The likelihood that Treasury Secretary Timothy F. Geithner may resign from his post later this summer is the latest sign that President Obama’s team of economic advisors is disintegrating as the economy grows weaker.
With the nation’s 9.1 percent unemployment rate worse than it was when Mr. Obama took office in 2009 and the economy slowing to less than 2 percent growth, Mr. Geithner’s signal that he wants out further diminishes whatever confidence the country still has in his economic policies - and polls show that isn’t much.
The former president of the Federal Reserve Bank of New York is the chief architect of Mr. Obama’s economic strategy, which is under fierce attack from Republican presidential contenders and grumbling from Democrats on Capitol Hill who fear their party will suffer deeper losses if the economy doesn’t recover this year or early in 2012.
Mr. Geithner is the last big-name adviser from Mr. Obama’s original economic team. One by one, the rest have left in the past year, some of them with parting shots that the economy needs a much stronger stimulus than it got in 2009 if it is to get back on its feet before Election Day.
Gone are Larry Summers, Mr. Obama’s chief White House economic adviser, who headed the National Economic Council (NEC); Christina Romer, who chaired the president’s Council of Economic Advisers; and longtime Obama adviser Austan Goolsbee, who briefly took Mrs. Romer’s place, only to return recently to the University of Chicago.
Should Mr. Geithner leave, as senior officials have intimated he will, that will leave a thin, faceless team of advisers at a time when the economy demands a team of heavy hitters who can command the respect of the business community and Wall Street and recalibrate Mr. Obama’s policies for the 2012 campaign.
Gene Sperling, who rose to become Treasury counselor under President Clinton, has moved into the NEC’s directorship, but he is not a trained economist and knows less about creating jobs.
Mr. Geithner has indicated that he will remain onboard at least until he has wrapped up negotiations with Congress to raise the debt limit and cut spending during the next 10 years.
Few in the party’s far-left liberal base will shed tears if he leaves. He was one of the chief architects in the George W. Bush administration’s Wall Street bailout in 2008. He fought to protect big bonuses for financial traders. His prescriptions to deal with the tsunami of mortgage foreclosures and pull the housing industry out of its slump have been ineffective at best.
Should he leave by summer’s end, that would precipitate a battle royal over his replacement and ignite new debate in Congress over Mr. Obama’s economic policies just as he turns his full attention to his re-election bid.
“It’s going to be an opening for the Republicans to put the Obama economic policies on a big public trial,” said economist Kevin A. Hassett of the American Enterprise Institute to The Washington Post.
The ongoing dismantlement of Mr. Obama’s economic team comes at a time when there is little left in the government’s shrinking bag of stimulus tricks.
The administration’s infrastructure-spending stimulus is slowing to a trickle. The Federal Reserve is pulling away from its ineffective “quantitative easing 2” bond-purchasing initiative to inject new capital into the nation’s economy. The White House all but admits it’s out of ideas to pump up the economy. Indeed, it’s still pushing for higher taxation on industries and investors, which would further slow an already tepid growth rate.
Meantime, former Massachusetts Gov. Mitt Romney is aggressively stepping up his attacks on the Obama economy in major industrial states hit hard by high unemployment.
Last week, Mr. Romney went to the shuttered, barbed-wired Allentown Metal Works plant in Pennsylvania, which Mr. Obama had visited with much bravado in 2009, saying it was the kind of factory that his $800 billion spending stimulus bill would keep open. It closed earlier this year, laying off all of its workers.