Wednesday, April 22, 2009


I have never seen a profile of a Treasury Department Secretary like the one put together of Timothy Geithner for the cover of Portfolio magazine by Gary Weiss.

Here are some of the lowlights:

When I interviewed Geithner a year ago for a profile for this magazine...At the time, some of the nation’s most prominent figures in government and finance—former Federal Reserve chairmen Paul Volcker and Alan Greenspan, as well as John Thain, then CEO of Merrill Lynch, and former New York Fed chief Gerald Corrigan—were only too happy to share fond anecdotes about this youthful public official on the rise. When I approached them again for this article, to get a word in defense of their beleaguered friend, the reaction was far different. Greenspan was “working against a series of his own deadlines and sends his regrets,” a spokesperson told me. Volcker was “not granting interviews.” Corrigan also declined to comment on Geithner. “It’s just a little bit early in his tenure,” said a spokesperson.
There is something deeply disturbing about a Treasury secretary showing flop sweat in the middle of the worst economic crisis since Herbert Hoover was president. “Some people rise to the occasion, and some don’t,” says Peter Cohan, a management consultant and the author of You Can’t Order Change. “You really want somebody who’s confident, realistic, and coming up with better ideas and seeing the ideas work.”
Geithner’s many years in the bureaucracy have shaped him in other, less than flattering ways. Bill Seidman, former chairman of the Federal Deposit Insurance Corp., considers the Treasury secretary to be “a smart guy but a certified bureaucrat.” He speaks from firsthand experience. It was the late 1990s, Lawrence Summers was Treasury secretary, and Geithner, as the undersecretary for international affairs, was his loyal deputy. Summers gave a speech on Japan’s troubled banking system, a subject that Seidman, who then worked for Morgan Stanley, knew intimately from his frequent visits to the country. “It was essentially not relevant,” Seidman says of Summers’ speech. It showed “a lack of familiarity with what’s going on there.” Seidman, never a shrinking violet, said as much at the time when a reporter asked him in Japan for a comment—at which point he ran afoul of Geithner. According to Seidman, Geithner called him and said, “You’re a disloyal American. You can’t make statements like that on foreign soil about a secretary of the Treasury.”

Seidman, who was awarded the Bronze Star for his service in the U.S. Navy during World War II, wasn’t accustomed to having his loyalty questioned, certainly not by someone approximately 40 years his junior. “I said, ‘Where does it say that in the Constitution?’ ” Seidman tells me.

That episode provides a peek into Geithner’s character and offers up clues to his behavior during the current crisis. Seidman hadn’t been confronted by Geithner, the precocious junior official of his early years, or Geithner, the brilliant problem grasper he was reported to be as he matured at Treasury. Instead, he encountered Geithner, the government cog, who apparently served his mentor Summers with such unquestioning fealty that he was willing to upbraid a well-reputed private citizen for an offhand remark.
...his constituency of one, the president, is firmly behind him (at last look). Geithner has been seeking to reclaim the narrative by writing an op-ed for the Wall Street Journal and granting a few carefully stage-managed interviews—so stage-managed, in fact, that a public-relations aide openly scribbled out talking points to Geithner in front of a National Public Radio producer during an interview at his office.

No matter how well rehearsed, Geithner strains to exude the confidence that comes with knowledge and experience. It’s old news to people familiar with Geithner that he is not an economist and has no private-sector experience in finance, in contrast to pretty much every other Treasury secretary in recent years...
Considering Geithner’s history of leaning on advisers and mentors, one can find a guide to his future actions not just in the John Thains and Gerald Corrigans he relied on at the New York Fed but also the people surrounding him in the Obama administration. Since Obama became president, the center of gravity at Treasury has shifted to policymakers from the Hamilton Project, a little-known think tank under the wing of the Brookings Institution that promotes growth-oriented economic policies. The group was founded in 2006 by its then director, Peter Orszag, who now heads the Office of Management and Budget. Other members of the group’s advisory board include Geithner’s old boss Robert Rubin, lately of Citigroup, and former deputy Treasury secretary Roger Altman, who presided at one of Geithner’s rare public appearances, a March 25 event at the Council on Foreign Relations.
Then there is this comment on Weiss' profile by Chris Whalen:

Gary Weiss of Portfolio has just published a profile of Treasury Secretary Tim Geithner:

He recalls my first experience with Geithner at an NYU conference on risk management hosted by the Stern School several years ago. Even though Geithner admitted yesterday in his congressional testimony that he has no actual financial markets experience whatsoever, you would think that an economist and bureaucrat focused on financial policy would have some passing acquaintance with Basel II, especially as the President of the FRBNY.

The more I see and hear Secretary Geithner speak on financial services policy, the more I am convinced that this man has not a clue what he is doing and must therefore be acting at the instruction of others — Bob Rubin, Larry Summers and the folks at GS — IMHO.


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