Friday, May 25, 2012

Secretary Geithner on risk and heat


I've always been pretty curious about Treasury Secretary Timothy Geithner. No one in the Obama administration walked into a tougher job and next to Attorney General Eric Holder, none has been so reviled. When conversing with the poutragers, it often seemed as though they thought all they had to do was say his name and the failings of the administration would be obvious.

I did my best to try to understand some of the advice Secretary Geithner gave the President and the choices that were available to him. The truth is - I think he's done a good job with the hand he was dealt. And yet even amongst the President's supporters, you rarely hear a positive word about him.

That's why I was intrigued when I read the commencement address he recently gave at his alma mater, the Johns Hopkins University Paul H. Nitze School of Advanced International Studies. It gave me a little insight into the person behind the policies. Here are some excerpts you might find interesting.
You will find lots of people in public life who worry more about how they appear than what they accomplish, who fear the risk in any action, who let preoccupation with perception and politics get in the way of doing the right thing.

What you should take from this story is that if you are going to make a difference, especially in public life, you need to be willing to get close to the flame.  You need to be willing to take risk and feel the heat.   You have to keep your focus on the cause you are called to serve and the craft of doing the job well...

The damage from the financial crisis was greater because it hit an economy that had already been suffering from a slow-burning mix of other challenges.  The erosion in the quality of public education, the decline in public infrastructure, an alarming rise in poverty, a long period of stagnation in living standards for the median worker, the rise in public debt.

And these challenges are all magnified today by the paralysis in our political system—a paralysis that reflects and amplifies the deep divisions across the country about the role of government.

Our economic challenges are tough, but the critical test we face is a political challenge:  how to recapture what was for most of our history our defining strength: a political system that was able to marshal the wisdom to do wise and hard things, with a long-term view of what determines national economic strength...

If you choose to work in public service, and if you have the chance to work on the great economic challenges ahead, then you will learn, as I have, a few of the things that matter most in government.

Don’t put politics ahead of economics.  Polls may tell you what seems popular.  They can show you the political obstacles to reform.  But they cannot tell you what is the right thing to do.  They are not a reliable guide to good economic policy, particularly in a crisis, when all the options seem terrible to any sensible person.

Retain a healthy skepticism about the world, and a lot of humility.  You should be profoundly skeptical about the easy policy option.  Be skeptical of those offering excessive conviction on any issue. Don’t expect people to behave rationally.

Know that you will often have to act in areas where the fog of uncertainty is thick and heavy.  This should humble you, but you can’t let it paralyze you.

In government, you need to have a view, and to know what you are for, not just what you are against.  It is not enough to be able to explain the risks in any option.  You have to be able to decide and to choose.  Plan beats no plan.

In economic policy, your job is to try to relax the political constraints on policy, not simply to resign yourself to live within them.  But still, you have to govern with knowledge of the possible, and to be able to choose among the feasible alternatives, not be caught too long in the search of the theoretical ideal.

In confronting the financial crisis, we were fighting two battles—one to save the economy from collapse, and one to convince the American people that we were doing the right thing, the fair and the just thing.  We won the first of these battles, and we are still fighting the second.

At the height of the crisis, President Obama made a difficult and courageous choice.  He decided not to alter economic strategy to fit the demands for a more simple and compelling popular narrative—that we nationalize the banks, for example, or let them all burn. 
He did not let politics get in the way of doing the right thing, and that made all the difference.

So, graduates of the class of 2012—you already know you have to be prepared to take the risk and heat.


  1. Great speech, and Tim has a deliciously wry sense of humour:

    I remember in those early weeks receiving from a friend a copy of the Teddy Roosevelt quote about “the man in the arena.” You may know the quote. It starts like this. “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by sweat and blood…”

    I thought that was a thoughtful gesture from this friend, and then, well, about 10 more people sent me the same quote, and I thought, well…this can’t be good—they must really be worried about me.

    1. That quote from TR certainly sums up President Obama, I'd say.

      I'd also say that the whole lot of his critics on both sides couldn't do a better job if they were in his position.

  2. I've always been a fan of Geithner, and the more I kept seeing people complain about him being a "bankster" and even Rahm's wife telling him he must be anxious to get back to Goldman Sachs, I knew he was gonna have a long row to hoe. Fortunately he had the best person on his side......PBO.
    I'm glad to see him still standing.

  3. There was so much dis-information about this man, I couldn't believe it. But I walways had faith that our President knew what he was doing when he hired him for Treasurey. Most of the problem is we aren't fully staffed yet and you can blame the Repugs for that. Have a wonderful Memorial Day.

  4. I have always believed Tim Geithner was criticized unfairly--from the left and the right. He and his people, however imperfect, have succeeded beyond what any rational person could have expected, given our poisonous political climate. I also believe our economy could have been booming, if the Obama-Geithner policies and had been given a fair chance. Europe is a harbinger we can't afford to ignore. I hope fear, hatred and ignorance doesn't succeed in destroying all the gains we've made. When Obama said 'change is hard', it wasn't just a slogan. The Far Right and The Far Left convinced themselves, and others, that Obama made promises which he never made. Our President has tried to treat us like adults and tell us the truth. I guess some people just 'can't handle the truth.'