I'm giving him another month [UPDATED]

Posted By Daniel W. Drezner Sunday, March 8, 2009 - 5:10 AM Share

When Paul Krugman and Megan McArdle agree on Obama/Geithner's lackluster reaction to the economy, that's usually a good sign to go long on duct tape and shotguns. And this Brad DeLong post doesn't make me feel much better -- because I think he has the political economy just about right.

Still, I'm going to wait a month before allowing my freaking out flag to fly. Why? Because in the time that Barack Obama has been forced to react in real time, I've noticed two tendencies:

He tends to take his own sweet time in making decisions;
Those decisions have usually worked for him.

So maybe a month from now Treasury will actually have some appointments besides Geithner, and markets will be more certain about what Obama is planning to do. If these things don't happen, however, I have every confidence in my commenters saying, "I told you so."

UPDATE: OK, now we're seeing some movement! This Reuters story lists three incoming nominees at the assistant secretary level. It also explains the dithering at the more senior levels:

On Thursday, sources said former Securities and Exchange Commissioner Annette Nazareth withdrew from consideration to become a deputy Treasury secretary for personal reasons and that she would remain in her private securities law practice.
In addition, Geithner's choice for international affairs undersecretary, Caroline Atkinson, also pulled her name from consideration. Atkinson, a senior official at the International Monetary Fund, has decided to remain at the institution, a person familiar with the decision said.
Both Nazareth and Atkinson had been vetted for the jobs but had not been formally nominated.
Lee Sachs, also currently a counselor to Geithner, is widely considered a top contender for undersecretary for domestic finance, but also has not been formally nominated.

One wonders if the reasons for the withdrawal have to do with the people involved or the rigors of the vetting.

EXPLORE:ECONOMICS, FINANCIAL MELTDOWN, OBAMA, TREASURY

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BLUE13326

11:57 AM ET

March 8, 2009

Another month of this and I

Another month of this and I won't have the heart to say 'I told you so,' and it's way too early to count Obama out. If the market just got back to where it was last year when Obama was nominated, that would be around a 75% rise from here, and he'd be hailed as brilliant and likely re-elected. And remember, it took Clinton awhile to learn that the bond market really is the master of the universe, and change his policies accordingly.

But that DeLong post is so bogus I was embarrassed for him when reading it. The notion that McCain would have had a similar response to the crisis requires one to believe that McCain would have had a trillion dollar 'stimulus' bill that largely awarded billions of dollars to left-wing groups and new entitlement programs, and did next to nothing to stimulate the economy near-term (and would enact policies that prevent new areas of energy exploration and usage, which practically guarantees that when the economy does recover, oil is going back to $150/b). There's no evidence at all for this. The market has fallen 18% in just the few weeks since this bill was announced, that's nearly the fall of an entire bear market in just a few weeks. Obama's announced around $4t in spending in just the first few weeks of his administration; there's no way McCain would have come anywhere close to that. And, if McCain had won, we'd have a split government, so there would have to be some compromise, which has been largely absent (and the political/chattering class likely wouldn't be spending their time talking about that moron Limbaugh while the market/economy burns down around us).

As I previously posted, Obama can spend 10, 20, even 30 trillion of our kids' dollars to try and stimulate the economy, but if this has the (rather obvious) effect of raising the cost of capital, then it's not going to do much except run up debt. We've been lucky in that we've benefited from a flight to safety, but he seems determined to throw this lucky break out the window.

BUZZ KILLINGTON

11:31 AM ET

March 9, 2009

I assume all those people

I assume all those people pulled out because they actually pay their taxes.

Anyway, the more action the government takes, the more harm will be done to the markets. That's the general rule, and especially rings true over the past few months. The best we can hope for is that they won't prolong the recession too much.

DON S

6:59 PM ET

March 9, 2009

The vetting is the problem.....

I think we've gone too far with the vetting process, far enough that good people who would be willing to work for the government don't wish to go through it.

These people often take a pay cut to go into government, and their reward is to have their lives gone through with a fine-tooth comb to establish whether they have always been perfect. Have they always kept the books pristine while paying the nanny or the au pair? Up to date with all taxes, including the taxes they didn't know they owe?

It can get even worse if they get into office. These undersecretaries or chiefs of staff can get a special prosecutor of their very own. Not only Hillary Clnton, but Henry Cisneros and Scooter Libby got special prosecutors with unlimited remits to dig into everything. Every time a New Gingrich, a Bob Livingston, or some poor sucker of an Deputy Undersecretary gets plonked onto the Washington gas grill I think the percieved rewards of public service shrink.

I thought the case of Scooter Libby marked a critical turning point. This guy is not only bankrupt now but cooling his heels in jail. Nothing he did would have merited either - if only he'd had the sense not to work for the hated Cheney. The Cheney-haters couldn't get the big game - so they settled for crushing his chief of staff utterly as a surrogate.

But let's not see political blood sport as a purely Democratic practice when it's actually a bipartisan thing. Vince Foster ate a handgun when the pressures got too much, Cisneros lost a wad of money and his dream job, Hillary went through hell, too.

We have to change this. Perhaps we need to fund 'public defenders' for officials as well as for prosecutors? Perhaps we need to rachet down the penalties for having loose lips, for making a bloody mistake?!

Think about it.....

BARRY

10:57 PM ET

March 9, 2009

Ah, Well

Daniel, I was going to comment - I even registered here.

But 3 out of 5 of the commenters here are liars; I've found that that high of a proportion makes the comment thread worthless.

Ah, well.

DANIEL W. DREZNER

11:41 PM ET

March 9, 2009

Don't cut and run!