This originally appeared on CNN.comWASHINGTON (CNN) -- The man who was a symbol of Barack Obama's moderation might become a symbol of the new president's struggle with competence.
Tim Geithner, who was once hailed as the kind of guy who understood Wall Street, is now the Obama administration's version of "Brownie" (as in "Brownie, you're doing a heck of a job.").
At the mere word of Mr. Geithner's nomination as treasury secretary back in November, the market jumped close to 500 points. He was hailed by market insiders as a "fantastic choice," "highly-skilled and pragmatic." He was even praised by his Bush administration predecessor, Hank Paulson, who said, "I have great confidence in his understanding of markets, his judgment and leadership, and his ability to meet the challenges that lie ahead."
But then news came about his tax problems, and the bloom was off the rose. Sen. Chuck Grassley, R-Iowa, put it this way: "It's a little disconcerting. I'm not saying at this point it's disqualifying. But it's a little more important about income tax for somebody that's overseeing the IRS than there is, maybe, for the secretary of agriculture, as an example."
If you are put in charge of running the IRS, you need to have a stellar record of paying your own taxes. He didn't, and that started a seemingly irreversible downhill slide.
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After getting pounded by the Senate Finance Committee, Geithner was quickly sworn in by the president, only to be confronted by the toughest financial crisis of the last seven decades. He immediately faced an unruly mob, previously known as the Congress. He faced immediate questions about where the money was going on TARP, the $700 billion bailout program for the financial sector.
When Geithner came up with an incomplete proposal on housing, Sen. Jeff Sessions said, "Secretary Geithner, you need to give a detailed plan in clear terms of how we are to proceed. You've had more than a month to work on the proposal, but what we've heard is an outline."
When he came up with an even more incomplete proposal on financial reform, the market tumbled by close to 400 points. And now the mob has reached an especially heated pitch over AIG and their bonus structure.
It was bad enough that Geithner knew about the bonuses and didn't tell his boss about it for two days. What's worse is he didn't tell the American people for two weeks. And what is really galling is that in the huge so-called stimulus bill, a provision that made certain that AIG executives wouldn't get outlandish bonuses was watered down to the point of pure meaninglessness by the Treasury Department (which right now is staffed by Mr. Geithner and seemingly nobody else) and by Chris Dodd, the Connecticut senator.
Dodd has his own problems with his home state voters, but at least he has a year and half to try to make it up to his constituents.
Geithner's only constituent is President Obama. Mr. Obama selected Mr. Geithner because his appointment was expected to calm Wall Street. But what good does it do the president to gain Wall Street and lose the rest of America?
Not much good, frankly, and that is why the man the president compared to Alexander Hamilton might get virtually the same treatment (metaphorically, of course) that Hamilton got from Aaron Burr.
The president has said that he has full confidence in Mr. Geithner. And of course, George Bush had complete confidence in Mike Brown, the FEMA chief at the time of Hurricane Katrina, before Brown was out of a job.
But the president may learn soon that the fine art of political survival sometimes means making somebody else the scapegoat. Today, that scapegoat just may be Tim Geithner.
The current betting has Geithner out by June 30. That might be a bit optimistic.
The opinions expressed in this commentary are solely those of John Feehery.