Geithner Tapped for Treasury
In a further demonstration that the markets prefer certainty over uncertainty, the likely appointment of Federal Reserve Bank of New York President Timothy F. Geithner as the next Treasury Secretary appears to have calmed the market’s fears to some degree, since the Dow Jones Industrial Average was up 6.5 percent at today’s close. Geithner has worked closely with Treasury Secretary Hank Paulson to address the financial crisis, and insiders predict a very smooth transition from Paulson to Geithner.
The issue of Geithner’s role with Paulson on the more controversial decisions, such as saving Bear Stearns while leaving Lehman Brothers to fail, has been the only point of criticism among otherwise glowing reviews. Geithner has led the New York Fed for five years, and prior to that directed policy at the International Monetary Fund and was a senior fellow at the Council on Foreign Relations. During the Clinton Administration, Geithner served as Under Secretary of the Treasury for International Affairs. He served in various capacities at the Treasury Department from 1988 to 2001. While he represents change, Geithner brings a depth of Treasury experience that may be reassuring to many.
In other news, Congress left for the Thanksgiving holiday but first gave the Big Three automakers the homework assignment of "writing a plan for viability" by December 2nd. If the plans demonstrate that the domestic automakers would be a sensible, long-term investment for $25 billion worth of taxpayer loans, Congress will return to Washington on December 8th to pass auto bailout legislation. House Speaker Nancy Pelosi said Congress will also begin work on an economic stimulus proposal that will be ready to go at the start of the 111th Congress.
