Who will be the next Treasury secretary?

By Felix Salmon
May 23, 2012
Glenn Somerville has one of the first of what will surely be many articles handicapping possible Treasury secretaries come January.

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Glenn Somerville has one of the first of what will surely be many articles handicapping possible Treasury secretaries come January. We know we’re going to get a new one, whatever happens — Geithner won’t stay on for a second term.

Top of the list if Obama gets re-elected is Larry Fink, of Blackrock — he wants the job, and he has a pretty solid reputation in finance circles. I think the problem with Fink, though, is that the country has had enough of financiers at Treasury. I suspect that Obama will want Geithner’s successor to be a communicator — someone who can get through not only to the country at large (something Geithner’s never been good at) but also to Congress. And Fink is no man of the people.

It almost goes without saying that Jamie Dimon neither wants the job nor would ever be offered it, at this point.

The other main name on the Democratic side of things is Erskine Bowles — also a financier, albeit one with rather more Washington experience than Fink has. Bowles would represent a continuation of Obama’s first-term habit of appointing former Clinton aides to top economic-policy jobs; that would disappoint many progressives, who are looking for more of a break from the deregulatory past.

Dan Tarullo, another name mooted, is being presented as Bowles lite: the same combination of finance and Clinton-era politicking, without quite the same degree of stature. Tarullo would certainly be tough on banks, but frankly if that’s his aim he’s better off staying where he is, at the Fed, which is also the top bank regulator. Roger Altman, yet another Clinton aide who’s made a fortune in investment banking, would be a more interesting choice, but I for one would really love the idea of a Treasury secretary who doesn’t come from Wall Street.

There are four names put forward on the Republican side: John Taylor, Glenn Hubbard, Robert Zoellick, and Kevin Warsh. The first two, I think, would be dreadful: you really don’t want your Treasury to be a political hack. Zoellick and Warsh would be much more credible.

But most likely, if Romney gets elected, he’ll pick someone unexpected — someone he knows well from his Bain Capital days, and feels he can trust.

In any case, since we’re throwing names out there, let me put forward two ideas of my own. First, for Romney: Randy Quarles. He’s almost a mini-Romney: a Mormon private-equity executive who has a fair amount of experience in government. The two would almost certainly work very well together.

And second, for Obama: Eric Schmidt, who needs something to do, now that he doesn’t have a day job any more, and who has been very active in Democratic fundraising circles. And who would certainly be a welcome change from the technocrats and financiers we’ve become accustomed to. If you’re going to appoint a billionaire to the job, better it’s someone who made his money from Google than someone who made his fortune by making bets with other people’s money.

Update: Annie Lowrey, quite rightly, adds Jack Lew to the list. Who has a very good chance of getting the job, if only because he’s already passed a confirmation hearing and therefore wouldn’t present the administration with an early nomination battle. Also, I forgot to mention my favorite dark horse, if Obama’s re-elected: Barney Frank!

15 comments

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Also adding to the tally against Larry Fink: He is an absolutely awful public speaker for such a smart man. Absolutely tongue-tied. We don’t need another one of those in Treasury, especially after Paulson and Geithner. Yeesh.

Posted by EpicureanDeal | Report as abusive

Does it really make any difference?

It’s not like The Street takes orders from Treasury – more like the other way around, or over Treasury’s head.

Posted by MrRFox | Report as abusive

Doesn’t the Treasury Secretary more or less need to be a financier though, given the outsize influence of Wall Street on the economy and how complex the Street has become? John W. Snow, an industry Fortune 500 CEO, was an absolute deer lost in the headlights. Hank Paulson, for all his faults, at least had some rough idea of what could’ve occurred if Washington didn’t act to stymie the bank failures.

Eric Schmidt would look great from a P.R./optics perspective, and no doubt he’s a smart man. But say there’s another Wall Street crisis that requires action on the part of Treasury, and requires someone in that post who understands what action needs to be taken. Is Schmidt that man?

Posted by LA_Banker | Report as abusive

Tarullo’s a hack. Warsh is significantly better.

Posted by ExaminerCarter | Report as abusive

if obama wins it’s gotta be jack lew, doesn’t it? one private sector pick not mentioned is IBM’s palmisano – he’s retiring and has given a couple “big picture” speeches with patriotic rhetoric lately

Posted by NYEsquire | Report as abusive

Is Felix really calling the creator of the Taylor rule a political hack? He’s more accomplished as an academic than anyone else mentioned in this post – arguably more accomplished as an academic than all of them put together. I could understand an argument that Taylor lacks the executive or managerial experience to be Treasury Secretary, and I think that his background is better suited to being a Fed governor.

Posted by realist50 | Report as abusive

” But say there‚Äôs another Wall Street crisis that requires action on the part of Treasury, and requires someone in that post who understands what action needs to be taken. Is Schmidt that man?”

Isn’t this precisely what we are all complaining about — the expectation on Wall Street that when they screw up, the the Fed will step in and bail them out?

Maybe it would be a GREAT thing to have someone at Treasury who doesn’t see that as his role? If Wall Street see that they don’t have a friend in government, they might not be quite so aggressive in their gambling; and might work a little harder to create a SYSTEM for dealing with problems rather than the current ad hoc hacks we have now.

Posted by handleym99 | Report as abusive

Realist50, there is no doubt that Taylor has great academic credentials, and Hubbard probably has even better ones. But Felix’s point on both of them is that they have been somewhat disingenuous about monetary and fiscal policy ever since Obama was elected. They have been quick to criticize Obama on flimsy evidence while completely failing to call out nonsense coming from the right. Hence the “political hack” label despite their really, really good academic credentials.

Posted by VMatheson | Report as abusive

Barney Frank may be great at messaging (an interesting point to debate), he is unequipped and largely uninterested in managing the Treasury Department. Being Treasury Secertary is more than just standing behind a podium and talk. There are actual management issues.

Posted by GregHao | Report as abusive

Barney Frank may be great at messaging (an interesting point to debate), he is unequipped and largely uninterested in managing the Treasury Department. Being Treasury Secertary is more than just standing behind a podium and talk. There are actual management issues.

Posted by GregHao | Report as abusive

Zoellick thinks for himself, which would cause trouble for him.

In the autumn of 2010, Zoellick called for a new international system of trade finance that would “involve the dollar, the euro, the yen, the pound, and a renminbi that moves toward internationalization and then an open capital account.” He also said this system “should consider employing gold as an international reference point of market expectations about inflation, deflation, and future currency values.”

Much as I would love having an administration in office that thinks like that, I don’t think it would do too much good to have one outlier thinking things like that in an administration that, otherwise, doesn’t.

Posted by Christofurio | Report as abusive

IMO the best kind of candidate for Treasury Secretary is a former US Attorney with a demonstrated zeal, and record of success, in prosecuting organized crime.

Posted by MrRFox | Report as abusive

No mention of Laura Tyson? Particularly if, as expected, Hillary declines to do another stint at State, it would put a woman in one of the most high profile positions. Also make minor history as the first woman in the post.

Posted by lknobel | Report as abusive

I agree with lknobel that the senior cabinet will need more women. Why not Lael Brainard, who has one of Geitner’s and Summer’s old jobs?

Posted by FTI | Report as abusive

Who is the furthest in arrears paying their income tax? That seems to be a major decision point for this particular president. Particularly for someone going into a position involving huge sums of money. At least it is internally consistent. Supreme Court justice without courtroom experience, secretary of treasury who cheated on his taxes for years……..

A refreshing change of pace might be to have someone who can actually lead by example thus obviating the need for a full time propaganda staff to fluff his/her public image.

Posted by justsayin2011 | Report as abusive