Geithner Nets 500 Points
With all due respect, the Dow average didn’t surge 500 points on the unconfirmed story late yesterday that Hillary Clinton had “accepted” the office of Secretary of State. That remarkable stock-market run belongs to New York Federal Reserve President Tim Geithner, who is reported to become Treasury Secretary. The Obama camp hadn’t confirmed this as we went to press, but assuming it is true, we wish Mr. Geithner luck, though he probably shouldn’t count on too many more 500-point performances in the long season ahead.
We take the market’s reaction as a strong sign of the price that was being paid in uncertainty over this choice and the direction of the incoming Administration’s economic policy. There could hardly be a clearer signal that addressing the immediate panic in the credit markets and its impact on the real economy is priority No. 1 for the new President and that all involved want to get the Obama show on the road.
We will have more to say later on the presumptive Treasury Secretary’s economic worldview. Suffice to say that Mr. Geithner has been in the cockpit for better or worse as financial authorities wrestled with the deteriorating economic conditions the past 18 months. There is no need for the appointee to relearn the arcane details of the rescue so far.
Amid the brief market euphoria, it is hard not to notice the leaks and air of disorganization coming from the Obama transition team on these important appointment decisions. The new President may come to appreciate George W. Bush’s experience with lower-tier political players who put their own compulsions above his desire to govern.