Timothy Geithner Tapped To Be Treasury Secretary

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Timothy Geithner, president, Federal Reserve Bank of New York, was named President-elect Obama’s pick to run Paulson’s recreation of the “all-powerful” Treasury Department. Geithner will inherit more power than any other Cabinet post in my opinion and yet he is the least experienced.

Obama Picks a Clone To Run Treasury

Obama and Geithner have a lot in common. Both are young and inexperienced. Both are highly educated and have “unflappable” demeanors. Given the similarities, I can see why Geithner got tapped to be the new chief at Treasury.

Geithner is expected to breeze through confirmation and by all accounts hit the ground running when Obama takes office.

Paulson and Geithner Meeting

I have a few reservations…

One, as the president of the New York Fed, I feel he has too cozy a relationship with Wall Street much like Hank Paulson.

Two, he started his political career working at Kissinger and Associates, only to move on to positions at the Council on Foreign Relations and the IMF.

Third, he is a globalist and was the architect of the Bear Stearns bailout which indicates a belief in our current “corporate welfare” system of capitalism.

Lastly, on the current financial crisis, Geithner’s views were reported in MarketWatch.com as,

“Broad changes in financial markets may have contributed to a system where the probability of a major crisis seems likely to be lower, but the losses associated with such a crisis may be greater or harder to mitigate,” he said.

He compared unraveling all risks to “unscrambling an egg.”

The Fed cannot monitor or control all the risks that have arisen, Geithner told his audience, nor can it “act preemptively to diffuse” stresses in the system. The best the Fed can hope for, he concluded, is to beef up the “the shock absorbers.”

“We Don’t Need No Stinkin Shock Absorbers”

These defeatist opinions are not the opinions I’d want coming from the guy tasked with the clean up. We don’t need “shock absorbers”. We need a strong regulatory over-haul, a mandated nation-wide loan modification program, and a monetary policy that does not depend on running the Fed’s printing press 24/7 to stabilize the system.

In short…we need to restore Confidence …with a capital C…on Main Street as well as Wall Street.

Hank Paulson oozed buckets of flop sweat and stammering explainations on the Sunday talkshows and in testimony before Congress. He got the $750 billion despite his lack of confidence…then told everyone he changed his mind how he’ll spend it. We were right not to trust this cross between Elmer Fudd and a human sweat gland, but he was the only game in town….and the town was under attack. So we were told…

The result is nobody is sure what is going on…least of all Paulson himself.

If the new guy can’t find a plan that’s even-handed, that addresses the American home owner’s concerns, and not just the fat cats on Wall Street, he’ll be dead on arrival too.

If Geithner’s views are the same as they were back in February when he made the “unscrambling an egg” statement..he could turn out to be the biggest plunder of the Obama administration and the costliest public officer of all time.

Good Luck!