Timothy Geithner has been something of a bumbling idiot. Or at the very least, way out of his depth as Secretary of the Treasury. He has the look of someone strung out in perpetual befuddlement: the government equivalent of Mark Wahlberg. Geithner may not have a personal history as an investment banker at Goldman Sachs, for example; but as the former head of the Federal Reserve in New York, he was well-connected with investment banking players. Robert Rubin, former Treasury Secretary under Clinton, and Goldman Sachs executive, was his mentor. This deep connection between the US treasury and Wall Street’s power brokers must end with Obama‘s next Treasury Secretary pick.
Obama can regain the confidence of Americans by appointing someone to the position who will not buckle under the pressure of Wall Street. Someone who will serve as the necessary thorn in their side. A force to keep the investment banks ethically in line.
But who could possibly fill such a role?
The best pick would have been Elizabeth Warren, who is currently running in the Massachussetts Senate election against GOP incumbent Scott Brown. She has the necessary energy and critical eye required for a position as important as Secretary of Treasury. She understands that big business and banking have vital roles to play in the American economy; but she also understands that bad ethics and suspect lobbying can cripple the economy and leave people without jobs or any promising future.
A name currently being floated for Treasury Secretary is Larry Fink, CEO of BlackRock. He’s the world’s largest asset manager and buddy-buddy with Geithner. With what the country needs now in a recession triggered by Wall Street malfeasance, Fink should be disqualified straight away. But he is no doubt a prime contender. Obama can use him as an olive branch to Wall Street, even though the president has been incredibly accommodating to their demands since the moment he took office.
Former Goldman Sachs banker Gary Gensler and Evercore Partners founder Roger Altman are also potential picks. But, again, they are Wall Street insiders. This is the reality for Obama and America: the investment and banking communities have made themselves so essential to the political process that our presidents must turn to them or risk alienating Wall Street.
It’s a bullshit game and Obama has a thankless task here. He has to please not only the Democrats and GOP, but Wall Street and main street.
The best choices outside of Warren might well be Martin Gruenberg and Sarah Raskin. Gruenberg, Chair of the FDIC, was the chief author of the Sarbanes-Oxley, a bill that helped clean up the mess left by Enron, Tyco International and WorldCom, amongst corporations and accounting firms. He’s well-connected on Wall Street but not a supplicant. Raskin is known as the most progressive member of the NY Fed, but doesn’t have any direct Wall Street experience. They’d both probably be filibustered by the GOP.
Whatever happens with the Treasury Secretary nomination, expect there to be an epic battle between the GOP and Democrats.