Bastiat's Bastions

I will be more interested in the transition to the Obama Presidency than any presidential transition I’ve witnessed. Why? The $700 billion financial industry “bailout.”

One thing that seems clear is that the new Treasury secretary is going to have to deal with a partially implemented (partially developed?) policy. I guess the best we can hope for is that someone comes in with enough experience to deal with the recently invented (complex) financial securities. I have no expectation that the new regime will try to undo what Paulson’s Treasury has started. For these reasons, I don’t think Paul Volcker is the best choice – he has been too far removed from this stuff for too long.

According to this article, though, Volcker is under consideration for the Treasury Secretary position. Volcker was the Federal Reserve Chairman from 1979 to 1987, and he recently headed up the investigation of the United Nations’ Iraqi Oil for Food program. Others under serious consideration include Larry Summers (Treasury Secretary under Bill Clinton and former president of Harvard) and Timothy Geithner (currently the president of the Federal Reserve Bank of New York).

The article I linked to above also names several unlikely candidates, such as Warren Buffet (investor), Janet Yellen (San Francisco Fed president), Jon Corzine (former investment banker/governor of New Jersey) and Alan Blinderm (former deputy Fed chairman). Not that anyone is going to ask me, but it seems like Geithner would be the best choice because he’s most involved in what is currently happening.

The article quotes an economist from Maryland named Peter Morici: “If we can’t get Volcker, I’d prefer they turn to somebody who’s unknown, like a Midwestern banker who has had experience with Federal Reserve affairs, someone who does old-fashioned banking, gives loans and gets repaid,” said Morici.

I guess this sort of makes sense, but old-fashioned banking is the last thing the new Treasury Secretary will be involved in for quite some time. I really think Volcker would be more of a political (safe) pick than a practical pick. But, Obama doesn’t have my email address, so I’ll just wait to see what happens.

NM

This entry was posted on Thursday, November 6th, 2008 at 10:43 pm and is filed under Financial, General. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.