Yet, given the nature of politics and the markets, he can't now and won't. We all have a serious problem and this problem is difficult to quantify. Secretary Geithner, as we all know, was found to have fairly significant tax issues. He failed to pay the pay roll tax for multiple years while working at the International Monetary Fund. Despite the serious nature of these misdeeds, Geithner was still confirmed. The administration made Geithner out to be indispensible. In other words, the public was supposed to swallow tax cheat overseeing the IRS because this tax cheat was unique in his ability. Yet, his unveiling of the bank bailout indicates that not only is he not unique, but frankly, he's probably simply not up to the job. Jim Cramer said he isn't ready for prime time. The market tanked right after his presentation. The general consensus was a plan very short on detail. This created an even greater aura of uncertainty and everyone ran for cover. Geithner's problems were of both style and substance. Not only was this the sort of vague plan that two buddies could put together over drinks, but he looked and sounded nervous throughout. (take a look for yourself)
There is an old saying, "you never get a second chance to make a first impression". Geithner has had two chances and he's failed miserably. He will likely be low key for weeks working behind the scenes. In the meantime, the general public will soon caricature him. Between his tax problems and his awful performance, he will become the butt of many jokes. That is not the place to be when he will be the point man on much of the economic recovery.
He simply no longer has the trust of the market, the financial world, or the public at large. Economies are built on a giant maze of many factors and psychology is at the top of that maze. It is nearly as important to present the right front as it is to execute the right policy.
Banks will lend more, consumers spend more, and businesses invest more because they believe that those in charge have a handle on things. Right now, those three elementst believe the point person is a bumbling idiot, tax cheat, that is a deer in headlights when it comes to the task at hand. That is the exact opposite of what we want. Secretary Geithner can of course get the confidence of everyone back, but that is a monumental task. First, he has the confidence of no one now. He can turn this around by finally presenting a detailed plan that lays out how the Treasury will oversee stabilizing credit. Yet, that is weeks away. In the meantime, he will be derided by nearly everyone and will likely make scant public appearances. The plan will need to be flawless. If the final and detailed plan is anything but perfection, the Treasury Secretary will likely lose everyone's confidence forever.
Of course, getting rid of him is not that simple. President Obama simply can't do this anytime soon. If he were to make this announcement today, his stimulus is dead on arrival. Such an admission of incompetence is all the cover his opponents need to block the stimulus. Furthermore, such an announcement would send markets into a tailspin that is nearly impossible to recover from. As such, we are all stuck with him. We all have to pray and hope that he will grow into his role and soon. Our economic nightmare maybe here. We may have selected a Treasury Secretary that isn't up to the job at a moment when it will be the Treasury Secretary most responsible for jolting the economy.
Please check out my new books, "Bullied to Death: Chris Mackney's Kafkaesque Divorce and Sandra Grazzini-Rucki and the World's Last Custody Trial"