– Tim Geithner: Next Steps (ZeroHedge, Nov 5, 2012):
Tim Geithner’s public “servant” tenure has not been without its blemishes: from his deplorable run as the (figure)head of the New York Fed (from 2003 until 2009), when the entire financial system literally imploded under his watch, to his epic failing up as Hank Paulson’s replacement as treasury Secretary of the United States, despite his legendary inability to navigate the Minotaurian labyrinth that is the TurboTax income tax flowchart, the Dartmouth alum has had his share of run ins with adversity (and adversity won). Of course, Geithner’s tenure in charge of the Treasury in the past 4 years has been somewhat mollified by the fact that here too here was merely a figurehead, and the true entity that runs the US printing presses is none other than the JPM and Goldman Sachs co-chaired Treasury Borrowing Advisory Committee (for more on the TBAC read here and especially here as pertains to the former LTCM trader and current head of JPM’s CIO group), meaning that the US Treasury, just like the Fed, are merely branches of the one true power in US governance: Wall Street. Geithnerian figureheadedness aside, the one undeniable fact is that Tim Geithner’s days as head of the Treasury are now numbered: he has made it quite clear that he will not accompany Obama (should the incumbent be reelected) into his second term. So what is a career “public servant” to do once the public no longer has any interest in retaining his services? Bloomberg’s Deborah Solomon has some suggestions…First, it may come as a surprise to some, that just like virtually every other central planner currently in charge of deciding the fate of billions of people in US and around the world, Geithner has never really had much interaction with real life:
Despite the fact that much of the public — not to mention some lawmakers on Capitol Hill — assume Geithner worked on Wall Street, he never has. Instead, he has spent most of his career in public service. Before taking the Treasury post in 2009, Geithner headed the Federal Reserve Bank of New York for six years and worked at the International Monetary Fund. His main private-sector job was at Kissinger Associates Inc.
The years in public service — particularly engaging in diplomacy with domestic and foreign partners — left a deep impression on Geithner, infusing him with a sense of purpose that he might find lacking on Wall Street (see: “Why I Left Goldman Sachs” by Greg Smith).
The logical implication is that while Geithner’s actions were enriching a broad universe of people (read those working on Wall Street, metaphorically of course, as the bulk of financial activity has long taken place in midtown Manhattan), Tim was stuck with a salary which would make a 1st year associate blush (see TurboTax incident above). To wit:
[T]he years in civil servitude have also left Geithner in need of a better salary. Geithner is one of the least wealthy men to head the Treasury Department in recent years. He took more than a 50 percent pay cut to assume the job. His $199,700 salary is higher than the $174,000 earned by most members of Congress. His pay has been increased by $8,400 in three years, yet his net worth pales next to such predecessors as Hank Paulson and Bob Rubin.
With two mortgages and two college-age children, the lure of private-sector money could be hard to resist. BlackRock’s Fink, for instance, received $23.8 million in salary and stock in 2011, making him No. 1 in the Finance 50, Bloomberg Markets’ annual ranking of the best-paid CEOs at the largest U.S. financial companies.
So what is a (quite literally poor) Tim Geithner to do? Will he go back to Wall Street…
The big money is on Geithner heading to the private sector, with private-equity shop BlackRock Inc. (BLK) often mentioned as a potential landing post. The chatter has been fueled by Geithner’s frequent conversations with BlackRock Chairman Laurence Fink: The two spoke 49 times over the past 18 months, according to Geithner’s calendar. (Fink, it’s worth noting, is also mentioned as a potential successor to Geithner if Obama wins a second term.)
Less likely, say those who know Geithner, is that he’ll end up at a big bank like JPMorgan Chase & Co. or Goldman Sachs Group Inc. This is in part because it would make for “bad optics” (the Obama administration spent the better part of four years chastising Wall Street for its practices while Geithner has been criticized for being too soft on bailed-out banks) and in part because it’s not Geithner’s style.
Or perhaps go back to academia, where he will spin stories about Magic Money Trees (MMT), and who $22 trillion in US public debt by 2016 is a mere trifle:
Another option for Geithner — one his own father-in-law recently blabbed about in a New York restaurant — is to head back to his alma mater, Dartmouth College, to run the university. The departure of Jim Yong Kim to head the World Bank leaves an opening for Geithner (class of 1983), whose father, grandfather and wife are all Dartmouth grads. Kim’s compensation at Dartmouth was $612,768, including a base salary of $419,754, as of year-end 2010, according to Bloomberg News. That’s not a BlackRock-sized paycheck, but it’s a raise. Still, it’s unlikely he’d move to New Hampshire before his son leaves for college.
For now nothing has been decided:
Those who know Geithner say he’s unlikely to rush into anything and will probably take some time — maybe six months — before taking a new job. Meantime, he could earn money by giving speeches and writing a book (he has publicly ruled out the book, but he could reconsider).
There is, also, a scenario that Geithner will continue “serving the public” for an indefinite period of time even after the election:
Still, in news he no doubt already knows, Geithner may not be going anywhere for a little while. Assuming Obama wins a second term, the administration is expected to nominate someone quickly to head Treasury, but confirmation depends on the Senate. With the debt ceiling and fiscal cliff fast approaching, Geithner may have to stick around and aid that process until the Treasury nominee gets the Senate’s (sometimes slow) blessing.
Of course, as everyone knows but is terrified to admit, at this point the US, and global, financial system, are both beyond salvaging, with can kicking the only (non) option left. Therefore, the only hope is to let the status quo do what it does at an ever faster pace (transfer an ever greater amount of wealth from the middle classes to the kleptofascist oligarchy until, quite soon, there is nothing left), in the process finally destroying everything, and most importantly, itself, once the second coming of the Bastille day is official. That this is the only real chance for a fresh start left should be clear to everyone. Which logically means, that the best option for all may well be to just leave Tim Geithner “in charge.”
After all what better way to hit peak systemic self-cannibalization and reach complete, wholesale destruction of everything and anything?
If anyone has a more responsible idea, we are all ears…
