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Obama to pick Timothy Geithner as Treasury secretary

By Carol Eisenberg

November 21, 2008 at 4:29pm

Timothy Geithner, the president of the New York Federal Reserve Bank, is expected to be tapped by President-elect Barack Obama to be the next secretary of the U.S. Treasury.

The announcement about Obama’s economic team, including Geithner, will be made within the next few days in an effort to calm financial markets, reports NBC News. Stocks rallied Friday afternoon on the first reports about Geithner, who is seen as a strong crisis manager and someone already steeped in the details of the financial crisis.

Geithner was considered a top prospect, along with former Treasury Secretary Lawrence Summers, to lead the next administration’s efforts to lead the nation out of the worst economic downturn since the Great Depression.

The 47-year-old economist has a gold-plated resume and network, and has already played a central role in navigating the bailout of American International Group Inc. and the rescue of Bear Stearns Cos.

Timothy F. Geithner
Timothy F. Geithner

In some ways, his entire career has been about managing adversity.

As an undersecretary for international affairs during the Clinton administration, he helped shape the government’s response to the collapse of Asian markets.

And for years after, he was Wall Street’s “worrier in chief,” as the Washington Post described him, warning about the risks posed by new financial products and lending practices before becoming a point person in efforts to clean up the mess they created.

As an earlier Muckety story detailed, Geithner spent many years abroad as a young man, primarily in Japan and India, moving around because his father was a program officer with the Ford Foundation.

He graduated from Dartmouth College and John Hopkins University with an emphasis in international studies rather than economics.

“Since college, he has pretty much gone straight up the ladder,” Gary Weiss wrote in Portfolio. “No detours, no backpacking around Europe, no internship fetching coffee.”

Geithner’s first job was with Kissinger Associates, where he worked with the former secretary of state.

From there, he went to the U.S. Treasury Department, where he rose to become an aide to Lawrence Summers and Robin Rubin, treasury secretaries under Bill Clinton.

He assisted these leaders in putting together bailouts, not of companies but of nations, including Mexico and Indonesia.

During the late 1990s, Alan Greenspan, then the chairman of the Federal Reserve, also noticed Geithner.

“That whole period was one long crisis,” Greenspan told Portfolio. “(Geithner showed) a general understanding of the nature of what the problems were and what was required to right the system.”

Geithner’s circle of advisers and mentors was expanded in 2003 when he became head of the New York Fed, the most powerful of the government’s 12 regional banks.

When Bear Stearns, an investment bank, began to bleed money earlier this year as a result of the collapse of the sub-prime mortgage industry, the New York Fed took on damage-control duties.

Geithner served as the point man in the talks that led to the Federal Reserve’s loan of $29 billion to assist J.P. Morgan Chase & Co. in its buyout of the assets of Bear Sterns.

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3 Comments

  • #1.   bobf 11.22.2008

    Ironically,Obama’s cabinet will apparently include at least two former members of Henry Kissinger, Brent Scowcroft, Lawrence Eagleburger and L.Paul Bremer’s Kissinger Associates influence-peddling firm–Bill Richardson and Tim Geithner. Perhaps Kissinger Associates will now disclose the names of its foreign corporate clients during the period when Treasury Secretary Designate Geitner worked at Kissinger Associates?

  • #2.   Joe Plummer 11.22.2008

    He is just another from the same gang, that has ruined this nation into the ground. Big surprise!

  • #3.   Rusty Wilson 03.29.2009

    Yeah, that same old group. I think we need new blood running things, say people from outside the New York - Washington sphere. How about we tap a bunch of working stiffs from Abilene, along with some rural survivalist from Oregon. We could turn the whole thing over to them, with their experience, international conections and educations, I’m sure macroeconomic theory won’t get in the way of them saving us.

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