Tom Hoenig For Treasury

The White House is floating, ever so gently, the notion that they are open to nominations for the position of “Tim Geithner’s Successor.”

It’s not clear if they mean this job is likely to be advertised formally sometime in 2012 or 20 minutes after the November midterms.  Nor is it obvious if this is a real request for proposals – it could be just an effort to make critics “put up or shut up.”

Fortunately, there is an entirely plausible successor already in waiting, ready now or whenever the president finally realizes the need to fundamentally change banking policy.

Tom Hoenig, president of the Kansas City Fed, is best known for three things.

  1. He’s currently the only senior Fed official who has been outspoken (or even spoken out) against banks that are undoubtedly Too Big To Fail (TBTF).  Hoenig has been a beacon of clarity on this issue over the past year.  Compared with central bank officials – and almost everyone else – Hoenig stands out as a model of straight thinking and a proponent of tough action.  With his disarming but no nonsense approach, he is the perfect person to take on the likes of Lloyd Blankfein (Goldman Sachs) and Vikram Pandit (Citigroup) both in the corridors of power and in the nitty gritty of their rather sordid business models.  Hoenig is a career bank supervisor and nobody’s fool.  Blankfein and Pandit are just two more guys who run banks that have gone bad.  You know how that movie ends.
  2. Hoenig, who sits on the Federal Open Market Committee, is also an inflation hawk – at least by today’s standards.  This makes some would be supporters – including fans of his attitude on TBTF – rather wary of advancing his name (e.g., as chairman of the Fed Board).  This hesitation is understandable although likely mistaken; you don’t keep the federal funds rate essentially zero for long when nominal GDP is growing at more than a 6 percent annual rate.  In any case, the issue is irrelevant for the Treasury job.  The Treasury Secretary’s responsibility in a modern administration is to run financial sector policy, meaning bailouts and how to avoid them.  Peter Orszag has the budget and Ben Bernanke (gulp) holds the monetary tiller.  What we desperately need is someone who can sort out our largest banks.
  3. Tom Hoenig is almost certainly a Republican, although – as head of a regional reserve bank – the full range of his views, outside of banking and money, are not widely known.  Paul Krugman reasonably points out that if he (Krugman) were nominated for the Fed (or Treasury or anything else), this would likely run into trouble in the Senate.  Hoenig is a completely different kettle of fish, appealing to sensible Democrats and Republicans – yes, there are a few – who increasingly worry about massive banks and their electoral implications.  And while financial sector policy is job one, serious efforts to address the budget – led by people of all ilk with a strong grip on economic realities – also lie in our future.  Either that or the republic will perish.  Not a tough choice in the end, but it does need to involve at least a few Republicans.

There will be objections to be sure.

  • He’s just a regional Fed governor.  True, but so was Tim Geithner.
  • He’ll be captured by Big Finance, just as Geithner was. Spend some time with Tom Hoenig before you jump to this conclusion.
  • The market will react negatively, because it will sense the era of unlimited bailouts is drawing to a close.  Sure, but that’s the point. 
  • He’s a Republican.  See point 3 above, and remember that President Obama offered Senator Judd Gregg (R., New Hampshire) the position of Commerce Secretary at the beginning of his administration.

There’s also the question of whether Tom Hoenig would take the job.  He doesn’t seek it and no doubt doesn’t need the hassle and the heartache. 

So it would be a question of how he is asked and what powers he is given.  With the right job description and enough protection from the very top, Hoenig is not the kind of person who shrinks from the opportunity to help his country back onto safer ground. 

He’s not a politician and he’s not a banker.  But he knows the politics of central banking and what bankers – of any size and kind – get up to.

Joe Kennedy, first head of the SEC, was by all accounts a poacher turned gamekeeper.  Tim Geithner sees himself as a gamekeeper, but he is undone by the belief that the principal poachers are decent and honorable folk who mean no ill. 

Tom Hoenig is just a plain spoken old-fashioned gamekeeper.  Not many of them are left, but you only need one.

By Simon Johnson

89 responses to “Tom Hoenig For Treasury

  1. Last night, I had a dream where I was summoned to the White House to meet with Bernanke and Geithner. All three of us were sitting in a row in an office, Bernanke to my right and Geithner to my left, facing a large and expensive-looking wooden desk.

    They told me the desk and office belonged to a “mystery guest”. Eventually Larry Summers walked in and took his seat behind the desk.

    They asked me if I had any questions. I asked whether they really knew what they were doing with all the bail-outs and buying $1 trillion+ in MBS with fresh money. “Are you sure the cure isn’t worse than the disease?” I asked.

    Summers said that is an interesting question, because before all of the extraordinary measures began, they asked him to explore and report on all of the potential failure modes. Only he deliberately did not do a very thorough job, because — he explained to me — he is such a strong debater that he was worried he would convince everybody else not to proceed.

    True story.

  2. “With his disarming but no nonsense approach, he is the perfect person to take on the likes of Lloyd Blankfein (Goldman Sachs) and Vikram Pandit (Citigroup) both in the corridors of power and in the nitty gritty of their rather sordid business models.”

    Maybe I’m talking out of my posterior here, but you’re making the (wild) assumption that anyone voting for this nomination would be ready and willing to bite the hand that feeds. This sounds extremely unrealistic in such a well captured and controlled government.

  3. Except that Geithner was the NY fed governor. Surely you do not believe that NY and KC are the same?

    Also, if you are going to accuse Blankfein and Pandit of “going bad,” don’t you think you should have some evidence? Or at least a prior post you can link to? I don’t think it is enough that they are big in a regulatory environment that let them get big, in particular you are ascribe negative motives, rather than negative results.

  4. Nemo – In general, I find your postings insightful, clear-headed, and blogfully diplomatic… but your above comment of “I had a dream” and “True story”… to me itsn’t “self-evident”… Are you claiming that Summers is pulling the strings because you have inside knowledge (True) or because it is apparent (as in a dream)??

    Either way, the general populace thinks we have skated past the crack in the ice, when in reality we are out deeper in the pond where the ice is thinner.

  5. I interpret your dream to tell that the issues at stake are way more than what words can heal, even the forceful words of the Harvard Hammer. It is a time for action, is what I would make of your dream.

    Nice story. It sure sounds like an accurate dream even if you had not pointed out that it is a true experience.

  6. Which brings me back to a question I would like to see answered objectively: how do “toxic” MBS asset prices look compared to September 2008? The repeated revisions to the better of the cost of TARP seem to suggest that prices were too low during the panic, but I have not seen a retrospective analysis of whether it was, in fact, liquidity crisis or a massive bank insolvency.

  7. For the record, by “true story” I mean I really had that dream last night. I am making no claims about reality.

    P.S. I agree Hoenig would be a fantastic choice to head Treasury.

  8. Who is ‘ever so gently’ floating this notion? You?

  9. My vote goes to Jamie Galbraith. Joe Stiglitz should get Summers job. Looking at the latest New York Times article on the budget, along with Krugman’s blog post about the depressing budget, we are in a lost decade. Then it’s supposed to get worse. We need people in these jobs who know what to do. Gosh, that’s what I was saying before the 2008 election. Why didn’t that happen?

  10. Poacher? Gamekeeper?

  11. That’s the right kind of kool-aid drinking, President Obama should consider—President Obama imagining the audicity of real goverance. Heads up to you, Simon, and readers, another one-on-one interview with Mr. Hoenig scheduled this coming Friday, 02.05.10. with PBS’ Nightly Business Rreport host Susie Gharib. The last interview with him is in archives, dated 11.17.08 (Susie Gharib interviewed Th=”/nbb is der-et=”_blaerviewed Thoy e. /nbr/blog/econte/ima)

  12. You probably ate too much chocolate just before bed time.

  13. There are a few sensible Republicans? Could you name them? I’m drawing a blank.

  14. Are we sure Hoenig hasn’t tried to cheat us tax payers out of $32,000?

    If so I’m for him.

  15. I don’t care who’s floating or how gently. That’s the best news I’ve had in weeks.

  16. Yours beats mine. I dreamed that the libertarians and street gangs were having a firefight in my neighborhood (in the mad-max world of tomorrow) and I was training my neighbors to adjust fire with the PVC mortar we made.

    Full moon and low atmospheric pressure…

  17. Simon, I hope that you are more than a passing acquaintence of Volcker’s (I suspect). Even if not, you should (by a multitude of connections that you no doubt have) seek his ear in this matter, because, it seems that he has the President’s ear. With B reconfirmed for another term (alas!!), we must take action to affirm responsible policy, and G is definitely NOT the one to do it. I love your suggestion, and feel very strongly that Tom Hoenig would be an ideal replacement for tiny Tim (mentally, that is). I just don’t believe that he could ever be capture by Wall Street. Maybe we should get word to the R’s, Barney and Bernie that he would make the optimal choice. After the Republicans bonor at having invited POTUS to their shindig in Baltimore, maybe they would love to have an R at Treasury. Oh, pleeeze, I know that it’s after Christmas, but Santa can come late to my house. All I want is a rational and tough Treasury Secretary so that we can stop holding our breaths collectively wondering what will be done in financial reform. It goes without saying that Goldman (under a Hoenig Treasury) would never have gotten 100 cents on the dollar for their rotting security insurance. But then, Neil Barofsky may yet have the last word on that.

  18. Colin Powell? He’d have his honor to restore too.

    That’s the only one I can think of. Then again I’d be hard pressed to find a sensible Democrat too. (Franken?)

  19. Hopefully this will happen soon. Having Geithner contradict the President’s “Volcker Rule” introduction gave the impression that someone was outside the loop.

    While it is possible that the President is the one on the outside, its more likely that Geithner is the outsider and will be sent packing relatively soon.

  20. What?! They want to replace Geithner? The looting is already over?

  21. Questions from an economic illiterate about keeping the fed funds rate at zero: If the fed rate is increased doesn’t it have the potential of setting off yet another wave of foreclosures, given the number of adjustable mortgages out there? I can understand why ARMs make sense when mortgage interest rates are at their highest, how do they make sense when rates are at their lowest? Wasn’t the fed rate reduced to zero to forestall the ARM foreclosure problem? Didn’t the bubble burst because we couldn’t go below zero?

  22. The market will react negatively, because it will sense the era of unlimited bailouts is drawing to a close. Sure, but that’s the point.

    One metric I’d use to tell if anyone’s serious is if he’s willing to stand up to stock market terrorism.

    So far, no one within the system…

  23. Franken was one of the “process” sociopaths who voted for cloture before voting against Bernanke.

    The process mentality is an inverse metric for sensibility.

  24. re: “the general populace …thinner.”

    Good imagery & description.

  25. My own dream is that Bernanke, Geithner and Summers are exposed for the corporatist shills they have always been, that people wake up realize that systemic risk is a euphemism for disturbing existing power and privilege, that letting AIG, GS and all the dependent banks suffer through bankruptcy reorganization would have produced exactly the correct response to thirty years of globalization, securitization, financeering and free market idiocy, that Obama wakes up to understand that this miraculous recovery is being financed by a generation of retirees whose savings of a lifetime now produce NOTHING, that what these savers have left will soon float into the stock market providing opportunity for hedge fund scammers to exit just before the s**t hits the fan, that it is time the Fed stopped paying interest on reserve deposits and the govt started paying 5% interest on short term deposits of small savers before all of them are simply eaten up by capital erosion and Wall Street finaglers.

    What I read about finance on a daily basis indicates that nobody really understands it. For those seeking understanding I highly recommend Philip Augar’s book, The Greed Merchants. The book is low key, even handed and devastating to the picture which investment banking paints on the virtues of financial innovation. If the country as a whole understood the lessons of this book there would be no place on earth for Lloyd and his buddies and his political stooges (including most of you know who) to hide out.

  26. He was my choice for Fed Chief!! Instead we got that “MAKE BANK AND BANKSTERS RICH AT ANY COST” Bernanke.

    I can’t wait for November and the election results ..

    ALL THE INCUMBENTS WHO ARE UP FOR RE-ELECTION AND WHO VOTED YES FOR THE CLOTURE ON BERNANKE SHOULD BE BOOTED OUT .. IRRESPECTIVE OF WHETHER HE/SHE IS A DEMOCRAT OR REPUBLICAN..

    But how do you ensure the guy is elected does not go running for the crumbs from the banksters is another question altogether

  27. Word Rich S.. The last person on earth I want posited at the Treasury is a republican. There are a vast field of potential candidates to replace the taxdodging, wallstreet insider, and Godlman Sachs minion currently holding the job, and ruining millions of families in the process. There is no compromising with republicans. There is no reaching across the isle. Obama continually exhibits this weakness out of true sportsmanship, or goodwill, or my dread concern complicity. All our politicians are in owned, purchased, and in the pockets of oligarchs, – but democrats at least hold some distant concern for the plight of poor and middleclass Americans, – the gop is works for the predatorclass exclusively, and while they talk populism from one tentacle of their forked tongues, – their actions across the board, and in every circumstance work to disadvantage and undermine poor and middleclass Americans to protect, shield, and advance the interests of the predatorclass who pay, fund, and contribute to them luxuriously.

    We need at least one progressives, a true democratic voice in a position of power, like the Treasury to counter the entirely onesided array of cacophonous screeching and dire threats from Wall Street insiders that currently running the show.

    Stiglits, Krugman, and you Professor Johnson if you are eligible.

    I agree with you that “Hoenig has been a beacon of clarity on this issue over the past year”, and that he is well qualified and a viable candidate, (anyone including Homer Simpson would be a marked improvement over Giethner who is a predatorclass minion) – but the nation (the other 99.5% of population) needs a progressive democrat at Treasury, with the courage and the determination to stand up to the oligarchs and whose responsibility is to “…run financial sector policy, meaning bailouts and how to avoid them.”

    Republicans and the gop in it’s current panjandrum are the bane of America and deleterious to the best interests of the other 99.5% of the American populations. Republicans work for oligarhs and brute their conjurings to redneck Amerika.

    Trust me brother, anyone is better than that swindling apologist, Wall Street insider, taxdodger, viper, and thief Giethner, – and maybe the right honorable Mr. Hoenig is a solid choice, – but many of us are tired of the status quo and want to see new idea’s and new visions, and real champions of the peoples best interest, (which is sorely lacking now).

    Get rid of Giethner, and lickity split, – but lets fish around for a replacement.

  28. I call bullsh!t. There’s no way the White House is soliciting names for Geithner’s potential successor. First, that’s not at all how cabinet-level nominations are handled. The White House doesn’t solicit suggestions from outsiders. I’ve been in politics for 26 years, including in the West Wing, and I’ve never once seen anything like that happen. Second, in the extremely unlikely event that the White House were talking about a potential successor for Geithner, there’s no way in the world that Simon of all people would know it. The White House tends to exclude loud-mouth, self-important pundits from such sensitive deliberations.

    Nope, this is just Simon pretending to be an Important Figure who’s “in the know.” Usually I see this kind of thing from 25-year-old LAs, not MIT professors. There’s an old saying in DC: “Those who talk, don’t know; and those who know, don’t talk.” Simon doesn’t know.

  29. Simon Johnson for Treasury Secretary!

  30. Exactly right. And the book by Augar was written way b e f o r e
    the crisis!

  31. Daniel Habtemariam

    Galbraith and Stiglitz certainly seem to care about unemployment, and for that reason, I’d support them.

    I’d respectfully disagree though with the notion that we don’t have people in those posts who know what to do. Just as in healthcare, do you really think Obama would veto a great bill written by an academic (for example, Simon Johnson)? that Summers and Geithner are so corrupt that they’d work to defeat a good bill? It’s plausible, but I doubt it. To me, the bigger problem is what you can get through Congress. Academics know what to do. But academics don’t run Congress.

  32. Really? You’re dreaming of Bernanke, Summer and Geithner? That’s so sad. First, let’s call it what it is; a nightmare. Second, stop looking at your stock portfolio before bed and start looking at your porn portfolio. You will have much better dreams.

  33. Jennifer Peter

    I dreamed of a fire in the middle of my living room. I could not get anyone to help. I picked up a stuffed animal and it turned into my dog and ran away. I called the fire department and when they came the hose was too short. I had a priest in the living room but all he wanted was another cup of tea and some cookies.

    I have 2 in college, a house I fixed up and cannot sell and a husband constantly worried about his job. Do you think they are related?

  34. “This makes some would be supporters – including fans of his attitude on TBTF – rather wary of advancing his name (e.g., as chairman of the Fed Board). This hesitation is understandable although likely mistaken; you don’t keep the federal funds rate essentially zero for long when nominal GDP is growing at more than a 6 percent annual rate.”

    I understand the rationale, but I’m more concerned with expected medium term (3-5 year) growth. Hoenig seems to believe in a backward facing rule (like a lagged variable approach). The original Taylor rule is an example.

    Here is the problem – If you have an economy plugging along at even keel, and you hit it with a negative shock, it takes 3 months before the Fed reacts. In that three months, the economy tanks. Then the Fed unloads with 10x the amount of stimulus that would have been required to prevent the collapse in the first place, and over the next 6 months the economy spikes. Then the Fed starts to get inflation jitters and tightens, and so forth… we get a cyclical dynamic (it’s like a simple oscillating system). Hopefully, the economy has some shock absorbers so that the oscillations fade over time.

    By contrast, a FORWARD-looking rule is inherently stabilizing. It’s a negative feedback rule. (In a closed system, negative feedback is good, positive feedback is bad – positive feedback means eventual system destruction.)

    What we had in Sept 08 was the Fed FAILING to lean against EXPECTATIONS, even as we had a massively unstable overleveraged system that simply could not endure 6-12 months of low asset prices in an MtM environment after 10 months of recession, and a Fed that continued to sterilize asset purchases in fear of commodity inflation in the rear view mirror.

    Plosser was the villain in 2008. But Hoenig was the ONLY dissenter out of 9 FOMC members in the most recent meeting… Do we really expect hyperinflation this year? Short Run Supply is flat, asset prices have peaked temporarily (simply due to the end of MBS purchases), final demand is still flat, the most recent survey said incomes are going up but not spending (instead, savings is going up). The PRIMARY issue is not expanding money supply, it’s expanding money supply without administrative mechanisms that force this money into the real economy instead of into asset bubbles. And the dollar is _still_ overvalued.

    Thus, Hoenig in Treasury would be splendid! It kills two birds with one stone (e.g. targeting TBTF, and getting him off the FOMC). :)

  35. A.L. Thompson

    Elizabeth Warren!

  36. Please, please just stop it. Colin Powell is a war criminal who should be in jail. He went before the UN and lied about everything. The blood of thousands and thousands of people are on his hands. “sensible”, I don’t think so.

  37. Leave this guy there getting grilled by congress for the whole four years. I want this guy on the hotseat. When he gets fired he is going to be paid more money than anyone can imagine. No one in history has ever had favors to call in for giving the fat cats hundreds of billions. He’s probably picking his island in the Carribean right now.

  38. The Republic is going to perish unless income inequalities are addressed, and I doubt any in the current cast in power care about that.

  39. Johnson, did Tom Hoeing ask you to write this? It seems to me an undisguised PR job. Good try.

  40. Thank you for the informative glimpse into the practical debate over replacing our corrupt Secretary of Treasury.

    I hope that Obama is listening to your insightful advice.

    Hoping and expecting are two different paradigms.

  41. What is known about Tom? How has his supervision of his banks been? What has his tenure been like at the KCFRB? It’s great that he now does not believe in TBTF but where was he prior to the financial crisis? Everyone now is against TBTF.

  42. I suggest Eliot Spitzer as the best replacement.

    He understands Wall Street and politics and is not afraid to be aggressive. His appointment would signal an administration determination to get tough with the financial community — a popular stance which would outweigh qualms caused by his past use of a prostitute.

    He is too bright to waste. The financial community would go bonkers — a decided plus.

  43. Elizabeth Warren, all the way. Just announcing her name would be enough to scare the bankers into doing the right thing. Her credentials and reputation are impeccable. When was the last time America actually had a economist that could create as much enthusiasm as she can?

  44. NotTimothyGeithner

    Sorry, there are no more sensible Republicans. If they haven’t realized what the GOP is, they are not sensible. They may not be crazy, but they don’t fit the actual definition of “pragmatic.” Maybe they are pragmatic by Village standards?

  45. Do you mean “asset bubbles rather than the real economy”?

  46. i sure hope that they do not get rid of tim he is the best thing that ever happened to the whitehouse bye for now your stat at home mom linda

  47. Geithner stays thru 2012, Larry Summers will make sure of it. Geithner is Larry’s boy toy at Treasury.

  48. i interpret dreams. Would have 2Question U to disclose the dream properly since some of personal iconography changes meaning from one person to the next even in ones lifetime. One thing can be said about it. Your bornWith clearVision is obscured by XYZ arising w/concepts you(all of us) fight 2Keep alive but your gut knows & sees clearly their folly{summoned to desk= explainSelfDecisions & comply2Power = allFolly}. My guess is your left is Satan side[Christian?] Right side is Giminy Cricket’s side. Summoned 2 the WH ultimate power but the boss is a banker w/power to debate and lobby his position[selfFulfiled Prophesy]. U intellectually abhor whatLobbying is doing 2ourCountry & feelPowerless over the merits ofArguments even when U know who is in the side of evil{your imagery & dream not mine} even when the whole biz is clear 2ur gut. There is a wealth of info in that dream ..learn 2meditate 2stop doubting your…your “Blink”
    be well and don’t sweat it ..please take my advise am not using it right now :-D

  49. ReturnFreeRisk

    We need Mr. Hoenig AT THE FED. He is one of the FEW sane voices left there. My opinion is BERNANKE wants to get rid of him (by sending him to the treasury) so that he can PRINT MORE.

    SEND BERNANKE TO THE TREASURY INSTEAD.

  50. Elizabeth Warren is not an economist. She’s a consumer bankruptcy law professor, with no training in economics. She’s woefully underqualified for the position of Treasury Secretary. You think Elizabeth Warren seriously understands international currency markets? Puh-leeze.

  51. I don’t want a REPUBLICAN anywhere near that position.

  52. Then appointing the likes of Summers and Geithner was a failure of the current process. I don’t see why the White House shouldn’t consult an economist like Simon Johnson who also possesses practical experience from his post at the IMF. SJ never claimed the White House was soliciting suggestions, but he did offer a suggestion for who he thinks should replace Geithner.

  53. Would Professor Johnson take the job?

  54. Stats Guy,

    Your statement that: “The PRIMARY issue is not expanding money supply, it’s expanding money supply without administrative mechanisms that force this money into the real economy instead of into asset bubbles,” seems very important to me. Previously you’ve called for direct subsidies/tax credits for infrastructure investments and matching grants to states willing to spend on certain kinds of approved projects to accomplish this goal of expanding the money supply into the real economy. President Obama’s comically named “cash for caulkers,” program seems to be a small-bore attempt to follow this line of thinking. Do you know of any other plans out there attempting to do the same? I’d like to get behind a politician really interested in combining fiscal and monetary policy in the way you describe here, but all I see in the media is endless harping on the size of the deficit/national debt. Sometimes I think we should just do away with debt issuance entirely and let interest rates fall to zero.

  55. Mohamed el Erian of PIMCO would be the ideal guy. Obama, if he is to replace Geithner, should take someone from the private sector, since none of his econ team is from outside govt, creating distrust on wall st. That said, I’m sick of the finger pointing at Geithner by pols who helped drive the economy off the cliff while Tim, Paulson and Bernanke helped save it and would’ve done better had their hands not been tied trying to keep Lehman from collapsing.

  56. “letting AIG, GS and all the dependent banks suffer through bankruptcy reorganization would have produced exactly the correct response to thirty years of globalization, securitization, financeering and free market idiocy”

    another trenchant Jake Chase comment

  57. Watch Summer’s interview on Charlie Rose from the Davos meeting.
    He rarely made eye contact, pontificated, blustered, and bloviated.

  58. Peter van Schaick

    On the subject of Hoenig for Treasury, he spoke in NYC several months ago. He comes out of enforcement. He believes in the RTC approach to troubled banks, i.e., take them over, clean house of the managers who created the problem, write down bad debt to current value, and turn them back to the private sector. He spoke out strongly against the current approach.

    Hoenig seemed concrete, practical and experienced in bank workouts. He might make an excellent “tough cop” contrast to Elizabeth Warren’s “reasonable professor.”

  59. Hoenig is, and Geithner was, a Fed President, not a governor. The equivalency between the two men is a false one. Geithner ran the Regional Bank that impliments Fed policy. He was at the center of the crisis (take this to mean whatever you like) and also at the center of the Asian Crisis (this, too), while Hoenig was merely close to the center.

    The fact that Hoenig shares some views with Simon is not, in itself, reason to put him at Treasury, but that is more or less the rationale offered here. Running a Regional Fed Bank ain’t nothing, but it is far from a demonstration of the ability to run the Treasury. And running the Treasury is one of the bigger parts of the job. By the time Hoenig could be confirmed, even if nominated today, the momentum behind various policies would be difficult to change, so his own policy views would either validate those of the administration – so would be the reason he would be chosen – or would mostly have to give way to policies in place. So we need a guy who gives good advice, no matter what the policy choice, he will make it less bad than it could be, and we need a guy who can run a big department, and we need a guy who doesn’t make a whole bunch of ideosyncratic mistakes. Nothing here suggests he is that guy. He may well be. I’ve got nothing against him. But the case made here is pretty flaccid.

  60. actively soliciting suggesstions would be appropriate.

  61. Your misogynism is showing. Elizabeth Warren probably has more knowledge of economics in her left little toe than 90% of the commenters on this board, including you. Probably, she’s too smart to take the job of Treasury Secretary, although I agree with Matt Bird: just mentioning her name would scare the beejesus out of Wall Street and the banksters. More importantly, though, I think it would cause Larry Summers to have to repeatedly change his underwear, or sit for long periods on the toilet…maybe even to leave the administration altogether.

  62. Jawaralal F. Schwartz

    Why is hearsay being bandied about as if it was hard news? Is this the standard of this publication, eh?

  63. Bernacke and Geithner and Summers are just the guys we know about who happened to work in public office. The real criminals are on Wall Street and the sooner we shut down the packaged asset trading and make give all stock holders and vote in the leadership and operation of the companies they own, the thievery will continue.

  64. I agree with Peter.

    Elliot Spitzer had his personal problems. But hey, I think he would take on the big banks and the financial fat cats with a zest like another Elliot took on the bootleggers. That would be Elliot Ness.

  65. Middle and poor Americans did not get America in the Dilemma she now find her self in
    It did not happen over night,
    It was not by a specific party
    The problem cannot be fixed in one year.
    America has a culture problem that first has to be addressed

  66. I think Elizabeth Warren should have a cabinet level appointment as a Consumer Advocate. This is not the right role for her. She is someone we need to hear from at the highest levels. If she is placed in the role of protecting consumer rights I think she will be as fondly remembered as FDR’s labor secretary Frances Perkins.

  67. Allow me to agree with jake chase’s comments. I ask myself every day what kind of fool I’ve been to invest and save all my life (I am over 60) and now I have little to show for it but hear constantly about “too big to fail” and “stimulus”. Sure, let’s take care of the MBAs and bankers.

    I have a Masters degree. But I am being told that I need to return to school in order to be qualified to get a stimulus job laying asphalt on the roads or perhaps repairing other sadly neglected infrastructure. I’ll get right on that…. after I figure out what happened to the concept of retirement. Oh yes, and I’ve been out of work for a year now…

  68. unless my checklist was wrong, Franken voted no x2. I have my paper checklists right here. My numbers checked w/ the final tallies, so I didn’t bother to look for misallocated checkmarks. Check out Franken’s amendment to the health care bill – the one that capped profits. He’s on the good side (so far).

    Broadly defined, every soldier that does not desert (even then…) is a war criminal – including myself. Come and arrest me!

    My point was that there are people of personal integrity on either side that might have the motivation AND courage to make real changes that benefit the PEOPLE. These individuals must be identified and supported, regardless of party affiliation. Expecting them to be as pure as new snow is completely unrealistic – they will probably be filthy insiders with a lot of guilt to expunge.

  69. Can we ask Summers to give back the millions he earned in ‘speech’ fees from said Wall Street criminals?

  70. As leak free as a Tyler #200 sieve.

  71. Economists and bankers have managed the position soooooo well over the years, why would we want anyone else in the position?

  72. While I agree, his name alone would invoke a racist backlash. An atheist would have a better chance at being elected president that el Erian would at getting confirmed.

  73. Shudder. The main reason I’d go for him for Treasury is to get him out of having authority over interest rates for the next year or so. Having him as Fed chief would be a disaster.

  74. I completely agree with all of this. Can we get you in the FOMC somehow??

  75. Siggy Fashizzle

    Wow, synchronicity! I had a dream the other night where I was a Krispy Kreme donut and Bernanke, Geithner, and Summers were racing sausages chasing after me. What do you think that means???

    http://milwaukee.brewers.mlb.com/mil/fan_forum/racing_sausages.jsp

  76. Ugh, spoken like a true partisan, which is exactly what we need less of. Mr. Johnson is right, we need someone honest and competent who will not be captured. Whether he is a Democrat or Republican is much less important, and I feel sorry for you if you really think that is the most important thing. (And I usually tend to vote Democratic, for what it’s worth.)

  77. That’s what’s happening – the goal should be the opposite.

  78. Unfortunately, no. Most pols on the dem side seem to be more concerned with maintaining transfer programs intact, even going so far as to cap non-military discretionary spending. Long term investment credits would fall into discretionary spending. The Build America Bonds program probably was a step in this direction, although it’s hard to say what % of municipal bonds is going to investment vs. budget (especially taking into account budget shifting). Team Obama has lots of little good ideas in this area. Little being the problem – they are utterly dwarfed by the projected increases in transfers.

  79. I went to double check and here’s what I found:

    http://thehill.com/homenews/senate/78597-senate-puts-bernanke-one-step-closer-to-second-term

    There were six Democrats who switched their positions on the votes. The six Democrats voted in favor of cloture, but opposed Bernanke on the final vote. They were Boxer, Dorgan, Franken, Harkin, Kaufman and Whitehouse.

    But I agree with your basic point, though I think if any filthy insiders want to expunge their guilt, now’s the time to start. No takers yet.

  80. I agree. Out with Bernanke! Stats Guy for Chairman of the Federal Reserve!

  81. Boy, I couldn’t agree with you more. I would pay serious money to see Bernanke, Geither, and Paulson in jail. In my opinion they did far more damage to this country than Hitler, Saddam Hussein, and Osama Bin Laden.

    Greenspan was bad, yes, for keeping interest rates low. But the damage he did was as nothing compared with the destruction those three did cleaning up the mess. By bailing out the Rich and Powerful and Politically Connected they have not only ensured that our economy is going to experience a Japanese style great depression, they have destroyed the basic American social compact. They are nothing less than traitors, willing to betray our country for private gain.

  82. Yes, I believe Geithner is definitely corrupt enough to work to defeat a good bill. He is a wholly owned subsidiary of Goldman Sachs, Morgan Chase, Bank of America and Citibank. Is he that way because of cognitive capture or corruption? I don’t know, and I don’t care. But his DEFINITON of a good bill is a bill that is good for Goldman Sachs, Morgan Chase, Bank of America and Citibank.

  83. Good question. How many banks in HIS region have been closed by the FDIC?

    The 10th district doesn’t include any of the states that were ground zero states for the housing boom/bust (Nevada, Arizona, California, Florida or Michigan ), so that is a good sign.

  84. Boy, you’re way nicer than I am. I would say any incumbent who voted for Bernanke OR THE BAILOUT BILL, should be booted out of office.

  85. Send Bernanke to Zimbabwe. He would be a real voice of restraint on printing money – compared to Mugabe. Or to Venezualia! Another place he would be a real influence for restraint in hyper-inflationary monetary policy. In fact, let’s be selfish and say ‘Anywhere but America’.

  86. Dr. Elizabeth Warran, Dr. R. Reisch or … someone NOT necessary from FED RESERVE… why?

    They could have controlled better before the fall out of WS…

  87. Not caused by a specific party? That’s very diplomatic of you, but I must disagree. Take a look at the economy foisted upon us by Reagan, slowed a bit by Bush Sr. and then turned around during Clinton’s administration. Take a look at the projected Budget surplus we were looking at in 2001 compared to the projected 10 deficit Obama inherited. I think that at no other time in American history has the cause and effect of supply-side economics vaunted by the GOP been more apparent.

    The rest of your comment I concur with 100%. I was going to say 100 and 10% but I was afraid that might make you doubt by ability to analyze the economy.