Opinion

Felix Salmon

Treasury: Still Going Nowhere

By Reuters Staff
March 13, 2009

To lose one deputy treasury secretary might be considered a misfortune; to lose two — and both before they are even officially nominated, no less — looks suspciously like carelessness.

George Stephanopoulos has the depressing news:

Democratic sources say that H. Rodgin Cohen, a partner in the New York law firm Sullivan & Cromwell LLP, and the leading candidate for Deputy Treasury Secretary, has withdrawn from consideration.
It’s the third withdrawal of a top Treasury Department staff pick in less than a week…
Democratic sources said that an issue arose in the final stages of the vetting process.
As one source put it, "it’s back to the drawing board."
Cohen had risen to the top after the withdrawal last week of expected deputy treasury secretary pick Annette Nazareth.
Nazareth was forced to withdraw from consideration for the deputy treasury slot because senators made it clear she would face tough questioning over her time at the Securities and Exchange Commission.

Deputy treasury secretary is a huge and important job: it’s the position that Larry Summers held when he appeared on the cover of Time as part of the Committee to Save the World. But it seems that the very experience which qualifies any given person for the job is also liable to disqualify them.

What’s even more depressing than the difficulties filling these positions is the weird way in which the Obama administration is pushing the line that there isn’t a problem here at all:

Obama administration officials have pushed back hard at critics who argue that failure to fill key Treasury Department positions is hampering their response to the economic crisis.
The administration has argued that they have more appointees in place than previous administrations and have done big things: housing, stimulus, and the beginning of their bank plans…
Foreign Policy reported yesterday that Britain’s most senior civil servant, cabinet secretary Sir Gus O’Donnell, claimed it was hard to find anyone to speak to at the US Treasury Department.
He blamed the “absolute madness” of the US system where a new administration had to hire new officials from scratch, leaving a decision-making vacuum.

O’Donnell is right, and the Obama spin doctors are wrong. The fact that Treasury has failed to fill substantially all of its senior political positions, four full months after Geithner was nominated, is a national scandal. We’re not impressed by Geithner’s vague sketch of "the beginning of" his bank plan; we want a bank plan! And we want it a couple of months ago, before Citigroup stock dropped below $1 a share on utter uncertainty about what on earth was going on or might happen.

I’m not sure how much of all this can or should be blamed on Geithner personally, but the fact that economic policy seems to have been taken over by Larry Summers doesn’t help, and Geithner simply doesn’t seem to have the force of personality which will persuade both Wall Street and the general population that he knows what he’s doing. He started off with quite a lot of goodwill, and he’s lost that entirely; now that it’s lost, I don’t think he can regain it. It’s a truly sorry state of affairs.

Reprinted from Portfolio.com

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