{"id":419805,"date":"2010-03-12T08:27:52","date_gmt":"2010-03-12T13:27:52","guid":{"rendered":"http:\/\/www.theatlantic.com\/business\/archive\/2010\/03\/the-ballad-of-summers-and-geithner\/37404\/?rss=37404"},"modified":"2010-03-12T08:27:52","modified_gmt":"2010-03-12T13:27:52","slug":"the-ballad-of-summers-and-geithner","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/419805","title":{"rendered":"The Ballad of Summers and Geithner"},"content":{"rendered":"

Flights from London to DC via Frankfurt (don’t ask why, just learn from my mistake and never do it) put the recent Atlantic<\/a> and New Yorker<\/a> profiles of Tim Geithner in a good light. Longer than they needed to be, you say? I was wishing they were longer.<\/p>\n

Josh Green was better on Geithner’s character, I thought, and John Cassidy more at home with the economics. Both pieces are well worth reading, regardless of your itinerary. But I have to say that neither really dispelled for me the big mystery about Geithner, which is the nature of his professional and intellectual relationship with Larry Summers.<\/p>\n

When the appointments were first made, I foresaw trouble. Like many others, I assumed that Obama would have wished to make Summers Treasury Secretary, but recoiled at the difficulty of getting him confirmed. So Summers became chief economic adviser while his former subordinate Geithner (whose confirmation turned out to be no stroll in the park either) got Treasury.<\/p>\n

A hazardous arrangement, I thought, though possibly workable, if Geithner was sufficiently self-effacing to accept the  de facto number two position. Summers, I reasoned, never would. But if Geithner decided he was going to be in charge, there would be a fight for influence, the economic message would be muddled, and the loser would have to go. Adding to the danger was the milling profusion of other top economic talent-Volcker, Orszag, Goolsbee, to name just three-in or around the White House. <\/p>\n

This setting reminded me of the fight between Nigel Lawson, the
\nbrains behind the Thatcher Revolution, and Alan Walters, Thatcher’s
\nfavorite economist, in the late 1980s-a calamity I watched at close
\nquarters. Lawson was chancellor of the exchequer when Thatcher brought
\nWalters into 10 Downing St as her personal adviser. They disagreed
\nabout monetary policy; after a period of friction Lawson decided he was
\nno longer trusted to do his job, and quit. You could plausibly argue
\n(and many did at the time) that this was the beginning of the end of
\nThatcherism. Letting this happen-driving her most talented lieutenant
\nout of her government-was the biggest mistake she ever made.<\/p>\n

Now,
\nGeithner and Summers appear to get along. But what I really want to
\nknow is how they have managed it. My theory-that the secret of their
\nsuccess, if they were going to have one, would be Geithner’s modesty-is
\nsomewhat undermined by Josh’s piece. I find it frustrating that the
\nquestion is never really confronted head on, but the implication of the
\npiece is that Geithner (“confident and brash-almost unnervingly so”)
\nand Summers have disagreed on some big questions, and that Geithner has
\nprevailed every time. This, frankly, I find hard to believe. The force
\nof Summers’ intellect is such that he dominates a discussion even when
\nhe just sits there brooding. And he knows it. Can he really have been
\nsidelined like this? By a former underling? If so, why is he still
\nthere? I don’t feel I understand this mysterious and pivotal
\nrelationship any better than I did 15,000 words ago.<\/p>\n

I would
\nhave liked to read much more, too, about the “Volcker rules” episode.
\nThis again was most bizarre. There stood Geithner, Treasury secretary,
\noff to one side, while Volcker strode up to explain why the Treasury’s
\nproposals for financial regulatory reform had missed the point. My
\ninstant reaction, much as I admire Volcker, was that his<\/i>
\nproposals missed the point. Many of those who initially celebrated them
\nnow seem to have come around to the same view. But here I’m talking not
\nabout the substance, but about the personal chemistry.<\/p>\n

Again, it
\nseemed to me at the time an instance of Geithner’s modesty that he was
\nwilling to stand there and be upstaged by one of Obama’s other heavy
\nhitters. Without going into detail about how this initiative came to
\nbe-details I will need, if I am to be convinced-Josh says this is not
\nhow it was. Volcker’s rules were devised by Geithner.<\/p>\n

\n

After
\nthe Massachusetts loss, Obama made a show of introducing additional
\n“tough” new rules, bringing back Volcker to lend him credibility and
\nendorse constraints on future bank growth and on banks’ ability to bet
\non risky assets like hedge funds-an episode widely interpreted as a
\nrebuke to Geithner. For political purposes, it was. But in truth, the
\nnew measures were relatively small ones rushed forward to appease a
\nhostile electorate. (And Obama had Geithner design them.)<\/p>\n<\/blockquote>\n

Love<\/i>
\nthat parenthesis. This makes Geithner the master architect, acquiescing
\nin his own seeming rebuke “for political purposes”-as he designs a
\nphony policy, and pushes Volcker forward as public-relations dupe to
\nannounce it.<\/p>\n

Well, as they say, interesting if true.<\/p>\n

<\/p>\n

<\/p>\n



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\n<\/p>\n","protected":false},"excerpt":{"rendered":"

Flights from London to DC via Frankfurt (don’t ask why, just learn from my mistake and never do it) put the recent Atlantic and New Yorker profiles of Tim Geithner in a good light. Longer than they needed to be, you say? I was wishing they were longer. Josh Green was better on Geithner’s character, […]<\/p>\n","protected":false},"author":5958,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-419805","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/419805","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\/5958"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=419805"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/419805\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=419805"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=419805"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=419805"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}