Local
At the center of the storm
By: James Gerstenzang
Special to The Examiner
December 5, 2008
 |
“Here’s what we should do to support the Japanese yen,” Summers might say, before adding: “Tell me why I’m wrong.”
Whether he was indeed ready to hear why he was wrong or not — and Summers is not a man with a reputation for easily accepting criticism — he could count on one person to tell him just that.
Softening the blow with a chuckle, Geithner would pipe up: “Well, Larry, here’s why you’re wrong.”
Then-Deputy Treasury Secretary Stuart Eizenstat, a regular participant in the sessions, recalled in an interview that Geithner would drill into Summers’ plan with “good humor and keen analysis,” becoming an interactive sounding board for the secretary.
When President-elect Barack Obama’s economic team takes over next month, Timothy Franz Geithner will be sitting in Summers’ old seat — and looking for some push-back from aides.
Not bad for a 47-year-old fly-fisherman and surfer who has never run a company, taken the risks of a Wall Street trader or immersed himself in theory as an academic economist.
The choice of Geithner for Treasury secretary has senior Democrats and many Republicans cheering.
He brings “high credibility, high integrity” to the job, said Kenneth M. Duberstein, who was a White House chief of staff for President Ronald Reagan.
Geithner is president of the Federal Reserve Bank of New York. By definition and practice, the job has put him at the center of the financial crisis shaking the globe.
But even as his admirers say his Fed experience is exactly what a Treasury secretary needs in 2009, his critics counter that he may be too close to the problem to put forward effective solutions.
“He knows what’s going on,” said one government economics expert who spoke on the condition of anonymity because he was not authorized to speak for his agency. “The dilemma is, the only ones who have expertise are the ones who are implicated in what we’ve come to.”
On the other hand, the official said, Geithner will join Obama’s inner circle of economic advisers “without much political ideological baggage” — a technocrat who has served in staff positions at Treasury under two Republican presidents (Reagan and George H. W. Bush) and one Democrat (Bill Clinton). In the latter administration, he rose smartly through the ranks as a Summers protégé.
Indeed, when Summers, as an undersecretary, was asked one day in a Treasury corridor to name the person on whom he relied most heavily, he nodded down the hall to where a group of young aides had congregated. At the center of the cluster — and Summers’ focus — was Geithner.
The message was clear: This was a guy who was going places.
Said one Republican lobbyist who has observed Geithner from positions inside the White House and out: “He is Larry Summers without the sharp fangs. He has the brainpower, but not the barnacles.”
Now, with Summers moving into the White House West Wing to run Obama’s National Economic Council, it will be Geithner whose signature appears on the nation’s currency — and whose stamp will be put on the multibillion-dollar operations intended to right the listing global economy.
Geithner, whose name is pronounced GITE-ner, arrived in Washington to attend graduate school at the Johns Hopkins University’s School for Advanced International Studies in the midst of the Reagan administration’s economic struggles. He graduated with a master’s degree in international economics and East Asian studies in 1985.
He had already traveled widely with his family. His father was a Ford Foundation program officer in charge of projects for developing countries, and young Geithner graduated from the International School in Bangkok before getting his undergraduate degree at Dartmouth College, where he studied Chinese and Japanese.
At a campus known for its fraternity parties and conservative bent, Geithner stood out: He moved off campus, hung out with a more liberal crowd, pursued his passion for East Asian studies and became a serious photographer.
He was, housemate John Fanestil recalled, “an accomplished linguist” who spent much of his junior year in China, and returned with what Fanestil still remembers as remarkable photographs of Chinese citizens.
Geithner “cared very much about inequality and thinking globally,” said Fanestil, a former pastor at a Methodist church in Anaheim, Calif., who is executive director of Foundation for Change, a community action group in San Diego.
Geithner’s government service has been marked largely by crisis management. As Summers’ wingman dealing with the Asian economic meltdown during the second Clinton term, he predicted ahead of many others that the crisis would infect emerging economies, and wrestled with its fallout when it spread to Russia and Brazil.
As the head of the New York Fed, he played a leading role in the negotiations that ended with the sale of the Bear Stearns Cos. Inc., to JP Morgan Chase. He was also a central figure in the effort to salvage American Insurance Group Inc.
Taken together, said Jim Bicksler, a professor of finance and economics at the Rutgers University School of Business, Geithner has focused on issues of corporate governance, but “more importantly on government policies to prevent contagion” of the Wall Street crisis.
“He’s conservative in the sense he’d like to do it with minimum government expenditure,” Bickler said, but he recognizes that “the federal government can’t stand by and let the markets resurrect themselves.”
When all is said and done, Eizenstat said, “Tim has the capacity to drill down very deeply into an issue and understand the details, but not lose the forest for the trees. He sees the bigger picture.”
That ability — and Geithner’s energy and boyish appearance — prompted the former deputy secretary to say: “He’s 47 going on 32” in enthusiasm and looks, “but 47 going on 62 in wisdom and experience.”
