EconoMonitor

Tim Geithner As Treasury Secretary: A Man Who Doesn’t Lose his Cool

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News services reported today that Tim Geithner, currently President of the Federal Reserve Bank of New York, was President-elect Obama’s choice to be Secretary of the Treasury. The fiancial markets reacted very positively to the news. This presumably captures both relief that some policy uncertainty has been resolved at this critical juncture and approval that Geithner is the man chosen.   I share the pleasure at this appointment.

Tim Geithner is refreshingly straightforward and personable, and doesn’t “stand on ceremony.”  At the same time, he is cool and unflappable. By coincidence, the Economic Advisory Panel to the NY Fed President, of which I am a member, met today. Unusually, Geithner excused himself at two points in the four-hour meeting to take short phone calls. Given the timing, it seems very likely that one of the phone calls was Senator Obama offering him the Treasury position. These Panel meetings are off the record, but I think I am not betraying any confidences to report that Geithner betrayed no sign to us of what had just happened. No change in demeanor, no change in the substantive flow of the discussion. This is a guy who does not lose his cool.  Just what the country needs.


Originally published at Jeff Frankel’s Weblog and reproduced here with the author’s permission.

5 Responses to “Tim Geithner As Treasury Secretary: A Man Who Doesn’t Lose his Cool”

Tilak Ratnayake FCMANovember 24th, 2008 at 10:08 am

At this point of time world needs indipendent knowledgeble people like Geithner and Professor Rubni.I think It is the people with fresh bold outlooks and that matter rather than those worshiping the failed giants as a result of mismanagement.

GuestNovember 24th, 2008 at 10:59 am

wow, what stunning, speculative analysis. I feel so confident now that I know that Geithner *might* have taken a call from Obama during a meeting.BTW, the other call? It was his Paulson: “Tim? This is Hank. Good luck, sucker!!!” Didn’t lose his cool then, either… what a guy.

Nicholas DahlheimDecember 4th, 2008 at 8:59 am

Dear RGE Monitor and Jeff Frankel:I attended the Foreign Policy Assocation Dinner in New York City yesterday for Treasury Secretary-to-be Timothy Geithner. I also had the distinct pleasure of meeting Dr. Nouriel Roubini as well at the event. Dr. Roubini and key analysts like yourself really have been a beacon of insight in these dark and troubling economic times.Geithner is really an excellent choice for Treasury Secretary, and he breaks the mold compared to other recent choices for Treasury Secretary. As a person with extensive background in government, fluency in Chinese and Japanese, on-the-ground experience working in emerging Asian markets even prior to the 1997-98 financial crisis, and time spent at the NY Fed; Geithner brings a breadth of vision exceeding that offered by Paulson whose understanding of finance, unfortunately, was heavily limited by his experience as a Wall Street investment banker.Paulson did not prove adept at understanding the global character of the financial system nor did he understand the linkages between the financial sector and the real economy. Also, indecision surrounding whether the government would add bad securities to its Treasury balance sheet as well as his fateful choice not to lend a helping hand to Lehman Brothers really caused much damage to the confidence of global financial markets and much suffering to the many millions around the world who were thrown into unemployment as a result. Friends of mine (who will remain anonymous) who work in the hedge fund and investment banking industries attribute Paulson’s choice letting Lehman fail to Paulson’s and Fuld’s (Lehman’s long-time and indominable CEO) mutual dislike of each other during their days on Wall Street. If what my friends say is correct, Paulson really displayed a remarkable lack of leadership and foresight—Lehman’s exceptionally high exposure to risky credit default swaps threatened the entire system of interbank lending and as such, Lehman needed to be patched up strategically to prevent a credit meltdown. The cascading failures now have extended all the way down to Citigroup, a bank holding more than $2.3 trillion in assets. Together these failures are perhaps leading the U.S. into the deepest recession since WWII and perhaps even, G-d forbid, another Great Depression at a time when world energy, food, and water supplies are also being taxed enormously by the sheer size of the global economy. Arguably the current financial crisis has roots that run far deeper into the financial community, the government, American society, and the global economy than the person of Treasury Secretary Hank Paulson. But, his poor leadership this past year as the crisis worsened surely will make the crisis that much worse.This brings us back to the central underlying point of my post: my cautious optimism regarding the prospects for a real change in direction and culture at the Treasury under Geithner. Geithner brings a much more global vision rooted in the understandings of the nuance and strategy necessary to conduct government and central banking policy. For this reason, he will distinguish himself from his predecessor Hank Paulson. The current financial crisis demands an international response—the IMF and the BIS will need to get involved alongside the world’s central bankers (with whom Secretary-to-be Geithner has an excellent rapport) to restructure the global financial system along new grounds. The dollar will likely have to be shed as the world’s reserve currency in favor of a more multipolar global financial order; and depending upon how large some of the bailouts of both the financial and real economies eventually become in the United States, the dollar might no longer be feasible as a fiat currency for the United States. All of these seemingly apocalyptic options are now on the table for policy makers. Someone with Geithner’s judgment (phronesis) will be able to confront these tough choices and choose the appropriate fork in the roads when faced with tough dilemmas.My overriding hope is that 2009 will be a fruitful year of renewed international cooperation as capable people like Secretary Geithner steer the economy into new and calmer seas.My best wishes and highest hopes are reserved for the new Secretary of the Treasury, and I sincerely hope that Secretary Geithner achieves much in this hour of great economic peril and geopolitical turmoil.Nicholas T. Dahlheimhttp://curseofinterestingtimes.wordpress.com/

Nicholas DahlheimDecember 4th, 2008 at 8:59 am

Dear RGE Monitor and Jeff Frankel:I attended the Foreign Policy Assocation Dinner in New York City yesterday for Treasury Secretary-to-be Timothy Geithner. I also had the distinct pleasure of meeting Dr. Nouriel Roubini as well at the event. Dr. Roubini and key analysts like yourself really have been a beacon of insight in these dark and troubling economic times.Geithner is really an excellent choice for Treasury Secretary, and he breaks the mold compared to other recent choices for Treasury Secretary. As a person with extensive background in government, fluency in Chinese and Japanese, on-the-ground experience working in emerging Asian markets even prior to the 1997-98 financial crisis, and time spent at the NY Fed; Geithner brings a breadth of vision exceeding that offered by Paulson whose understanding of finance, unfortunately, was heavily limited by his experience as a Wall Street investment banker.Paulson did not prove adept at understanding the global character of the financial system nor did he understand the linkages between the financial sector and the real economy. Also, indecision surrounding whether the government would add bad securities to its Treasury balance sheet as well as his fateful choice not to lend a helping hand to Lehman Brothers really caused much damage to the confidence of global financial markets and much suffering to the many millions around the world who were thrown into unemployment as a result. Friends of mine (who will remain anonymous) who work in the hedge fund and investment banking industries attribute Paulson’s choice letting Lehman fail to Paulson’s and Fuld’s (Lehman’s long-time and indominable CEO) mutual dislike of each other during their days on Wall Street. If what my friends say is correct, Paulson really displayed a remarkable lack of leadership and foresight—Lehman’s exceptionally high exposure to risky credit default swaps threatened the entire system of interbank lending and as such, Lehman needed to be patched up strategically to prevent a credit meltdown. The cascading failures now have extended all the way down to Citigroup, a bank holding more than $2.3 trillion in assets. Together these failures are perhaps leading the U.S. into the deepest recession since WWII and perhaps even, G-d forbid, another Great Depression at a time when world energy, food, and water supplies are also being taxed enormously by the sheer size of the global economy. Arguably the current financial crisis has roots that run far deeper into the financial community, the government, American society, and the global economy than the person of Treasury Secretary Hank Paulson. But, his poor leadership this past year as the crisis worsened surely will make the crisis that much worse.This brings us back to the central underlying point of my post: my cautious optimism regarding the prospects for a real change in direction and culture at the Treasury under Geithner. Geithner brings a much more global vision rooted in the understandings of the nuance and strategy necessary to conduct government and central banking policy. For this reason, he will distinguish himself from his predecessor Hank Paulson. The current financial crisis demands an international response—the IMF and the BIS will need to get involved alongside the world’s central bankers (with whom Secretary-to-be Geithner has an excellent rapport) to restructure the global financial system along new grounds. The dollar will likely have to be shed as the world’s reserve currency in favor of a more multipolar global financial order; and depending upon how large some of the bailouts of both the financial and real economies eventually become in the United States, the dollar might no longer be feasible as a fiat currency for the United States. All of these seemingly apocalyptic options are now on the table for policy makers. Someone with Geithner’s judgment (phronesis) will be able to confront these tough choices and choose the appropriate fork in the roads when faced with tough dilemmas.My overriding hope is that 2009 will be a fruitful year of renewed international cooperation as capable people like Secretary Geithner steer the economy into new and calmer seas.My best wishes and highest hopes are reserved for the new Secretary of the Treasury, and I sincerely hope that Secretary Geithner achieves much in this hour of great economic peril and geopolitical turmoil.Nicholas T. Dahlheimhttp://curseofinterestingtimes.wordpress.com/

Nicholas DahlheimDecember 4th, 2008 at 8:59 am

Dear RGE Monitor and Jeff Frankel:I attended the Foreign Policy Assocation Dinner in New York City yesterday for Treasury Secretary-to-be Timothy Geithner. I also had the distinct pleasure of meeting Dr. Nouriel Roubini as well at the event. Dr. Roubini and key analysts like yourself really have been a beacon of insight in these dark and troubling economic times.Geithner is really an excellent choice for Treasury Secretary, and he breaks the mold compared to other recent choices for Treasury Secretary. As a person with extensive background in government, fluency in Chinese and Japanese, on-the-ground experience working in emerging Asian markets even prior to the 1997-98 financial crisis, and time spent at the NY Fed; Geithner brings a breadth of vision exceeding that offered by Paulson whose understanding of finance, unfortunately, was heavily limited by his experience as a Wall Street investment banker.Paulson did not prove adept at understanding the global character of the financial system nor did he understand the linkages between the financial sector and the real economy. Also, indecision surrounding whether the government would add bad securities to its Treasury balance sheet as well as his fateful choice not to lend a helping hand to Lehman Brothers really caused much damage to the confidence of global financial markets and much suffering to the many millions around the world who were thrown into unemployment as a result. Friends of mine (who will remain anonymous) who work in the hedge fund and investment banking industries attribute Paulson’s choice letting Lehman fail to Paulson’s and Fuld’s (Lehman’s long-time and indominable CEO) mutual dislike of each other during their days on Wall Street. If what my friends say is correct, Paulson really displayed a remarkable lack of leadership and foresight—Lehman’s exceptionally high exposure to risky credit default swaps threatened the entire system of interbank lending and as such, Lehman needed to be patched up strategically to prevent a credit meltdown. The cascading failures now have extended all the way down to Citigroup, a bank holding more than $2.3 trillion in assets. Together these failures are perhaps leading the U.S. into the deepest recession since WWII and perhaps even, G-d forbid, another Great Depression at a time when world energy, food, and water supplies are also being taxed enormously by the sheer size of the global economy. Arguably the current financial crisis has roots that run far deeper into the financial community, the government, American society, and the global economy than the person of Treasury Secretary Hank Paulson. But, his poor leadership this past year as the crisis worsened surely will make the crisis that much worse.This brings us back to the central underlying point of my post: my cautious optimism regarding the prospects for a real change in direction and culture at the Treasury under Geithner. Geithner brings a much more global vision rooted in the understandings of the nuance and strategy necessary to conduct government and central banking policy. For this reason, he will distinguish himself from his predecessor Hank Paulson. The current financial crisis demands an international response—the IMF and the BIS will need to get involved alongside the world’s central bankers (with whom Secretary-to-be Geithner has an excellent rapport) to restructure the global financial system along new grounds. The dollar will likely have to be shed as the world’s reserve currency in favor of a more multipolar global financial order; and depending upon how large some of the bailouts of both the financial and real economies eventually become in the United States, the dollar might no longer be feasible as a fiat currency for the United States. All of these seemingly apocalyptic options are now on the table for policy makers. Someone with Geithner’s judgment (phronesis) will be able to confront these tough choices and choose the appropriate fork in the roads when faced with tough dilemmas.My overriding hope is that 2009 will be a fruitful year of renewed international cooperation as capable people like Secretary Geithner steer the economy into new and calmer seas.My best wishes and highest hopes are reserved for the new Secretary of the Treasury, and I sincerely hope that Secretary Geithner achieves much in this hour of great economic peril and geopolitical turmoil.Nicholas T. Dahlheimhttp://curseofinterestingtimes.wordpress.com/

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