Treasury Secretary Tim Geithner Out If Obama Is Reelected

Treasury Secretary Tim Geithner Out If Obama Is Reelected

The last of Obama's original economic team has signalled his exit with Obama's second term.

Tim Geithner has had a rocky career within the Obama administration. Shortly after taking the position of Treasury Secretary when Obama was inaugurated, the unfurling economic collapse forced Geithner to make some drastic decisions with very little time or information. Many of those decisions, including the TARP bailout plan, have had long-term political fallout and major economic implications. Now, in 2012, Geithner is the only remaining member of Obama’s original economic team, but that may be changing. He announced on Bloomberg TV that, should Obama be re-elected to a second term, he would not keep the Treasury Secretary on for his second term. “I'm confident he'll be president. But I'm also confident he's going to have the privilege of having another secretary of the Treasury."

One of the largest criticisms facing Tim Geithner is that his recommendations further consolidated and grew banks that were already “too big to fail”. Dead Baker, of the Center for Economic and Policy Research, said that he made it the, “center of his agenda to restore the banks to the pre-crisis status quo, rather than make way for a smaller and less consolidated financial sector.” There’s no question that the financial sector has not been made more accountable or less volatile by the federal controls that have been placed on it, nor by government stimulus. Although this may be partly due to congressional obstruction of some of the new financial regulatory agencies, and partly due to the inefficacy of agencies like the SEC to truly bring those banks to bear for their malfeasance.

Timothy Geithner is one of the last vestiges of the old Obama administration, the one that largely followed establishment thinking and failed to push back against an aggressively obstructionist Republican congress. Since Obama’s September jobs speech, there has been a sea-change in his strategy; a more aggressive, active, and vocal administration that is willing to breech status quo. Possibly galvanized by the Occupy Wall Street movement and the anti-Wall Street popular sentiment, he has sought to place stricter controls and more accountability on the financial sector.

During the last recess Obama finally appointed Richard Cardray to head up the new Consumer Financial Protection Bureau, an agency that had been languishing in its infancy since last summer without a director. It was an end-around nomination, circumventing Republican opposition. It’s also the kind of move, and the kind of emphasis, that just isn’t in the Geithner economic game plan. As a result, the Treasury Secretary and his conservation of the financial status quo is on their way out.