Monday, May 18, 2009

Knives Coming Out for Geithner (and Obama Gets a Scrape) as PPIP Delay is Quietly Announced

The Washington Post has published an important piece blasting Tim Geithner that also provides the first evidence I have seen that the Public-Private Investment Program (PPIP) is going to be delayed. In At Geithner's Treasury, Key Decisions on Hold, there is the statement that:

Announced in early February, it (PPIP) may not launch until July, officials say.

Here are some of the specific criticisms, some of which are body blows:

But some of the officials also cite the Treasury's ad-hoc management, which is dominated by a small band of Geithner's counselors who coordinate rescue initiatives but lack formal authority to make decisions. Heavy involvement by the White House in Treasury affairs has further muddied the picture of who is responsible for key issues, the officials add.

I list this first because the second sentence above is an indirect but specific criticism of the Obama style of micromanagement. Comparison to Jimmy Carter is obvious. More on Geithner:

In March, Treasury officials clashed over a $15 billion initiative to use money from the federal bailout package to free up credit for small businesses. Geithner's counselors pressed to announce the program quickly, despite protests from the career staff members who said it would not work. Unable to raise the issue with Geithner himself, the staff members appealed directly to the White House but were rebuffed, according to sources familiar with the episode.

President Obama announced the program two months ago, and it is still struggling to get off the ground. Officials are looking to overhaul the proposal.

The Post goes on to criticize Geithner for micromanagement which is also ineffective:

And in the wake of the public firestorm over bonuses paid by American International Group, senior Treasury officials have been meeting several times a week all spring to review, one by one, the payments to the company's executives. But the time-consuming discussions have never resolved whether any of the executives should get paid.

Extraordinary. These guys are wasting their time reviewing individual bonuses- and not even making decisions?


Still, some lawmakers and government officials said Geithner needs to be a stronger manager.

"No one knows how to get decisions made," said a senior government official familiar with the Treasury's inner workings.

The Post resumes the themes of White House micromanagement and related neutering of Geithner:

. . . the difference between the Treasury of former secretary Henry M. Paulson Jr. and Geithner's has been stark. Under Paulson, the department nearly always made its own decisions. The Bush White House, nearing the end of its tenure, hardly intervened.

But now, even minor matters, such as Web site design or news releases, are reviewed by the White House. Staff members detailed from the National Economic Council, reporting directly to Obama senior economist Lawrence H. Summers, roam the Treasury building. Treasury staff members working on restructuring the nation's automakers took much of their direction from the NEC, sources said.

Serious stuff when some at least implicit if not explicit comments favoring Bush/Paulson over Obama/Geithner make it into a WaPo article.

The article finishes with devastating comments about Geithner:

"People think he's very, very smart, but he has not exerted a management presence yet," added a source familiar with the Treasury's inner workings.

"He has not exerted a management presence yet." Wow. Finally:

"He's being stretched in a thousand directions . . . but I don't know if that absolves him of responsibility for management."

Yesterday, the Post, which is an unofficial house organ of the Democratic Party, wrapped the Pak-ghanistan War in the Flag, as commented upon here in Economy Due to Suffer as War Drums Beat More Loudly. The op-ed referred to therein was clearly a message from the White House. So, largely, was this article. Timothy Geithner is in over his head. This article strongly suggests that the powers-that-be in the administration are dissatisfied with his managerial competence.

Will Mr. Geithner declare victory over the financial crisis and move on to a lucrative job in Big Finance?

Copyright (C) Long Lake LLC 2009

No comments:

Post a Comment