By William Patalon III
Money Morning/The Money Map Report
Timothy F. Geithner, the New York Federal Reserve Bank president who rose to prominence earlier this year as a key official in the government's financial rescue measures – is to be secretary of the Treasury, designated White House senior advisor David Axelrod told Fox News yesterday (Sunday).
Slightly more than two weeks after Sen. Barack Obama won the U.S. presidential election, his new Cabinet and economic team are taking shape with several key appointments, including some Washington veterans who will take lead roles in the new administrations efforts to break the U.S. economy out of its worst financial crisis since the Great Depression.
Also nominated for key positions in President-elect Obama’s cabinet:
- U.S. Sen. Hillary Rodham Clinton, D-NY, as his secretary of state.
- Economist Lawrence Summers, the former Harvard University president who served as U.S. Treasury secretary during the Clinton Administration, as his director of the National Economic Council.
- New Mexico Gov. Bill Richardson, an Energy Department secretary under President Bill Clinton, for secretary of the U.S. Commerce Department, recent reports said. Richardson is a former congressman from New Mexico and was also a U.S. ambassador to the United Nations during the Clinton Administration.
- And Geithner, 47, the 9th president of the Federal Reserve Bank of New York, a role that also has him serve as vice chairman of the policymaking of the Federal Open Market Committee (FOMC).
The official announcements are scheduled for today (Monday). All four are key. Indeed, Obama’s willingness to bring in Sen. Clinton – who fought and lost a bitter battle with Obama for the Democratic presidential nomination – carries a huge significance: It shows the two are continuing to work to unite the Democratic Party, an initiative they embarked upon after Clinton’s stunning defeat.
But Geithner (pronounced: GITE-ner) is probably the most important appointment. Under current president George Bush, it’s been U.S. Treasury Secretary Henry M. “Hank” Paulson Jr. – along with U.S. Federal Reserve Chairman Ben S. Bernanke – who’s been the point on the $700 billion financial bailout plan. With the change in administrations in January, that role will fall to Geithner.
As the nation's top financial authority, Geithner would inherit oversight of the Bush administration's $700 billion bailout for Wall Street and a U.S. economy struggling with recession. When Wall Street heard that Geithner was the nominee to head the U.S. Treasury Department, stocks soared, with the Dow Jones Industrial Average rocketing 494 points, or 6.5%, to close at 8,046.
"By temperament and experience, he's the right man to lead the Treasury now," Axelrod, the White House spokesman, said.
Geithner was born in Brooklyn, the son of Deborah and Peter F. Geithner of Larchmont, N.Y. He completed high school at the International School in Bangkok, Thailand, and then attended Dartmouth College, graduating in 1983 with a Bachelor of Arts degree in government and Asian studies. He obtained a Master of Arts degree in International Economics and East Asian Studies from Johns Hopkins University's School of Advanced International Studies in 1985. He has studied Japanese and Chinese and has lived in present-day Zimbabwe, India, Thailand, and China, according to his Wikipedia biography.
Geithner is married to his Dartmouth classmate, Carole M. Sonnenfeld. They wed in 1985. They have two children, Elise and Benjamin. In spare time he enjoys fly-fishing, tennis and surfing.
Career Finance Official
He is a career Treasury official under both Bob Rubin and Larry Summers – who actually had worked at the Treasury Department in three administrations under five secretaries – going back to 1988.
Geithner worked at Treasury for 13 years ending in 2001, having played a key role in shaping U.S. response to the Asian currency crisis of 1997 to 1998. He played a major role in negotiating aid packages for South Korea and Brazil.
As president of the New York Fed, Geithner has been on the front lines of the U.S. central bank’s efforts to battle the financial crisis and to jump-start the flow of credit. He has a close working relationship with U.S. Federal Reserve Chairman Ben S. Bernanke.
Those who know Geithner say he is motivated by stiff challenges — and that the financial crisis gripping global markets today is no exception. Back in June, Justin Rudelson, a friend of Geithner's from Dartmouth who teaches there, said he asked Geithner whether he was getting enough sleep.
“He said, 'Justin, you have to realize, we live for this. We live for these kinds of crises’,” Geithner told Rudelson, MSNBC.com reported.
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News and Related Story Links:
Obama taps Geithner, Clinton, Richardson, Summers. Top adviser confirms NY Fed chief picked to head Treasury.
Obama makes key Cabinet picks.
GEITHNER LIKELY TO BE TREASURY SECRETARY.
Money Morning Analysis:
Second, and Possibly Third, Stimulus on the Way as Unemployment Poses Next Major Hurdle for the Economy.
Christian Science Monitor:
Are jobless next to need a bailout?
Corporate Layoffs: The Worst is Yet to Come.
Job Losses Pile on in October, Expected to Accelerate as Economy Worsens.
GM and Ford Burning Cash, Seek Emergency Government Loans.
The New York Times:
Obama Asks Bush to Provide Help for Automakers.
Obama Discusses With Bush Urgency of Aiding Carmakers.
Two-part stimulus package needed to boost economy: Pelosi.
Geithner: Obama's Likely Treasury.
Stocks cheer report Obama will tap Geithner for Treasury.
About the Author
Before he moved into the investment-research business in 2005, William (Bill) Patalon III spent 22 years as an award-winning financial reporter, columnist, and editor. Today he is the Executive Editor and Senior Research Analyst for Money Morning at Money Map Press.