StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



More NEC/Treasury Speculation

06 Apr 2010
Posted by Bruce Bartlett

Stan is right that OMB Director Peter Orszag isn't going anywhere anytime soon. The more interesting question to me is if Larry Summers leaves the National Economic Council will the White House use his position to groom a successor to Treasury Secretary Tim Geithner?

Keep in mind that one reason for creation of the NEC in the first place was to give Bob Rubin someplace nice to hang his hat while waiting for Lloyd Bentsen to move on after being given Treasury to protect Bill Clinton's right flank. Keep in mind also that Geithner is widely viewed as being under Larry's protection. Without that it is quite possible that Tim would be gone already, given the generally poor grades he has gotten from across the political spectrum. Finally, remember that the appointment as NEC director does not require Senate confirmation, which may be an attractive quality in this political environment.

Someone like Roger Altman, former deputy Treasury secretary, might be a good replacement for Larry and, eventually, Tim. Knowing how badly Roger would like to be Treasury secretary, I'd start packing my bags if I were Tim and Roger became my de facto White House boss.

I think Jon Corzine may also have aspirations for being Treasury secretary, but considering how badly his term as governor of New Jersey went I suspect that considerable time will need to pass before he is politically viable again. 

Addendum

Jonathan Bernstein disagrees with my lack of enthusiasm for the NEC. 

Corzine is looking better

as Chris Christie keeps trying to take from the schools and workers and give to the billionaires.

But he just took a Senior position with MF Global--they stopped talking with me about the same time, though I assume not for the same job--and doesn't need to park himself in the "shadow" of someone, er, of Geithner's obvious skillset.


NEC head is Treasury Sec boss?

I just want to make sure I understood you; the view in Washington is that the head of the NEC, which does not take Senate confirmation, is the boss of the Treasury Secretary, which does?

I have not grounds to dispute that and I'm not doubting you; I would just say that as an interested political and economic observer from outside of government, I would never have imagined that that was the pecking order.


Treasury

Not institutionally of course. Technically, all cabinet secretaries work for the president. However, who the president chooses to listen to overrides technical rank. Also, personal relationships matter. It's often the case as a practical matter that the NSC adviser has far more influence on foreign policy than the secretary of State. I'm suggesting that Summers probably has more influence on economic policy at the moment than Geithner.

It's really no different than in the military. One's rank determines one's pay grade and the perks that one is entitled to. But in terms of one's responsibility and power, rank doesn't always tell you who is actually in charge. 




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