So I go away for a few hours and the whole world changes? Apparently Barack Obama has made a decisive move to fill out his cabinet and we are about to witness three appointments: Tim Geithner at Treasury, Hillary Clinton at State, and Bill Richardson at Commerce. All three come steeped in experience on Capitol Hill and the U.S. Government. However, all three are fairly safe picks too. Whether this is change we can believe in is only time will tell. At a minimum, we know that Obama is going to make swift and reasoned if conventional decisions as President.
President-elect Barack Obama on Friday moved toward nominating Timothy Geithner as Treasury secretary and charging the respected head of the New York Federal Reserve with helping pull the United States out of an economic nosedive.
New York Sen. Hillary Clinton appeared headed to be nominated as Obama’s secretary of state, bringing his one-time main Democratic rival into the fold in a pivotal role in his new administration.
Geithner, 47, had been seen as one of two main candidates for the Treasury job along with former Clinton administration Treasury chief Lawrence Summers.
U.S. stocks soared on the Geithner news, first reported by NBC News, pushing major indices up more than 6 percent. The Dow Jones industrial average closed above 8,000, an important psychological trading level.
Obama may consider Summers as a possible successor to Federal Reserve Chairman Ben Bernanke, whose term ends in January 2010, a Democratic source said.
Clinton, wife of former President Bill Clinton, appeared set to take the top U.S. diplomatic post after wrestling with whether she wanted to give up her Senate seat.
“We’re still in discussions, which are very much on track. Any reports beyond that are premature,” Clinton senior adviser Philippe Reines told Reuters.
The New York Times said it was a done deal. “She’s ready,” The Times quoted one of two Clinton associates who confirmed the deal as saying.
A senior Democrat told Reuters in Washington that Obama wanted Geithner for the Treasury job, but had yet to make an offer. He did confirm that Summers was no longer under consideration. “Summers is off the list,” he said.
The New York Times reported that Obama was likely to name Summers as an economic adviser with the expectation that he will eventually be tapped for the Federal Reserve Board and perhaps as Bernanke’s successor.
As a finance guy, I am hopeful that the Geithner appointment will prove to be the right one given how questionable Hank Paulson’s judgment calls have been during the crisis. However, it does concern me that he was very much a factor in the Lehman, Bear Stearns and AIG crises where the Government didn’t exactly knock the ball out of the park. I am going to leave my comments at that. For a different view, take a look at what Yves Smith has to say about this.
Oh, and by the way, the market really rallied on the Geithner pick, ending up 6 1/2%. Does that mean anything, though?
Obama moves to pick Geithner for Treasury – Reuters