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The first thing a new president must do is to pick his team. Given the state of the economy, the most important selection at this point is that of Secretary of the Treasury. What criteria should President-elect Obama use to pick his next Treasury Secretary? Here are three:
- Does the person have the respect of Wall Street?
- Does the person know the current players and issues well?
- Does the person have the energy to run at full speed in what promises to be a 7-day a week position?
Obama is reportedly considering Timothy Geithner, president of the Federal Reserve Bank of New York, former Treasury Secretary Lawrence Summers and former Federal Reserve Chairman Paul Volcker. Based on the criteria I've listed, the right person for the job is Geithner. Summers is an academic with an abrasive personality who is not steeped in the realities of Wall Street. Volcker is reportedly close to Obama and was widely respected on Wall Street, but at 81 he lacks the energy for the job.
Geithner is young, energetic, respected on Wall Street and has played a central role in coping with this year's financial crises. He is likely to have the drive and ambition needed to identify and propose solutions to problems rather than waiting for someone to tell him what needs to be done. Summers and Volcker have already had big Washington jobs so they would probably not be as excited about the opportunity. I think their talents are probably best used in an advisory role.
Geithner would be the right person for the job. I hope President-elect Obama agrees.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.
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Reader Comments (Page 1 of 1)
11-06-2008 @ 2:59PM
JDSalinger12 said...
This article is a good read for a number of reasons. Obama needs to make a smart decision. However, the reality is we have had two tough days in a row on the market and more to come. It is clear Wall Street has concerns about Obama’s Presidency. All Investors should recognize this and take steps to protect your money. One of the best strategies in times like this is to consider to invest some overseas in an offshore bank account. This will help give you better investment opportunities and provide a hedge against whatever comes down the line in the US market. Remember: we have not seen the bottom yet.
Best,
Frank Miller
http://www.theoffshorebankaccount.com
11-06-2008 @ 2:59PM
Kent said...
I fully agree with the rationale and choice by Peter Cohen. Secretary of the Treasury must be neutral and adversarial. I would not agree if Barack repeats his choice of men closely connected with Wall Street as Bill Clinton (Robert Ruben) and G. W. Bush (H. Paulson) did. Ruben for trivialists turned down proposals to regulate derivative mortgage backed securities market; Paulson implemented the bail-out package for investment bankers as well as others which proved premature in my opinion. I just hope he doesn't select some of those from his economic team who are fundamentally classic Keynesians : i.e., Sperling, Tyson, and Stiglitz.