When they start making jokes about you, it's hard to recover. And that's what is happening now to Treasury Secretary Timothy Geithner.
It's not just "Saturday Night Live" poking fun at him — you might have seen the skit depicting a Geithner so clueless that he offered a huge reward to anyone who called his hotline, 1-800-IDEAS, with a plan to get us out of the financial crisis. Beyond the television shows, Geithner, who was confirmed despite having to pay $48,000 in back taxes and interest, is also the target of suppressed snickers on Capitol Hill whenever the subject turns to the IRS. And now, he is widely thought to be not up to the job.
The fundamental problem, of course, is that Geithner hasn't come up with a financial rescue plan. There is nearly unanimous agreement among economists and policymakers that the single most important thing the secretary of the treasury should do now is develop a plan to deal with the "toxic assets" that threaten the survival of financial institutions. But Geithner, who has been acutely aware of this problem for months, doesn't have such a plan. His "dithering," former Clinton Labor Secretary Robert Reich wrote recently, is "spooking everyone."
The situation has gotten so bad that Geithner is the subject of private buyer's remorse among some of the very politicians who supported him. A number of senators voted to confirm Geithner, even with tax problems they deemed disqualifying, because they believed the financial crisis required immediate action. Now, with little happening, their feeling is: We put aside some very troubling concerns for this?
"I'm fairly confident that if the vote on the nomination were held today, he would not be confirmed," a top Senate aide told me recently. "The thing that saved him — even though people with lesser problems were not saved — was that he was the only one who could do the job, and he was seen as the wunderkind who would come in and save the day."
But as troublesome as Geithner's performance has been, focusing too much on him obscures the bigger, more important problem: Barack Obama doesn't seem to know what to do next when it comes to the economy.
Signs of confusion are all around. First, the president hasn't troubled himself to hire a team to work alongside Geithner at Treasury. There are normally 18 high-ranking department officials who have to be confirmed by the Senate, and Obama has nominated three — and none of them have even had hearings yet. "Geithner isn't getting any support from the White House," another clued-in GOP aide told me. "No one man can do this job. Where is everyone who is supposed to be helping?"
Second, the administration is giving off signs of uncertainty about its own analysis of the crisis. The White House knows its forecasts of growth next year — when the administration predicts the economy will magically snap out of deep recession and resume robust growth — are too rosy. But they know they can't rein in those forecasts and bring them more in line with the expert consensus without blowing the president's big-spending budget out of the water. So they stick to a less and less credible forecast.
Third, the White House even seems unsure of its much-touted $787 billion stimulus package. Do you remember how often President Obama said his plan will "create or save" 4 million jobs? Well, a group of economists sympathetic to Capitol Hill Democrats reportedly says the number might be significantly lower — maybe 2.5 million jobs.
In light of that, the president's pledge to "save" jobs is looking fuzzier by the day. At a Senate hearing recently, Geithner hemmed and hawed when he was asked the simple question, "What's a saved job?"
"That's a loss avoided, or a rise in unemployment avoided, by getting growth back on track," Geithner answered. But when he was asked how we will know when a job loss was prevented from happening, Geithner could only say that we'll know when the president tells us.
Geithner's answer seemed almost sheepish, as if he knew — and he knew the senators knew — that the administration is making it all up as it goes along. He might just as well have asked us to call 1-800-IDEAS.
