President-elect Barack Obama will appoint Timothy Geithner 83, president of the New York Federal Reserve, to the post of Treasury Secretary in the new presidential Cabinet, according to reports from several news outlets. Geithner will be the second consecutive Dartmouth alumnus to hold the position, replacing current Treasury Secretary Henry Paulson 68.
Officials associated with Obamas transition team released information about Geithners appointment Friday, though Obama is not expected to officially announce his choices for Treasury Secretary and other Cabinet positions until Monday, The New York Times reported Friday. News of Obamas choice led to an abrupt boost in the stock market, which had been in free fall throughout the week. The Dow Jones Industrial Average was up nearly 500 points for the day and above 8,000 points at closing.
Geithner has been described as post-partisan, youthful and a technocrat on multiple occasions, and his management approach is seen as complementary to Obamas. Geithner has worked with both Democrats and Republicans, working for the Treasury department under the Clinton administration before taking over the N.Y. Fed under President George W. Bush. His experience with both parties will help defuse partisan criticism, according to The Times.
While some have questioned whether the youthful-looking Geithner, who is 47, can command the respect necessary to ensure the financial industry will follow his lead, few question his resum or experience in economic matters, the Washington Post reported Friday.
Geithner has a background in crisis management a critical asset to the new Cabinet due to his work as undersecretary for international affairs during the currency crises of the late 1990s. Geithner has also been on the front lines of the current economic crisis, brokering the sale of the failed Bear Stearns to J.P. Morgan Chase in March and working closely with Paulson on the $700 billion federal economic bailout plan. He was also instrumental in managing the government bailout of American International Group.
Yet Geithners pivotal role in the decision to allow the failure of investment giant Lehman Brothers could continue to come under scrutiny. Geithner may also face criticism regarding the AIG bailout, which has cost taxpayers over $60 billion more than initially projected.
So far, no news has surfaced about Geithers potential replacement as president of the New York Fed. The New York Federal Reserve is one of the most important of the nations 12 Federal Reserve banks, due to its proximity to Wall Street and many of the countrys leading banks. The new president of the reserve will be appointed by the Federal Reserve Board, not Obama, which raises questions about how the turnover may affect the Feds management of the economy.
Former Treasury Secretary Lawrence Summers, who was also on the shortlist for the position, will likely be offered a post as senior economic adviser to Obama and could potentially be given the chairmanship of the National Economic Council, the Post reported. Geithner worked under Summers in the Treasury department throughout the 1990s.
Summers, who served as president of Harvard University from 2001 to 2006 but was forced to resign, is one of two prominent figures from the education world in line for positions in the Obama administration, according to the Chronicle of Higher Education. Linda Darling-Hammond, an education professor at Stanford University, currently leads the Obama transition team on education and is reportedly being considered as Secretary of Education.