The Martyring of Timothy Geithner

geithner The Martyring of Timothy Geithner

In the run-up to his January 20 inauguration and in the days that immediately followed it, Barack Obama essentially farmed out the public-relations component of his first major initiative.

Instead of assuming the role as salesman-in-chief for an economic stimulus package that he considered vital to his presidency, Mr. Obama remained above the fray while more polarizing Democratic congressional figures like Nancy Pelosi, Harry Reid and Barney Frank pleaded its case and combated opposition talking points in press conferences and television appearances.

The idea, it seemed, was to free the new president to pursue a public posture of bipartisanship – on January 27, one day before the House voted on the initial version of the stimulus plan, Mr. Obama paid a visit to the weekly meeting of that body’s Republicans – while lesser Democrats did the dirty work, and took the polling hit, that pushing the plan through Congress entailed.

It wasn’t the worst strategy, but the stimulus opposition proved stiffer than most people expected. Republicans lined up in lockstep against it, hyping relatively inexpensive individual line items in an effort to portray the bill as an exercise in extravagant waste, and many of them – like House Minority Whip Eric Cantor, who branded it Speaker Pelosi’s stimulus bill – turned Mr. Obama’s hands-off approach to their advantage.

At that point, the White House realized that it was time for the president to forcefully assert his ownership of the plan and to expend some political capital to ensure its passage and to retain the public’s confidence. So he fired up his own party, launched a campaign-style tour and got his bill through. A month later, support for the president – and his handling of the economy – remains impressively high.

For Mr. Obama, the lesson from this can – and should – be applied to the banking crisis, which he has thus far refused to treat with the same forceful, public and specific urgency that marked the end of the stimulus debate. The cost of this reluctance is becoming increasingly clear, while the stakes are much higher than those of the stimulus fight.

When it comes to the banking system, Mr. Obama has farmed out public relations to his Treasury secretary, Tim Geithner, who – not surprisingly – has been no more effective at generating public confidence and broad support than Mrs. Pelosi, Mr. Reid and Mr. Frank were with the stimulus. In the process, Mr. Geithner has earned himself an army of critics from both sides of the aisle (many of them now agitating for his scalp), generated intense skepticism on Capitol Hill, and found himself lampooned on “Saturday Night Live.”

This is partly his fault. For one thing, the self-inflicted tax problems that threatened his own nomination prompted a spooked Obama administration to slow the pace on subsequent appointments, making sure no further problem nominees are submitted to the Senate. This has contributed directly to the high number top-level vacancies at Treasury, which have forced Mr. Geithner into a one-man-band role for the past six weeks. Plus, Mr. Geithner has proven an unpersuasive and evasive communicator in his appearances before Congress.

But the real problem isn’t with Mr. Geithner. At least with the stimulus, it was clear what was being sold, even if the Democrats who were initially doing the selling weren’t very good at it. But when it comes to the banking system, what is the administration even trying to sell? So far, all that has been produced are variations of a vague plan that, it is generally agreed, is unlikely to work and isn’t, in any apparent way, in the taxpayers’ interest. This is what Mr. Geithner, with all of his deficiencies, has been deputized to sell to Congress and the general public.

So far, Mr. Obama’s most detailed statement on the financial crisis came in his address to Congress, when he warned that “while those cost of action will be great, the cost of inaction will be greater.” That’s the easy part. But when it comes to aggressively championing a specific solution, he’s been silent. Mr. Obama has to recognize that the crisis, which threatens his political standing as much as the economy, won’t be solved unless he claims ownership of the issue and treats it like another stimulus. And even then, there are no guarantees.

His reluctance is understandable. Before spending his own political capital, he needs to be confident that he has the right solution. And once he dives into the debate, the resolution won’t be speedy and tidy like it was with the stimulus. Immersion in the banking crisis could bog his presidency down. And if his solution is some type of temporary nationalization, the cries of “socialism” from the right will be loud. But, as he warned Congress, the cost of inaction would be worse.

Mr. Obama needs to settle on a concrete and specific program for the banks. If he’s confident that Mr. Geithner is the right man to implement it, then he should say so – loudly and clearly – and then use the presidential bully pulpit to create the kind of public support and momentum that will give Mr. Geithner the cover he needs to do his job.