Tim Geithner enjoyed a long honeymoon from his detractors, but that all came crashing down this week. What started as criticism over his handling of the AIG bailout has snowballed, with Democratic congressman Peter DeFazio (D-OR) and several Republicans calling for his resignation. Though trashing Geithner is nothing new, the embattled secretary managed to win high grades this summer for beating back the recession. Now that scrutiny has returned, will Geithner be able to hold on? He's facing volleys from some fairly big guns in politics and the media. Here's the debate:
- Geithner Screwed Up The Geithner debate has led to a face-off over at The New York Times. Paul Krugman, long a critic of the Obama administration's economic policy, though he awarded it some hard-won praise in August, argues that the bungled AIG bailout "was part of a pattern: Throughout the financial crisis key officials--most notably Timothy Geithner ...--have shied away from doing anything that might rattle Wall Street." This approach, he says, "has ended up undermining prospects for economic recovery"--the public has lost faith.
- Geithner Got Us Through Fellow New York Times columnist David Brooks, however, mounts an impressive defense of the Treasury Secretary. He points out that no one liked Geithner back in the spring, either, but "the evidence of the past eight months suggests that Geithner was
mostly right and his critics were mostly wrong." The financial sector is doing better, and bailout money is being repaid. Furthermore, "it now seems clear that nationalization," which would have been more to Krugman's increasingly interventionist liking, "would have been an unnecessary
mistake." Brooks thinks Geithner has "good policy instincts," and praises his cautiousness and flexibility.
- This Is About Midterms Reuters's James Pethokoukis looks at the politics of the situation. These calls for Geithner's resignation, he says, are "a sign that some Democrats do fear the Obama White House on the
economy--they fear being too closely aligned with it." The converse is also true: Republicans aren't afraid of attacking it.
- A Lot Will Depend on Approval Ratings Daily Finance's Tim Catts notes that recent polls have Obama at a 43% and 51% approval rating on the economy, and have remained fairly stable at that range since July. "Whether those numbers hold steady," predicts Catts, "will probably help determine whether Geithner faces more calls like Brady's anytime soon."
- It's About Unemployment For blogger Don Surber personally, satisfaction with Geithner has to do with different numbers. He takes exception to Geithner's defense of his performance. "I think 10.2%--and rising--unemployment is a downer and a sign of
failure," Surber writes. "The failed stimulus and fears over the cap-and-trade and
Obamacare proposals are pretty much responsible for anything over the
9% unemployment that the president said we would have if we did nothing."