Reuters columnist James Pethokoukis is of the opinion Treasury Secretary Geithner has bled enough that this year could well be his last. Questions about Geithner’s competence and his involvement in the AIG (AIG) bailout have been raised with greater frequency lately. Those questions were echoed by MSNBC’s host Ed Schultz, who wondered aloud this week whether the AIG scandal would be the end of Geithner. Pethokoukis believes however, Geithner is probably safe until November.
Reuters: “To insist on his departure now would eviscerate that message and probably unnerve markets. It would also set back Obama’s legislative agenda — and the search for a replacement would provide a forum for Republican attacks in the run-up to November’s midterm elections.
The Democrats are also fully in control for now, making it easy for Obama to quash calls for Geithner’s ouster. Besides, the list of candidates with ready-made reputations who might step into the breach is short. The nation’s populist mood seemingly rules out a Wall Streeter, not that JPMorgan’s Jamie Dimon currently desires the job. Whispered West Coast financial names like bond giant Pimco’s Bill Gross and Mohamed El-Erian seem a stretch. And the White House has scant interest in two easily confirmable choices, ex-Federal Reserve chairman Paul Volcker and bank regulator Sheila Bair.
So the “Geithner must go” crowd will need patience. That said, Geithner has a shallow reservoir of goodwill on Capitol Hill. Congress looks likely to investigate what he knew about AIG and when he knew it, and some highly damaging revelation could change the game. Otherwise, the Treasury secretary is probably safe until after Election Day. But if Democrats lose big then, booting Geithner will be an obvious way for Obama to show he’s rebooting his agenda.”