For all the precious assets Treasury Secretary Timothy Geithner deals with, these days he’s most lacking the one that doesn’t cost anything: confidence.
The perception of how Geithner handled the American International Group bonus issue in recent days has been devastating. The criticism of Geithner as point man for the Obama administration’s recovery efforts has become so sharp it threatens to undermine the president’s entire economic agenda.
If Geithner can’t step up, he might need to step aside.
Geithner says he was blindsided last week by news that Federal Reserve officials apparently knew for months that AIG employees were in line to get millions in bonuses, even as the company took billions in taxpayer money.
Federal lawmakers erupted in a cacophony of accusations and efforts to exact retribution on AIG employees, which was particularly self-serving since those members of Congress should have been watching the store as well.
So, it’s not surprising that the circular firing squad in Washington would train its sights on Geithner. Some lawmakers are expressing doubts about Geithner’s ability to remain effective.
To be sure, Geithner walked into a most difficult situation. With the economy in a freefall, he was charged with leading Treasury efforts to stop, or at least slow, the decline.
However, his efforts have gotten mixed reviews from the start. Last month, the newly appointed secretary outlined a wide-reaching financial rescue plan that could involve $2 trillion.
It was expected to be the big blueprint, but turned out to be a big disappointment. For all the talk of purchasing toxic bank assets, loosening consumer credit and shoring up banks, Geithner didn’t spend much time explaining how it would be done.
The plan was criticized by many, including us, for its lack of detail.
Geithner is laboring, reportedly 15 hours a day, without the usual backup cast of appointed assistants. The Obama administration has been carrying out a meticulous vetting process that has delayed appointments and resulted in some candidates dropping out.
The result has been that Geithner is simultaneously working on several complicated tasks, such as overhauling the bailout program, started by the Bush administration, and overseeing the government effort to save the auto industry.
“Nobody’s working harder than this guy,” Obama said Wednesday, motioning to Geithner. “He is making all the right moves in terms of playing a bad hand.”
Even if that were true, which we doubt, you have to wonder how long the president — and the country — can afford to stick with Geithner as the political losses mount.
