Out of all the failures that the Bush administration oversaw, I suspect the economic collapse that we are witnessing now will probably end up being the biggest. Yes, I think it will eclipse the Iraq bungle just for the sheer size of this disaster. Every country across the world has been affected to varying degrees. It has the potential to get worse, and probably will, before it gets better. Saying that, I hope that most of the blame gets shoved over to current Secretary of the Treasury Henry Paulson. He deserves much of the blame.
Thanks to Paulson, Obama’s nominee for the post will have his hands full from day dot. Timothy F. Geithner is Obama’s pick for the spot and, from all accounts, it’s a real good one. My bashing of Paulson might seem a little contradictory, as even Paulson endorses Geithner, saying he is a ‘very unusually talented young man…[who] understands government and understands markets.’ I suppose being endorsed by the current Republican treasury secretary is a good thing. But being endorsed bu Henry Paulson is not.
Anyway, let’s take a look at Geithner’s track record. He’s quite young – 47 years old. I’m hoping that this means a new, more modern and fresh approach to economics will be a hallmark of the Obama fiscal team’s legacy. It’s time things were reevaluated, if only to see how time, invention, and prosperity in the West has changed things. In his short time as an economics professional, he has already worked in the Treasury Department. In 1988 he joined the international affairs division in the department, working his way up to become deputy assistant secretary for international monetary and financial policy from 1995-96, then senior deputy assistant secretary for international affairs from 1996-97), and then finally the assistant secretary for international affairs from 1997-98. If he was appointed on track-record, then Obama was looking for someone with an international mind and focus for monetary policy. Remember back to Bill Richardson, and how I wrote that he too was an internationally-minded fiscal appointment? Are we starting to see a trend? People bringing different objectives to the Obama table? I’ll have something more to say about this later on in the post, but just keep it in mind.
Geithner was eventually promoted to Under Secretary of the Treasury for International Affairs from 1998–2001, working beneath Clinton Treasury Secretaries Robert Rubin and Lawrence Summers. It’s reported he learned a great deal from these two. That he might try and emulate President Clinton’s fiscal success over the years is not a bad thing at all. During all his time at the Treasury, from 1988 to 2002, he helped resolve many an international monetary crises in Brazil, Mexico, Indonesia, South Korea and Thailand. That he was educated on the job in the middle of world economic problems means we have a guy who isn’t going to hit the panic button when he is dropped into the mess that’s going on now. The US (well, the world) needs someone who can hit the ground running, and this is the man for that job.
Continuing a trend of international focus, he left the treasury in 2002, going to work as the Senior Fellow in the International Economics department for the Council on Foreign Relations, then onto the International Monetary Fund as the director of the Policy Development and Review Department.
After this distinguished career, he was named New York Federal Reserve Bank president, from 2003 to the phone call he got from President-elect Obama. Going with this job, he became the vice chairman and a permanent member of the Federal Open Market Committee (FOMC), the group responsible for formulating the US’ monetary policy. He was a factor in bailing out the collapsed companies Bear Sterns and AIG, and also a factor in not Lehman Brothers. Some of his detractors will use these three examples against him in his confirmation hearings I suspect.
There were two great things that I read about him. The first is that he feels the Treasury Department needs to try new, experimental ways of handling the economy. Because the US is so free market, and has been for years, if they want to try something new perhaps they should turn to us “socialist” Australians for some ideas. I guess we have got it sort of figured out, seeings we will be one of the few countries to show growth or surplus next year.
But the second, and more intriguing is this: he went to Dartmouth College, gaining a B.A. in government and Asian studies in 1983, and from the Johns Hopkins School for Advanced International Studies with an M.A. in International Economics and East Asian Studies in 1985. He has studied Japanese and Chinese and has lived in East Africa, India, Thailand, China, and Japan. Why do I emphasise all this? Because Geithner, with his international focus, has at least one eye on Asia. Remember how I said that Obama wants to look to the domestic economy for answers and Richardson wants to look to NAFTA and Latin America for solutions? Here’s a third party that brings another view to the table – Asia. You can’t ignore to potential and growth in the region, and America certainly shouldn’t. If you have three different minds working on a variety of solutions from the biggest growth areas available, inevitably you are going to find a mixture of solutions that is going to get things moving. On this front, I resoundingly applaud the Geithner appointment – not just for economic policy, but for the political fortitude and ideals that Obama is representing. He’s bringing together not just yes-men, but independent minds and different authorities.
Anyway, I expect good things from Tim Geithner. He is a good, solid, sound appointment. He has a terribly hard task ahead of him, but I think, out of the field of candidates that I read about, he is the one for the job. I can only wish and hope for the best out of him – because it’s not just America that will be looking to him for answers.