Replacing Geithner

March 20, 2009

David Reilly is the latest columnist to weigh in with Geithner-resignation speculation; he alights on Jamie Dimon as the next Treasury secretary. And he’s right when it comes to both Dimon’s biggest strength and his biggest weakness:

On a personal level, Dimon has a sense of self-assurance that Geithner lacks…
Whereas Geithner often looks uncomfortable in the spotlight, Dimon basks in it…
Dimon is also a banker and may not have the stomach to force upon his former industry some of the tougher medicine that may still prove necessary. Given the populist mood in Washington, a Wall Street banker, no matter how respected, may not be the ideal candidate.

Yes, it would be great if Geithner had more self-assurance — both Rubin’s aura of quiet mastery and Paulson’s authoritarian decisiveness work better in a key political leader than Geithner’s slightly dweeby earnestness. But then again, both Rubin and Paulson learned their leadership skills from being in charge of the most insightful and ambitious group of professionals on the planet. That might have served them well in terms of projecting competence and charisma, but at this point "I used to run a major bank" is a disqualification for the job of Treasury secretary, not a prerequisite.

I don’t think that Reilly — or most people connected to Wall Street, for that matter — really understand the national depth of anger at the financial system — the driver of the current spat over AIG bonuses. With unemployment at 8.1%, underemployment (U6) at 14.8%, and a similar number of Americans underwater on their mortgages, no one is any longer buying the idea that only the people who were paid hundreds of millions of dollars getting us into this mess are qualified to get us out of it.

Americans may or may not be right on this front. But if you played a key role in screwing up the economy, your reward should not be to run it. Dimon was by no means the worst offender on that front, but he certainly never complained about the paychecks which flowed into his pocket from the greatest financial boom of all time.

Let’s keep Dimon where he is, at JP Morgan: he seems to run the place well. And for that matter, let’s keep Geithner where he is, too: we need fewer jobs needing filling at Treasury, not more. But do keep a close eye on the eventual nominee for deputy Treasury secretary. My guess is that person — whoever it ends up being — has a very good chance indeed of taking over before Obama’s first term is up.

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