James Pethokoukis

Politics and policy from inside Washington

Why panicky Dems are bailing on Tim Geithner

November 23, 2009

One residual from Timothy Geithner’s rough confirmation back in January — “Turbo Tax Tim” and all that — is that his political position is probably a bit more precarious than that of the typical newbie treasury secretary.

Not only has Geithner been a frequent target of late-night comedy shows, he’s the public face of the unpopular bank and automaker bailouts. High unemployment rate isn’t helping either.

No surprisingly, a new Rasmussen poll finds that 42 percent of Americans think Geithner has done a “poor” job handling the economy versus 20 percent who rate him “good or excellent.” And the furor over his handling of the AIG bailout has yanked the competence issue back to the forefront.

So there is little political risk from calling for his resignation, as Representative Peter DeFazio, an Oregon Democrat, and several Republicans have done. But, my sources say, there seems to be little White House appetite at this moment for ousting Geithner, who certainly has no plans of his own for a fast exit.  Expect him to stick around until at least November 2010.

And why would Obama cut him loose when doing so would be tantamount to a vote of disapproval in his own economic policies?

No one has charged Geithner with going rogue, after all. So blame the model, not the man, if you must. Not to mention a quick hook would stink of panic. Top cabinet secretaries of first-term presidents rarely leave before the midterm elections.

Nor does Geithner have much to fear from a whisper campaign to put JPMorgan CEO Jamie Dimon in the job, according to insiders. Despite the rumors, Dimon doesn’t want the gig. What banker would, given the current populist political climate?

It seems unlikely that radioactive Wall Street will be supplying Geithner’s eventual successor. More likely candidates: Rahm Emanuel (he of the frequent phone calls to Geithner), White House chief of staff; Janet Yellen, president of the San Francisco Federal Reserve; Lawrence Summers, director of the National Economic Council; and Roger Ferguson, CEO of TIAA-CREF and former Fed vice chairman.

But the calls for Geithner’s resignation, as well as stunts like the Congressional Black Caucus blocking a key House committee vote on financial reform, indicate a degree of desperation among congressional Democrats. They see high unemployment and dissatisfaction with Obama’s scattered focus on the issue as driving the anti-incumbent mood.

Unlike in sports, in government it’s the players, not the coach, who gets fired. And that’s why some Dems think one way to save their jobs in 2010 is by suggesting that Geithner lose his today.

Comments

Your hire a coach to work with the worst team in the conference and then less than one year into his coaching you want to fire him because he is not in line for winning the entire championship? We are in a real mess and doing better. Everyone knows jobs come back last; business has to rebound before the jobs are created/resumed. I don’t like bailouts; but I like another depression less. Let the man work, he’s making progress in a tough world/national situation with no easy solutions and pain cannot be avoided– we are way overdue for some reality. Start working on another CCC to tide us over and improve our land and infrastructure for the better. Politicians need to do something and stop looking for scape goats to shift attention to because they have no real contributions to make themselves– both Rs and Ds. If any politician gets fired he/she probably deserves it for not leading toward something positive and tangible.

Posted by lindy | Report as abusive
 

Geithner has been drinking from the same bong as Summers and Greenspan. His thought process is corrupt and he is unable to objectively fix what he himself was guilty of breaking in the first place. Get him and Summers out of Washington. Obama’s plan is failing. If he continues to ride the current horses past January 2010 – he will own the second dip in the economy – and it won’t be pleasant from there on.

Posted by atila | Report as abusive
 

Although I would place Geithner’s picture next to the definition of “cognitive capture” in the dictionary, the possible replacements mentioned are even worse.And I thought we couldn’t go downhill from here…

Posted by StevenKs | Report as abusive
 

To Lyndi, very nice analogy but the economy doesn’t work like that. The discectomy you putting together about the poor performance of “Turbo Tax Tim” just simply deviates from the reality.When BHO hired “Turbo Tax Tim”, a new team was brought to replace the previous one. “Turbo Tax Tim” knew what was jumping into…. please don’t try to put him as a hero or the victim. If he can’t do the job, he needs to move aside and let some one with the brain and the guts do job.I voted for BHO and I regret it every day… you talking about a deeper depression, that exactly where we are heading to for all the bailout and all the money gets printed very day !And how do you think all this is going to get paid… TAXES …. MORE TAXES are on its way. Do you think only the rich is going to pay for all that …. Oh pls, you and I, and the rest of the American going to pay the massive debt has been created over the last 12 months… This administration has been the worst ever …Welcome to the Banana Republic run by a bunch of crooks and incompetents !!!

Posted by NoBama | Report as abusive
 

Lindy– nice try as Geithner apologist and you are entitled to your opinion, but not your own facts. Geithner was NY Fed President during the meltdown, he had a grandstand seat watching the orgy of risk at the NY money center and investment banks that lead to the systemic collapse. On his watch Bear Stearns and Lehman imploded and Citibank became a zombie. He was an architect of the Paulson TARP, he was a tax nonpayer at IMF. He has no business ever being Secretary, and yet Barry O appointed him Secretary and the Senate confirmed. Since january, there was really little the Treasury Secreatry could do, and yet he has done everything WRONG. He has signed off on the orgy of debt issued by Barry O and the Congressional Dems and watched the Dollar tank, he has disgraced himself by calling for debt reduction while doing the opposite, and addng nothing to public discussion other than the Barry O mantra of it’s Bush’s fault. He is spineless and gutless. He can’t go fast enough.James– Yassou. Replacement won’t be Ferguson — daily Union protests at TIAA headquarters on Third Avenue, won’t be Summers because of the whole women and science nonsense at Harvard, probably will be woman and lifetime Dem Yellen.Can’t be worse, probably won’t be better.

Posted by NK | Report as abusive
 

Getting rid of Geithner is a grave mistake. IF it was not for his leadership we would be in a MUCH worse position. People are so stupid.

Posted by Frank Henry | Report as abusive
 

you forgot the /sarc tag frank….

Posted by t | Report as abusive
 

Why won’t everyone admit that EVERY Obama cabinet appointment is simply a means of repayment of a debt. He owed them all and repayed, as promised. Although in some cases, not for long. (The wheels of the bus, and all…)When looking at things with this knowledge, there is nobody in the administration who is truly capapble of doing their appointed job.

Posted by Joey Muldoon | Report as abusive
 

Those Democrats in Washington are going to get a big surprise come 2010. When they join the ‘funemployment’ line.

Posted by GarandFan | Report as abusive
 

“If anyone in the US media had thought to ask a former Australian prime minister for his assessment, they would have heard a different view. And they would not have been so surprised at Geithner’s performance since.In a speech to a closed gathering at the Lowy Institute in Sydney on Thursday, Paul Keating gave a starkly different account of Geithner’s record in handling the Asian crisis: “Tim Geithner was the Treasury line officer who wrote the IMF [International Monetary Fund] program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis.””In other words, Geithner fundamentally misdiagnosed the problem. And his misdiagnosis led to a dreadfully wrong prescription.”Sydney Morning Herald MARCH 9 2009Gee, why is anyone surprised by this? Don’t Democrats read the news anymore?

 

Blaming Geithner, or Paulson, for the great panic of 2008 is absolutely insane. Bears and Lehman were ruined when giant banks around the globe began reporting huge mortgage losses, securities where both Bears and Lehman were heavily invested. Then, behemoth banks, hege fund managers, and overnight financiers panicked and began yanking their financing from investment banks like, Bears and Lehman, who were heavily invested in these securities. It was nothing short of a good ol’ fashion panic; only this time it hit the unregulated, grossly leveraged investment houses. In unprecedented fashion, Geithner, Paulson, and Bernanke used the powers of the Fed to rescue the entire financials industry. Their alleged bailout of Bear Stearns did little more than protect Bears’ creditors and the global financial system. Bears shareholders and employees lost billions!! Look at what happened when Paulson couldn’t stomach being castigated again in the press and let Lehman fall: the down plunged over 500 points and the recession was on in earnest! Could you imagine what would have happened if Bears, Lehman, Merrill Lynch, AIG, and Fannie and Freddie were all allowed to go under? Lehman alone tanked the markets over 500 points!! If these institutions defaulted on ALL of their contractual obligations, commercial banks all over the world would have been ruined! You think 10% unemployement is bad, which we had in 1982 under Reagan, try the 30% and up we had in the great depression. That’s where we we’re headed but for the courage of these guys to take extraordinary steps to save us. If Greenspan had acted with similar aplomb, and taken the air he knew existed out of the housing bubble, it probably would never have come to this. The simple truth is that capitalism, like everything else, fails every now and then. And those who save us from its uncommon failures shouldn’t be pilloried by a bunch of brain dead politicians, many of whom thought that Enron and it’s real crooks were great guys!

Posted by Chad Swenson | Report as abusive
 

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