Tim Geithner Won't Stay On If Obama Wins Second Term: Report
Barack Obama won't ask Timothy Geithner to stay on as Treasury Secretary if the president wins reelection, Geithner told Bloomberg TV's Trish Regan Wednesday.
"He's not going to ask me to stay on, I'm pretty confident," Geithner told Bloomberg. "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."
Geithner, who has been Treasury Secretary under Obama since his inauguration, signaled to White House officials last summer that he was mulling leaving his post after Congress and the President reached an agreement to raise the nation's debt limit -- negotiations in which Geithner played a crucial role. Geithner is the only member of Obama's original economic team still serving.
Geithner 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, said Dean Baker, co-director of the Center for Economic and Policy Research.
"You have a much more consolidated banking system than you had even back in 2007," Baker said. "The banks have basically become parasitical on Main Street."
Baker added that Geithner and others inside Obama's economic team "totally lost control of the agenda" after passing the stimulus and becoming overly optimistic about the recovery's prospects. "That just made it very difficult for them to turn around and say, actually, that was wrong, we shouldn't be focused on deficit reduction. They boxed themselves in," he said.
The decision to let Geithner go represents a reversal for Obama, who previously went so far as to enlist Geithner's wife to help persuade the Treasury Secretary to stay in Washington instead of returning to New York with his family, according to The New York Times. But Geithner was part of an economic team that underestimated the depths of the economic crisis and crafted a response that critics say fell short of what was necessary.
In 2008, as chairman of the Federal Reserve Bank of New York, Geithner, along with former Treasury Secretary Hank Paulson and Federal Reserve chairman Ben Bernanke, was one of the principal architects of the Troubled Asset Relief Program. TARP provided hundreds of billions of taxpayer dollars to big banks in the wake of the financial crisis. The bailout has been both hailed as a necessary step to preventing total financial meltdown and criticized as a boost to institutions that brought the country to crisis.
In the eyes of some, Geithner should be remembered more for averting financial collapse.
"We were potentially facing another Great Depression, and that didn't happen," said Nigel Gault, chief U.S. economist at IHS Global Insight. "Whatever happens from now on, that still is part of his achievement."
Jay Bryson, global economist at Wells Fargo Securities, said that Geithner's role in preventing economic catastrophe is "underappreciated."
"A lot of events since he's been Treasury Secretary have been well beyond his control," Bryson said. "So I'm willing to give him a break there."
Geithner has become a target of criticism for the Occupy movement and others that often deride Washington for its close relationship with Wall Street. Geithner allegedly ignored a request from Obama in March 2009 to consider dissolving Citigroup, according to Ron Suskind's Confidence Men.
Yet Geithner, who also played a crucial role in crafting the Dodd-Frank legislation, has recently distanced himself somewhat from Wall Street by criticizing big banks for lobbying to water down financial reform. He's admitted in the past that there is a risk that those enforcing the legislation may end up overdoing it.
Through it all, the Treasury Secretary has defended Obama's efforts to rebuild Wall Street. At an October forum, Geithner said he didn't understand why the financial industry was angry with the president.