The man tasked by Obama to revive US economy used to live in Zimbabwe
WASHINGTON – He has revealed details of his economic team – who will be in charge of America's response to the greatest financial crisis for 80 years – in an attempt to boost confidence in his ability to tackle his gravest problem on taking office next month.
Democratic sources have told The Sunday Telegraph that the President-Elect is disgruntled with the failure of Congress or the Bush administration to act quickly to tackle the continuing turmoil in the markets.
Mr Obama’s transition team on Friday night leaked that Timothy Geithner, the chairman of the New York branch of the Federal Reserve is a sure bet to become Treasury Secretary.
Mr Obama will finalise his offer this weekend and unveil his economic team on Monday. It is expected to include his senior economic gurus Austan Goolsbee and Jason Furman, to head up the president’s Council of Economic Advisers.
A role will also be found for former Clinton Treasury Secretary Lawrence Summers, who had been a contender to return to that post. Instead, Mr Obama is eyeing him to replace Fed Chairman Ben Bernanke, when his term ends in 2010.
Bill Richardson, the former presidential candidate and Governor of New Mexico, is tipped to become Commerce Secretary.
Mr Obama decided to move quickly to cement his economic team after progress towards a new economic stimulus package and a bail out for the financially stricken car manufacturers were stalled last week.
The delay blamed on a combination of Congressional apathy and the power vacuum in the White House, where George W Bush has less influence than any departing president since Jimmy Carter in 1980.
A Democratic strategist who is close to senior members of Mr Obama’s team told The Sunday Telegraph: "Obama is conscious that there is a deficit of leadership on the economy and it’s not helping. Congress has failed to get their act together on a stimulus package and nothing has happened to help the auto makers.
"There is only one president at a time, but he knows the country is looking to him for clear signals about what he will do. It’s time to lay down some markers."
The selection of Mr Geithner paid immediate dividends, with the stock market leaping nearly 500 points as Mr Obama signalled he is ready to make his mark on economic issues – despite having steered clear of last weekend’s G20 summit in Washington, leaving it in the hands of the outgoing President.
Mr Geithner has played a key role during the current crisis and is already familiar with the issues after working with current Treasury Secretary Henry Paulson and Mr Bernanke.
Chris Rupkey, a senior economist at The Bank of Tokyo-Mitsubishi in New York, described him as a "fantastic choice to help lead the financial markets out of the wilderness" and a "crisis manager par excellence who will hit the ground running."
Mr Geithner and Mr Obama will have much to talk about. The New York Fed boss meteoric career in banking mirrors Mr Obama’s in politics. He served Presidents Reagan, Clinton and both Bushes during a 13 year stint at the Treasury department that ended in 2001, after which he went to the IMF and then the New York Fed in 2003.
Both Mr Geithner and Mr Obama are 47. Both lived a large part of their youth abroad (Mr Geithner in India, Thailand and Zimbabwe) and both relax by playing an aggressive game of pick-up basketball.
Unlike Mr Obama, he has a gift for languages and speaks fluent Mandarin Chinese, after a year in what is the emerging economic superpower while a student.
Most importantly, both seem to thrive under pressure, which they can expect to face every day as they fight to stave off the worst depression since the 1930s.
Justin Rudelson, a friend of Mr Geithner’s who still teaches at Dartmouth College, where Mr Geithner studied, said he asked the putative Treasury Secretary in June whether he was getting enough sleep. "He said: ‘Justin, you have to realise, we live for this. We live for these kinds of crises.’"
Jeff Frankel, a Harvard economist who advises Mr Geithner on the economy, said he was with the future Treasury Secretary when he received the phone call from Mr Obama.
He described how the "cool and unflappable" Mr Geithner excused himself halfway through a four-hour meeting of his economic advisory panel yesterday to take a series of telephone calls, almost certainly about his appointment.
Mr Frankel said: "He betrayed no sign to us of what had just happened. No change in demeanor, no change in the substantive flow of the discussion. This is a guy who does not lose his cool. Just what the country needs."
But while Mr Geithner has a reputation, like Mr Obama, for remaining calm, he is also regarded as a thin-skinned individual, who takes disagreements as a personal challenge.
His appointment will not pass without some criticism from those who blame him for persuading Mr Paulson not to bail out the ailing bank Lehman Brothers, which went to the wall as the financial crisis was escalating.
Others on the left believe he is too close to Wall Street and say he has been too ready to funnel taxpayers’ money to failed financiers.
Joshua Rosner, managing director at financial research firm Graham Fisher & Co said: "I would expect his confirmation hearings to be animated, with some strong opposition asking questions about his involvement in the AIG, Lehman, Goldman, Morgan and Bear decisions by the New York Fed." Source: The Telegraph