Is It Just Us, Or Did Tim Geithner Get Fired Yesterday?

Henry Blodget of Clusterstock

Earlier this month, we argued that it was time for Treasury Secretary Tim Geithner to go.

Our logic was simple:

• Geithner’s save-Wall Street-at-any-cost policy has failed (the banks aren’t lending), and it is distorting fairness and competition throughout the economy

• Geithner’s role in the AIG bailout and cover-up continues to undermine confidence in the current administration (and makes it impossible for the current administration to blame AIG on the last administration)

• Geithner’s “too big to fail” bailout policy has led directly to today’s Wall Street bonus fiasco: There’s no “bonus problem” at Lehman or Wamu.

• Geithner’s insistence on always putting Wall Street first has contributed to the populist rage that is now sweeping the nation and bludgeoning Obama in the polls.

We still think Geithner should go. But we’re startled at how quickly Obama seems to have come to the same conclusion.

Judging by yesterday’s Get-Tough-On-Banks press conference, it seems like Geithner is on his way out the door.

Recall the opening words of Obama’s short speech:

Good morning, everybody. I just had a very productive meeting with two members of my Economic Recovery Advisory Board: Paul Volcker, who is the former chair of the Federal Reserve Board, and Bill Donaldson, previously the head of the SEC. And I deeply appreciate the counsel of these two leaders and the board, that they’ve offered as we have dealt with a broad array of very difficult economic challenges.

Note the immediate shout-out to Paul Volcker and Bill Donaldson. Note the glaring omission of Tim Geithner and Larry Summers. What Obama was telling America was “I just had a meeting with two new advisors, and, based on what they said, I’m launching a new policy.”

Note, too, that the new get-tough-on-Wall Street policy is explicitly called, “The Volcker Rule.” (That in itself is shocking. Volcker is just an advisor. Tim Geithner is Obama’s Treasury Secretary.)

Tim Geithner was at the press conference, way down the line — but, by some accounts, he spent most of it staring at his shoes. He is also said to disagree with the new policy (we have problems with it, too).

At the very least, yesterday’s press conference seemed designed to tell America that Tim Geithner has been marginalized, that Obama is now (finally) committed to change. More likely, it was a prelude to Geithner formally being shown the door.

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