Tim Geithner is only one man

Posted By Daniel W. Drezner Thursday, February 26, 2009 - 10:11 PM Share

During the first month of the Obama administration, there have been a few proposals coming from the Treasury Department, and it's safe to say that markets have not been too thrilled about them. A large part of that is because the proposals are so vague and opaque that even Felix Salmon is having difficulty interpreting them.

To be fair to Geithner, however, it's not like he has a lot of help. Check out this Treasury web page listing all of the political appointees at Treasury.

ABC's Matthew Jaffe reported in fuller depth on this problem earlier in the week:

Treasury has not moved quickly enough to fill key positions -- such as deputy secretary, various undersecretary posts, and general counsel -- which may have contributed to a lack of details in Treasury's plans, which in turn caused a dive in the stock market.
"If the secretary had a full staff he would've been in a stronger position to work out the details, so I'm sure that has been part of the problem," West said....
Some analysts believe Geithner is suffering from the lack of a complete staff at his disposal.
"It's an overwhelming job even if you have a full staff, and that's certainly not yet the case," said Rob Nichols, president of the Financial Services Forum.
Nichols, a former Treasury spokesman, estimated that right now Geithner "probably has 10 or 20 percent of the political appointees around him that he ultimately will have."
"Treasury is not moving fast enough," West said. "Given all of the enormous economic and banking challenges that we face, we really need a full team on the field."

The story gives a couple of possible reasons -- the new ethics rules, difficulties with vetting -- but they don't really pass the smell test. What I don't understand is why the Obama White House is not making this staffing issue its first, second, and third priorities right now. Given the gargantuan tasks facing Treasury right now, I guarantee that the deputy and undersecretary positions at 1500 Pennsylvania Ave. are far more important than the Secretary of Commerce.

I woked at Treasury during the last transition, when it took close to six months to get the Deputy Secretary confirmed. It was.... a difficult time, to say the least. And that was when countries like Argentina and Turkey were in trouble -- not all of the the OECD and the BRICs.

Paul Volcker is pretty angry about this -- as well he should be. But the person he should be angry at is his boss.

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MDREW

7:02 AM ET

February 27, 2009

Wall Street is his brain trust

The last thing Geithner needs is to pile a bunch of management headaches on top of trying to chart a course out of this. Everyone wants and needs him to succeed; I think we can assume he can get anyone on the phone or in his office whose advice he feels he needs at a few minutes' notice. If he felt staffing was the top priority, I think he'd be on it.

BLUE13326

9:03 AM ET

February 27, 2009

I'm getting the sense that

I'm getting the sense that pretty soon it may be too late to avoid a full-blown global meltdown.

We're going to be floating all this debt right when countries like Italy, Spain, Greece, and Ireland are on the edge of default. Who is going to buy these countries' debt when there's a huge supply of US bond issues out there saturating the market? Once these countries face a buyers' strike, this will almost certainly push them into default. And the EU doesn't have a mechanism to deal with this; so, do they leave the euro and face the huge costs associated with this, does Germany pick up the tab while its own economy is shrinking at an 8%+ annual rate, or what? And what would be the knock-on effects of whatever extraordinary measures that would be taken to save these countries?

DON S

1:00 PM ET

February 27, 2009

Full-blown global meltdown?

That seems a trifle overstated to me. More crisises to be sure. We may see countries in Europe and perhaps Argentina default, although Germany seems finally to have seen the light, and is talking about helping to support the countries which it exports to.

The reason that the German economy shrank 2% last quarter is that external demand is collapsing for the machine tools and prestigious consumer goods which Germany exports in such quantities. Weak domestic demand cannot absorb the production, so order books shrank 25% in 2008. Many Germans believed they could sit tight in Festung Deutschland and let the world around them rot, but thus far the big exporting countries have been the worst-hit by the depression. This was predictable to anyone who has studied the impact of the Great Depression to any depth, but Germany has been seemingly strong for so long that they could not see that they are as dependent on their markets as the markets are on them. More dependent, really.

BLUE13326

11:25 AM ET

February 28, 2009

Obviously I hope you're

Obviously I hope you're right, Don. And the Germans seem to be in the early stages of accepting that they're going to have to step up in a big way if Europe is going to avoid collapse (and maybe even with Obama's election, the reflexive tick of blaming America over there might calm enough for them to act responsibly). The question seems to be what happens to the monetary union if we see several European countries default.

In an odd way, this crisis may actually serve to restore the US dominance in a unipolar world. If we float all this debt, and it sucks up most of the buyers, this is going to be at the expense of other countries; maybe the new world order is all about who can get investors to finance their debt. Of course, this depends on Obama not giving the game away, and agreeing to some prudence on spending. Certainly, Russia, for example, isn't going to be reclaiming its Soviet glory anytime soon.

BUZZ KILLINGTON

3:40 PM ET

February 27, 2009

Now let's let em run

Now let's let em run healthcare too!

In seriousness, this sounds like pretty common poor management style that you see in corporations all the time. People in charge put insufficient priority on the number and effectiveness of their workforce. They just think in terms of *what* needs to get done, rather than *how* to get them done. You know, fewer people just need to work a little harder, and magically do multiple things at the same time.

Then on top of that, add the huge overhead of it being the government, where the best you can ever hope for is just not quite awful. On the bright side, there's a chance the staffing problems could decrease the damage they're doing a little bit. Maybe... I hope.