Obama Press Conference (pt.1) Nov. 24, 2008

Barack Obama's second press conference since winning the election was disciplined, focused and serious...He criticized the Big Three automakers for having no idea what they wanted to do with the billions in tax dollars they want given to them, but also indicated he didn't want Detroit going under. He pledged to do "whatever is required" to keep the financial system working, but didn't get into exactly what that might mean, preferring to wait for his newly appointed economic policy team to give him some proposals to sort through. He'll probably let the Bush tax cuts expire..and the calm, steady leadership Obama displayed Monday will surely help put viewers at ease. http://www.salon.com/politics/war_room/2008/11/24/obama_presser/index.html Why the Geithner Pick Is Even Better Than You Think [by Noam Scheiber] I was thrilled to hear yesterday about the dream-team pairing that will make Geithner Treasury Secretary and Summers a top White House adviser. Geithner is one of the most able technocrats to have risen through Treasurys ranks, which makes him the perfect pick to run its sprawling bureaucracy; Summers is one of the top two or three economic minds of his generation, which makes him a guy you want in the room with the president. But, beyond the pairing of person and job, it's the way these guys complement one another that's really key here. Geithner is the rare bureaucrat with the smarts and the self-confidence to effectively challenge Summers when hes off base. As I wrote earlier this month: Geithner had become a check on the bandwagon-jumping Summers's intellect could inspire--and which Summers, to his credit, reflexively resisted. "When you're talking to the Treasury secretary or the under secretary, there's a strong tendency for everybody to leap on what that person is saying and agree," says one co-worker. "Tim's fundamental function was to interrupt that process." Former colleagues told me that Geithner had a particular knack for reeling in Summers when hed get bogged down on some esoteric point of marginal relevance to the problem at hand. Hed say something like, That was enormously clever Larry, but on the other hand... then home in on the question that needed resolving. The value of this skill is hard to overstate. But 1.) Substantively, Geithner will have the chief responsibility for resuscitating and reforming the financial markets, an area where hes developed extensive expertise at the New York Fed. Summers will, in turn, be the guy the administration defers to on broad macroeconomic decisions--how big a stimulus bill should be, how the money should be allocated between unemployment benefits, aid to states, infrastructure projects, tax cuts, etc. (One thing to keep in mind about Geithner: Hes one of the least territorial people ever to work in government, with the possible exception of his old boss Bob Rubin, who was also famous for this. If Geithner thinks a colleague is in a better position tackle something, his impulse is to get out of the way.) 2.) Geithner and Summers will also have complementary procedural roles when dispensing advice to Obama. Summerss instincts are pretty activist--he tends to favor aggressive government intervention during a crisis. Obama is innately cautious. Even when his head tells him to be aggressive, his gut tells him to slow down. The problem with a combination like this is that it can lead to stalemate: The activist guy pushes and the cautious guy clams up. Which is where Geithner comes in. Geithner has, over the years, displayed a knack for getting to where Summers is headed, but with less indigestion all around. For example, in the fall of 1997, Geithner, Summers, and then-Treasury Secretary Bob Rubin had to formulate a response to the Korean financial crisis, which was on the verge of spreading around the globe. Summers wanted a huge show of force--accelerating an existing IMF package and kicking in a U.S. bailout to boot--which made Rubin queasy. Geithner helped broker the compromise that won Rubin over. (It involved asking private banks to re-schedule Koreas debts so the country wouldnt need as big a bailout.) I can imagine a similar situation arising under Obama. 3.) Geithner will take the lead on all things political. Hes developed strong relationships up and down Wall Street over the last five years, so he shouldnt have trouble selling his reform agenda there. He also has extensive experience navigating Capitol Hill, having helped advance the Clinton administrations debt relief agenda there during the mid-to-late 90s, over deep conservative opposition. Anyone who can convince the Jesse Helmses of the world to ease up on third-world countries can probably guide a stimulus bill through Congress. http://blogs.tnr.com/tnr/blogs/the_stump/archive/2008/11/22/why-the-geithner-pick-is-even-better-than-you-think.aspx