Reply #17: Ooooh. This is good. Geithner inspires "no confidence" among staff. [View All]

[ozymandius]

Washington Post Raises Doubts About Geithner Management Style, Status of PPIP

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The (WaPo) story is noteworthy in other ways. It suggests that Summers has considerable sway (duh!) and the PPIP has been delayed (it was supposed to be running by now) due supposedly to failure to work out certain details, I wonder if they are coming to realize that leverage will still not induce investors to enter into asset purchases with a negative expected net present value.

From the Washington Post:

While Geithner has taken dramatic steps to address flashpoints in the economy, the work of carrying out those policies has bogged down because critical decisions about how to do so aren't being made.....

Government officials, inside the Treasury and out, say the unresolved issues are piling up in part because of vacancies in the department's top ranks. But some of the officials also cite the Treasury's ad-hoc management, which is dominated by a small band of Geithner's counselors who coordinate rescue initiatives but lack formal authority to make decisions. Heavy involvement by the White House in Treasury affairs has further muddied the picture of who is responsible for key issues, the officials add.

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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.

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In March, Treasury officials clashed over a $15 billion initiative to use money from the federal bailout package to free up credit for small businesses. Geithner's counselors pressed to announce the program quickly, despite protests from the career staff members who said it would not work. Unable to raise the issue with Geithner himself, the staff members appealed directly to the White House but were rebuffed, according to sources familiar with the episode.

Yves here. Did you catch that? The staff tried going over Geithner's head! This says they have VERY little respect for him.

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More at link...