May 18, 2009
Disorderly Decisionmaking at Treasury
Posted by David Zaring

The Washington Post has a takedown of Treasury Secretary Tim Geithner's management style today.  It fits into that Democrat v. Republican organization narrative, where the former have too many geniuses running around, not enough command and control, everyone leaks, and the White House interferes with everything:

While federal departments often experience a degree of upheaval when administrations change, the difference between the Treasury of former secretary Henry M. Paulson Jr. and Geithner's has been stark. Under Paulson, the department nearly always made its own decisions. The Bush White House, nearing the end of its tenure, hardly intervened.

But now, even minor matters, such as Web site design or news releases, are reviewed by the White House. Staff members detailed from the National Economic Council, reporting directly to Obama senior economist Lawrence H. Summers, roam the Treasury building. Treasury staff members working on restructuring the nation's automakers took much of their direction from the NEC, sources said.

Some observations:

  • Geithner obviously does have a political management problem if he is running things through 20 person meetings of his counselors and consults Summers on everything.
  • That might harm the direction of the bailout, but it has never been clear to me that organized political leadership helps departments run more effectively; it could be, of course, that the roles of deputy and undersecretary are being run by career bureaucrats right now.  They won't be able to announce bold new directions, or sell them to the White House, but that doesn't mean that programs can't be administered.
  • Paulson's Treasury Department made a new decision every 14 days that completely changed course.  Geithner's Treasury Department announces a new program every 14 days that then takes longer to get off the ground.  It could be that various accusations of disorder are inevitable in the midst of a financial crisis.
  • This story is late in a news cycle.  Treasury is looking much more competent now than it did in February.
  • When you see a takedown story, you have to ask: who is the source?  Summers may not want people confirmed to Treasury because he enjoys co-running it.  But that is a very dangerous game.  The Hill obviously is annoyed, but it is always annoyed, and Geithner is much more consultative than Paulson.  I'm not sure that the banks are taking their revenge for the stress tests.  It does suggest that this "Geithner is overmatched" narrative is an appealing one, and that newspaper reporters will listen to fed up senior staffers re-articulate it.

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