Obama’s Fall Guy
Since America is in its worst economic mess in 70 years and since President Obama's designated Mr. Fixit is Treasury Secretary Tim Geithner, you'd think the Obama presidency is in desperate shape. The reason? Mr. Fixit is surely the most derided man running the U.S. Treasury since Andrew Mellon cut spending and raised taxes amid the onset of the Great Depression in 1932. Even the bounce on Wall Street after the launch of Geithner's most recent effort to bail out the banks didn't stem the chorus of abuse.
"Quite simply, the Timothy Geithner experience has been a disaster," proclaims U.S. Rep. Connie Mack of Florida. "The Treasury Department is in disarray." Granted, Mack is a Republican, but Democrats can't muster much enthusiasm for their man. Says Rep. Michael Capuano, D-Mass., to ABC News: "At the moment, yeah. I mean, I have questions like anybody else, but let's be serious. He's still new on the job." Economists surveyed by the Wall Street Journal gave him a rating of 51 out of 100.
Most stentorian in his denunciations is Paul Krugman, a Princeton economics professor and winner of last year's Nobel Prize for Economics. Week after week from his pulpit at the New York Times, Krugman gives the Obama administration another walloping from the left for wimpish groveling to Wall Street. Even before Geithner unveiled his latest plan (in an off-camera presentation planned to mitigate the Treasury secretary's meager rhetorical skills), Krugman was abusing it as "zombie ideas." In his official obituary for the plan, published in the Times on March 23—the same day as the plan's official birth—Krugman announced somberly, "This is more than disappointing. In fact, it fills me with a sense of despair."
(Yes, this does sound a bit pompous, even though Krugman is a crisp columnist. As connoisseurs of Martin Wolf and other prominent economic Cassandras down the decades know well, there's nothing like a widely read economics column to induce a tone of rotund self-importance. "I'm concerned about Europe," Krugman began a column grandly a few weeks ago.)
Of course, Geithner got off on the wrong foot by coming to public attention during his nomination hearings before Congress for failure to pay certain federal taxes when he was at the International Monetary Fund, even though the IRS—a branch of the Treasury—reminded him of the omission more than once. However dilatory or devious in their own dealings with the taxman, Americans are merciless in moral posture towards the public figures in the same posture.
Geithner's appearance is against him, too. Treasury secretaries are supposed to evince gravitas, not resemble just the sort of rumpled 40-something investment banker whose funny-money antics put capitalism on the ropes.
But while Obama's Mr. Fixit is only a hair's breadth away from becoming a stock comic figure on the comedy shows, not much of the public derision is rubbing off on the boss.
Though the prevailing consensus is that the bailout and stimulus packages are saddling Americans with a couple of trillion in debt, with a better-than-even chance most of the money will miss its purpose, undermine the dollar and bring on hyperinflation, Obama continues to ride pretty high.
The latest round of polling has his ratings very respectably in the mid-60s, with one spectacular dip into the low 40s, reflecting the public's low opinion of his handling of the AIG bonuses. On that issue, as I suggested here last week, Obama danced on the edge of the volcano and got singed.
Predictably enough Obama has been standing by his man. "I have complete confidence in Tim Geithner and my entire economic team," he said mid-week. In the president's opinion, Geithner "is making all the right moves."
Obama wouldn't be the first president to realize that it does no harm to have public odium pleasantly deflected onto a subordinate. Year after year George Bush watched the mud getting hurled at Karl Rove and Dick Cheney. It was the late great historian Walter Karp who argued that the most politically adept of all presidents, Franklin Delano Roosevelt, conceived his notorious court-packing proposal – up to six new justices on the Supreme Court—to deflect attention from serious difficulties on other fronts.
So Geithner gets pelted with moldy cabbages, while Obama—entirely responsible for the basic economic strategy of bailing out the banks rather than taking them over—charms the nation.
It won't go on forever. If things go badly, the people know perfectly well where the buck stops. There's already a powerful drumbeat of disquiet from Krugman and former assistant Treasury Secretary Paul Craig Roberts on the CounterPunch site that Obama, for all his smoothness, is Hoover-like in his timid orthodoxy. Back from the political graveyard last week came former New York governor Eliot Spitzer arguing in a strong column in Slate that Obama's $200 billion payoff to AIG was the real scandal, not the $180 million in bonuses.
A few days after the column, Spitzer was on CNN giving his views. At this point in this unexpected renaissance one of the agents of Spitzer's downfall gave him an untimely nip on the ankle. The madam running the call-girl business patronized by the governor disclosed that another of her clients had been the baseball player New Yorkers love to hate, Alex Rodriguez. Spitzer, A-Rod and Madonna linked hands in a Daily News gossip item. For now, Obama sails smoothly on.
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