Virgil
09-26-2008, 09:04 AM
People should note that Ritholtz respects Chris Whalen. In the last blog entry at http://tinyurl.com/4bv58e the comments are saying that the Republican plan resembles Chris Whalen's plan. Whalen would like to see Paulson and Bernanke removed from their positions.
The entry of http://tinyurl.com/4y5z58 presents a guest essay by Marion Maneker that outlines the importance of the Treasury Secretary and says Bloomberg is the man for the next administration.
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It isn’t easy being Secretary of Treasury these days. One minute you’re down on your knees begging the Congressional leadership not to blow up the world’s banking system; the next you’re fielding calls from the Chinese threatening god-knows-what if you don’t make them whole on the GSEs. Just look at the month Hank Paulson has had.
One of the effects of the market shock and bailout plan has been a renewed focus on the Secretary of the Treasury. Once a role for a worthy business figure whose job amounted to repeating the mantra “a strong dollar is in America’s interest”-- usually as the dollar is sinking--the job has become something very different now and for the forseeable future. If Hank Paulson gets his way and Congress declares martial law over the financial community, the Treasury Secretary is going to be more Proconsul than cabinet functionary.
First, Paulson received nothing but praise for the way he handled the crisis; then he unveild his bailout plan. Suddenly it seemed like everyone turned against him -- though Anatole Kaletsky had questioned his moves already. No matter what happens to the bailout, Paulson isn’t likely to be asked to stay on after the transition. So we have to start asking the question: who is going to be riding this tiger next?
This isn’t a question like, who would the new president appoint to the Supreme Court? Where the Treasury Secretary was once a high level consiglieri, the position is rapidly becoming a much more complex and intense job with no natural constituency . . . and little margin for error. Congress hates you; main street hates you; and pretty soon -- with all that bickering as a distraction from its own misdeeds -- Wall Street is going to start complaining again. As a cabinet position, it may soon overshadow the Secretary of State in political importance and be no more satisfying for the office holder than trying to make progress with the Israelis and Palestinians.
Having said that, the job is still a career capstone or a stepping stone to greatness. The speculation about the possible nominees under the next administration began a few weeks ago when the Wall Street Journal baldy asked if the Fed's Timothy Geithner and FDIC's Sheila Bair were leading candidates.
No disrespect to either Geithner nor Bair, both of whom look to have big careers ahead of them on either side of the public/private divide, but even a traditionalist's view of the job would put it beyond their reach. The media focus requires some star-power, which Geithner still hasn't got, and international experience. The GSE bailout revealed one half of the Treasury Secretary’s job: dealing with pressure from abroad. From news reports, we know that the holders of American debt--namely, government agencies for economic powerhouses like China who Daniel Gross points out currently hold mearly $1 trillion or 21.4% of the GSE debt--were on the phone with Paulson a few seeks ago demanding reassurances. Next thing we got was the Fannie/Freddie takeover.
Holding off our creditors abroad is going to take someone with real international stature and visibility. That’s why everyone is so relieved that Paulson is currently in the job. But being the former head of Goldman wasn’t always credential enough. Remember that Robert Rubin had to serve an apprenticeship in the White House while the grand old man of the Senate Finance committee, Lloyd Bentsen, kept the seat warm.
That's one reason the Journal hedged their prediction with New Jersey Governor John Corzine, a Rubin successor at Goldman (so why not Treasury too?), and Jamie Dimon. Though one would be hard pressed to understand why someone like Dimon, just entering the salad days of his career, would want to deal with the US Treasury's many headaches. Or to put it another way, it's a job with many of the same constituencies Dimon has now but not the pay package.
<snipped>
The entry of http://tinyurl.com/4y5z58 presents a guest essay by Marion Maneker that outlines the importance of the Treasury Secretary and says Bloomberg is the man for the next administration.
=================================
It isn’t easy being Secretary of Treasury these days. One minute you’re down on your knees begging the Congressional leadership not to blow up the world’s banking system; the next you’re fielding calls from the Chinese threatening god-knows-what if you don’t make them whole on the GSEs. Just look at the month Hank Paulson has had.
One of the effects of the market shock and bailout plan has been a renewed focus on the Secretary of the Treasury. Once a role for a worthy business figure whose job amounted to repeating the mantra “a strong dollar is in America’s interest”-- usually as the dollar is sinking--the job has become something very different now and for the forseeable future. If Hank Paulson gets his way and Congress declares martial law over the financial community, the Treasury Secretary is going to be more Proconsul than cabinet functionary.
First, Paulson received nothing but praise for the way he handled the crisis; then he unveild his bailout plan. Suddenly it seemed like everyone turned against him -- though Anatole Kaletsky had questioned his moves already. No matter what happens to the bailout, Paulson isn’t likely to be asked to stay on after the transition. So we have to start asking the question: who is going to be riding this tiger next?
This isn’t a question like, who would the new president appoint to the Supreme Court? Where the Treasury Secretary was once a high level consiglieri, the position is rapidly becoming a much more complex and intense job with no natural constituency . . . and little margin for error. Congress hates you; main street hates you; and pretty soon -- with all that bickering as a distraction from its own misdeeds -- Wall Street is going to start complaining again. As a cabinet position, it may soon overshadow the Secretary of State in political importance and be no more satisfying for the office holder than trying to make progress with the Israelis and Palestinians.
Having said that, the job is still a career capstone or a stepping stone to greatness. The speculation about the possible nominees under the next administration began a few weeks ago when the Wall Street Journal baldy asked if the Fed's Timothy Geithner and FDIC's Sheila Bair were leading candidates.
No disrespect to either Geithner nor Bair, both of whom look to have big careers ahead of them on either side of the public/private divide, but even a traditionalist's view of the job would put it beyond their reach. The media focus requires some star-power, which Geithner still hasn't got, and international experience. The GSE bailout revealed one half of the Treasury Secretary’s job: dealing with pressure from abroad. From news reports, we know that the holders of American debt--namely, government agencies for economic powerhouses like China who Daniel Gross points out currently hold mearly $1 trillion or 21.4% of the GSE debt--were on the phone with Paulson a few seeks ago demanding reassurances. Next thing we got was the Fannie/Freddie takeover.
Holding off our creditors abroad is going to take someone with real international stature and visibility. That’s why everyone is so relieved that Paulson is currently in the job. But being the former head of Goldman wasn’t always credential enough. Remember that Robert Rubin had to serve an apprenticeship in the White House while the grand old man of the Senate Finance committee, Lloyd Bentsen, kept the seat warm.
That's one reason the Journal hedged their prediction with New Jersey Governor John Corzine, a Rubin successor at Goldman (so why not Treasury too?), and Jamie Dimon. Though one would be hard pressed to understand why someone like Dimon, just entering the salad days of his career, would want to deal with the US Treasury's many headaches. Or to put it another way, it's a job with many of the same constituencies Dimon has now but not the pay package.
<snipped>