After the resolution of the debt-ceiling impasse, rumors have been flying that the last senior member of Barack Obama’s original economic team will call it quits. Treasury Secretary Tim Geithner refused to answer questions about his plans yesterday on ABC’s Good Morning America, which doesn’t exactly sound like a man planning on staying in the job much longer:
Speculation is rife in Washington that Geithner, who has outlasted all of President Obama’s other original economic advisors, will resign now that the nation’s borrowing capacity has been extended to 2013 and a 10-year, $2.1 trillion deficit-reduction agreement enacted.
Geithner’s consideration of a return to New York, where he formerly headed the Federal Reserve Bank of New York, was first reported by Bloomberg News in late June. As recently as Tuesday, he told ABC’s Good Morning America that “I haven’t made that decision yet.”
Who has the inside track to replace Geithner? USA Today says it might be an ultimate insider:
One name being floated is that of Jon Corzine, the former New Jersey governor and senator and Goldman Sachs CEO, who now heads up MF Global. As a former member of the Senate, Corzine probably would enjoy a swift confirmation process.
Well … maybe. Corzine didn’t exactly build an impressive track record while serving less than a full term in the Senate. Corzine ran for and won the gubernatorial election in New Jersey in the fifth year of that single term, leaving after just one notable accomplishment: co-authoring the Sarbanes-Oxley Act in the aftermath of the Enron debacle. Corzine also ran the DSCC for two years, which probably would leave at least a few scores to settle among some Republicans currently serving.
More to the point, though, Corzine’s association with Goldman Sachs will be a political headache for Obama at a moment when his base is already in rebellion over the debt-ceiling deal. That connection would increase Obama’s credibility on Wall Street, but that’s the problem on the Left, too, and not just on the Left. There is plenty of suspicion across the political spectrum over the influence of Goldman Sachs on American economic policy over the last 15-20 years — and their favored treatment from Washington that hardly seems coincidental. Just two weeks ago, Reuters reported on a conflict of interest arising between Geithner, Goldman Sachs, AIG, and bailout money:
Treasury Secretary Timothy Geithner, while head of the New York Federal Reserve Bank, granted a waiver that allowed his eventual successor William Dudley to hold on to investments in firms getting emergency help.
Dudley, a former partner at Goldman Sachs who at the time ran the New York Fed’s powerful markets desk, was allowed to maintain his financial stake in insurance giant AIG, whose government bailout helped prop up investment firms like Goldman Sachs.
Expecting an easy ride for Corzine is an expression of irrational optimism. Given how the last Obama-Corzine partnership performed — Obama campaigned for Corzine, who got thumped by Chris Christie almost two years ago — expecting him to get the appointment at all might also tend towards the long shot.