The Treasury Secretary in the Super-Speed News Cycle

It occurs to me to observe that I think a lot of the recent criticisms of the Obama administration have been based on a confusion of chronological sequence with priority. People observe that it’s unlikely that we’ll see recovery in the real world until we tackle the problem of undercapitalized large banks. Therefore, they want this to be the administration’s top priority. And then they wonder why we’re hearing all this stuff about education reform and stimulus and health care and cap & trade when Obama should be fixing the banks! But I think this misunderstands the significance of sequence. The “stress test” process that Tim Geithner’s outlined necessarily takes time to complete. Meanwhile, it doesn’t involve any congressional hearings. Meanwhile, progressive policy wonks, many of whom are now in the administration, have been working on these other issues for years. Many of them—cap & trade, the Make Work Pay credit, the education reform, health care expansion—were at the heart of a long and hard-fought presidential campaign. And so at this point those issues really don’t require much more work from the executive branch. But they do require lots of congressional hearings, CBO analysis, committee markups, etc. Under the circumstances, it’s not much of a “distraction” from anything to write the speeches, stage the public events, and officially get the congressional ball rolling on the rest of the agenda.

Then on the actual bank process. Is Treasury really being too slow? I don’t think so. I don’t think that we’re going to live in a world where in 2069 people are looking back at The Panic of 2008 and saying that the problem was that Barack Obama took office on January 20, but Treasury Secretary Timothy Geithner didn’t fully unveil his bank rescue program until April 11. If the program works, people will say that the administration worked with extraordinary speed did X, Y, Z, A, B, C, and unveiled a bank rescue program—all within its First 100 Days in office.

What people might say, looking back from the future, is that Treasury’s response was ineffective. That could happen. That would be bad. But that’s an argument for going (relatively) slowly and methodically, doing the stress tests in a convincing way, and making careful decisions.

A lot of Tim Geithner’s problem, it seems to me, is that the current pace of news and the conversation makes any period of anxiety and uncertainty feel intolerable to those of us who are participating in it. I already feel as if I’ve been writing about the aftermath of the Lehman/TARP fiasco since the dawn of team. In fact, it’s all pretty new. But it’s agonozing. We now have a whole bunch of 24-hour cable news channels, plus the verdant universe of blogs. But one of the key values of that media ecology is that you don’t need to worry too much about making mistakes or changing your mind. Instead of being methodical, you try to be honest and open-minded. You correct yourself when you realize you’ve made a mistake, you change your mind when new information comes to light or just when you think better of things in a calmer moment. It’s great. I, for one, love blogging. But the Treasury Secretary can’t act like that. Or, rather, I think Hank Paulson sort of did try to act like that in his final months in office and it was disastrous.

Saying we’ll just need to wait and see sounds lame, but at the end of the day I think it’s the right answer. We do need to wait and see. And meanwhile it’s appropriate for people to be talking and thinking and legislating on other matters of national importance.