“Timothy Geithner, President-elect Barack Obama’s choice for Treasury secretary, has some explaining to do.” — editorial, New York Times, 15 Dec. 2008
“President-elect Barack Obama’s economic team is drawing mostly rave reviews, but some see too much of the old regime that helped get us into this mess. In particular, Lawrence Summers and Timothy Geithner, nominated for the respective positions of National Economic Council Chairman and Secretary of the Treasury, have some explaining to do.” — the old version of this blog, circa 26 Nov. 2008
(No no no, I’m not accusing the Times of copying me. If only.)
The Times‘ main beef with Geithner is that the Fed has been less than forthcoming, maybe less than truthful, in explaining why they let Lehman Brothers go bust and then bailed out AIG two days later. The apparent inconsistency in saving one and not the other is one thing, maybe forgivable in view of what unchartered waters these were, but making up bogus excuses about a lack of legal authority to help Lehman is worrisome.
My beef had been about (1) Geithner’s drafting of the AIG bailout itself, which seemed to give no-strings-attached bailouts a bad name, and (2) his history as a protege of the deregulation-happy Robert Rubin in the Clinton Administration. Chris Whalen, via Naked Capitalism, has the rundown on (1).
Overall, I’m confident that Geithner, as reported, is a bright guy who learns from his mistakes and, as president of the New York Fed, knows the tools of the trade as well as anybody. And I doubt there’s anyone of similar experience whose record is spotless. But the Senate will have to grill him on these matters.