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Will Obama Whack Geithner and Anoint Volcker?

Posted by Larry Doyle on January 21, 2010 8:54 AM |

Geithner, Obama, Volcker

One year into his presidency, Barack Obama is losing support from many corners. The American public is clearly sending Obama specifically and Washington at large a strong message of disapproval. Obama’s liberal base of support within the Democratic Party is growing increasingly disenchanted. Individual supporters such as The New York Times’ Paul Krugman are backing away from Obama.

Obama and team have nobody to blame but themselves. They were elected to bring real change to Washington. The American public defined that change as embracing real truth, transparency, and integrity. To this point, Obama has fallen woefully short on all these fronts and proven himself to be ‘just another politician.’

Obama has tried to scale Mt. Everest when in fact the American public and economy were merely and are still trying to get back to sea level. As Obama looks to regroup and reconnect with the American public, what will he do?

Obama fancies himself a grand visionary and masterful, bold leader. As much as his henchmen (Geithner, Summers, Bernanke, Schapiro) are aligned with the powerful, monied elite on Wall Street, Obama wants to be known as a man of the people. He is quickly learning he can not have it both ways.

So what will he do? My better half and I just had this very discussion. Obama knows his biggest problem is the public perception that his administration has protected Wall Street at the expense of Main Street. He can and is looking to implement procedures which would appear to tax Wall Street and benefit Main Street. In my opinion, these taxes are a mere disguise. The taxes will be collected over a long period of time. The taxes will likely serve to further cement the mantle of “too big to fail.” The taxes will also be skirted by the Wall Street derivative magicians wherever possible.

If Obama thinks the American public will buy these taxes as his means of going after Wall Street in order to protect Main Street, he is sadly mistaken.

Rightly or wrongly, Americans link the message with the messenger. To this end, as long as America sees Tim Geithner delivering the economic message of the day, they will not buy what Barack is trying to sell.

What is the end result of this reality? In order for Obama to rescue his presidency and recpature the support of the American public, I fully believe he will sacrifice Tim Geithner. In doing so, whom can he appoint that has credibility in the marketplace, on the global economic landscape, and with the American public?

Initially, I would have thought Obama would tag JP Morgan’s Jamie Dimon to be the next Treasury Secretary. Not now. What about Elizabeth Warren? No way.

I believe Obama will once again attempt to be bold and appoint Paul Volcker as next Treasury Secretary. Yes, Volcker. The proponent of the reinstitution of the Glass-Steagall Act.

If I’m Tim Geithner and I have yet to sell my house in Westchester County, I’d take it off the market.

What do you think?


  • Matt

    I think that would be terrific Larry. I would love to see Volcker come in and raise interest rates and tighten monetary policy like he did in the early 80’s under Reagan. I would also love to see him reinstitute Glass Steagall. Actually, I would prefer to see Volcker as the Fed Chairman, but I totally agree that Geithner has to go. The stock market wouldn’t like Volcker in the sort run, but I think he would be very good for our overall economy and our country in the long-run.

  • Duke

    America has not trusted Timmy ever since it was revealed he is a tax cheat. Obama should have ruled him out once he learned that in the vetting process.

    Not “was” a tax cheat. Once a cheat…he will ALWAYS be known as a cheat. His tax cheating was no mere oversight. It displayed a real lack of character.

    I agree Volcker would be well received. He certainly can not be any worse.

    Throw Geithner out and tell Summers to go along with him.

  • Pat J

    Agreed….my financial aid was cut dramatically in 1980 once Reagan came into office. I picked up a part time job to make up the difference and put my best foot forward. Everyone needs to put their best foot forword.

  • Randy

    I happen to agree with your choice of Volker but I am sure that choice would just about give Larry Summers a coronary. That of course is not a bad thing as Summers really has to go as well as ably noted by Duke above.

    However, since Obama has failed to make any good people choices thus far, what makes you think he would sign on to bringing in Volcker? After dumping Timmy, he won’t be able to blame further failures on yet a second Secretary of the Treasury. Also, Volcker has been heavily critical of the current Administration’s policies and the rest of the Obama team is not likely to play well with him.

    Anyway, let’s hope you are right, Larry.

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