We Can Only Hope
By Yves Smith suggests, in light of this NYT front-pager, that the administration may be distancing itself from Geithner. Unfortunately they may be drawing the wrong implications:
Thus what is surprising about tonight’s New York Times story, “Member and Overseer of the Finance Club,” on Timothy Geithner is not its content, but that it was written at all, and moreover (as of now) is a front page item. It’s extraordinarily long for a weekday story. the number of column inches usually reserved for natural, not bureaucratic disasters.
Any reader of any remotely plugged in econoblog, or savvy enough to read between the lines of MSM reports will know that Geithner is a creature of the financial establishment. Probably the most important element in his pedigree is that he is a protege of Larry Summers and Bob Rubin. It also appears that he and Summers are working fist in glove (witness the marginalization of Paul Volcker).
At a minimum, Geithner crony capitalist policies are finally leading to a hard look at his loyalties. There is no reason to think Geithner is personally corrupt (well, there was his little tax problem) but rather that he is as die hard a believer of finance uber alles as Alan Greenspan, albeit without the libertarian zealotry.
Of course, if one were Machiavellian, this move may be Team Obama realizing rather late that they have made the success of Obama’s presidency contingent on the Summer/Geithner program, and now they are trying, even more so than before. to pin the policies on Geithner.
As Smith says, if that last speculation is true, it’s really bad politics. If Geithner and Summers fail, Obama takes the hit. (And, for that matter, he should — he hired them.) If the plan fails, it badly hurts the incumbent party, period — pin-the-blame-on-cabinet-secretary is a parlor game only of interest to insiders. If Obama thinks that their plan isn’t working, he needs to get rid of them.