{"id":270763,"date":"2010-02-03T10:43:53","date_gmt":"2010-02-03T15:43:53","guid":{"rendered":"http:\/\/blogs.reuters.com\/james-pethokoukis\/?p=3329"},"modified":"2010-02-03T10:43:53","modified_gmt":"2010-02-03T15:43:53","slug":"the-next-treasury-secretary-will-be-%e2%80%a6","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/270763","title":{"rendered":"The next Treasury secretary will be \u2026"},"content":{"rendered":"

Well, Simon Johnson<\/a> thinks it should be Tom Hoenig<\/a>, president of the Kansas City Fed:<\/p>\n

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  1. He\u2019s currently the only senior Fed official who has been outspoken<\/a> (or even spoken out) against banks that are undoubtedly Too Big To Fail (TBTF). \u00a0Hoenig has been a beacon of clarity<\/a> on this issue over the past year.\u00a0 Compared with central bank officials \u2013 and almost everyone else \u2013 Hoenig stands out as a model of straight thinking and a proponent of tough action<\/a>.\u00a0 With his disarming but no nonsense\u00a0approach, he is the perfect person to take on the likes of Lloyd Blankfein (Goldman Sachs) and Vikram\u00a0Pandit (Citigroup) both in the corridors of power and in the nitty gritty of their rather sordid business models.\u00a0 Hoenig is a career bank supervisor and nobody\u2019s fool.\u00a0 Blankfein and Pandit are just two more guys who run banks that have gone bad.\u00a0 You know how that movie ends.<\/li>\n
  2. Hoenig, who sits on the Federal Open Market Committee<\/a>, is also an inflation hawk<\/a> \u2013 at least by today\u2019s standards.\u00a0 This makes some would be supporters \u2013 including fans of his attitude on TBTF\u00a0\u2013 rather wary of advancing his name (e.g., as chairman of the Fed Board).\u00a0 This hesitation is understandable although likely mistaken; you don\u2019t keep the federal funds rate essentially zero for long when nominal GDP is growing at more than\u00a0a 6 percent annual rate.\u00a0 In any case, the issue is irrelevant for the Treasury job.\u00a0 The Treasury Secretary\u2019s responsibility in a modern administration is to run financial sector policy, meaning bailouts and how to avoid them.\u00a0 Peter Orszag has the budget and Ben Bernanke (gulp) holds the monetary tiller.\u00a0 What we desperately need is someone who can sort out our largest banks.<\/li>\n
  3. Tom Hoenig is almost certainly a Republican, although \u2013 as head of a regional reserve bank \u2013 the full range of his views, outside of banking and money, are not widely known.\u00a0 Paul Krugman reasonably points out<\/a> that if he (Krugman) were nominated\u00a0for the Fed (or Treasury or anything else), this would likely run into trouble in the Senate.\u00a0 Hoenig\u00a0is a completely different kettle of fish, appealing to sensible Democrats and Republicans \u2013 yes, there are a few \u2013 who increasingly worry about massive banks and their electoral implications.\u00a0\u00a0And while financial sector policy is job one, serious efforts to address the budget \u2013 led by people of all ilk with a strong grip on economic realities \u2013 also lie in our future.\u00a0 Either that or the republic will perish.\u00a0 Not a tough choice in the end, but it does need to involve at least a few Republicans.<\/li>\n
  4. He\u2019s a Republican.\u00a0 See point 3 above, and remember that President Obama offered Senator Judd Gregg (R., New Hampshire) the position of Commerce Secretary at the beginning of his administration.<\/li>\n
  5. The market will react negatively, because it will sense the era of unlimited bailouts is drawing to a close.\u00a0 Sure, but that\u2019s the point.<\/li>\n
  6. He\u2019ll be captured by Big Finance, just as Geithner was. Spend some time with Tom Hoenig before you jump to this conclusion.<\/li>\n<\/blockquote>\n<\/ol>\n

    There will be objections to be sure.<\/p>\n

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    • He\u2019s just a regional Fed governor. True, but so was Tim Geithner.<\/li>\n
    • He\u2019ll be captured by Big Finance, just as Geithner was. Spend some time with Tom Hoenig before you jump to this conclusion.<\/li>\n
    • The market will react negatively, because it will sense the era of unlimited bailouts is drawing to a close. Sure, but that\u2019s the point.<\/li>\n
    • He\u2019s a Republican. See point 3 above, and remember that President Obama offered Senator Judd Gregg (R., New Hampshire) the position of Commerce Secretary at the beginning of his administration.<\/li>\n<\/ul>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"

      Well, Simon Johnson thinks it should be Tom Hoenig, president of the Kansas City Fed: He\u2019s currently the only senior Fed official who has been outspoken (or even spoken out) against banks that are undoubtedly Too Big To Fail (TBTF). \u00a0Hoenig has been a beacon of clarity on this issue over the past year.\u00a0 Compared […]<\/p>\n","protected":false},"author":1063,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-270763","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/270763","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/1063"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=270763"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/270763\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=270763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=270763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=270763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}