For those of you who know the Myers-Briggs personality diagnostic, it defines 16 types by establishing four attributes, of which an individual can be either A or B. Some are pretty obvious: extroverted versus introverted, thinking versus feeling. One is called “sensing versus intuitive.” Sensing people are literal-minded, while intuitives are imaginative.
The last type is judging versus perceiving. Judging types like making decisions; while perceiving types feel a sense of regret and want to keep options open and collect more information.
When Geithner delivered his first version of a financial services industry plan, which was notable for NOT being a plan and lead to a negative stock market reaction, I suspected Geithner was a perceiving type (and that type is tot a natural fit with an executive role). This WaPo article provides some evidence to corroborate that theory. Perhaps as important, the fact that this story even ran suggests staff are grumbling loudly enough for the WaPo to get wind of it.
The 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 (hat tip reader Larry):
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.
One of the department’s signature initiatives, considered vital for getting at the root of the financial crisis, aims at relieving banks of their toxic assets. But to those familiar with the program, it remains unclear who will decide some of the practical details, such as whether foreign firms will be allowed to participate in the funds that buy the assets. This uncertainty is slowing the rollout of the program, which in any case has proven daunting to design. Announced in early February, it may not launch until July, officials say….
Aside from getting officials into place, Geithner still needs to define the roles of his senior counselors and delegate some decisions to lower-ranking officials, several government officials said.
“Tim’s nature is to be very inclusive,” said an official who frequently interacts with the Treasury. “But there are too many decisions to make with 20 guys around his table.”
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.
Geithner said he welcomes the input from senior White House officials because they provide intelligent feedback and because he has been short-staffed. After studying the last dozen Treasury secretaries, Geithner said he became convinced that the Treasury needed to closely collaborate with the White House.
But the time spent meeting with White House colleagues on high-priority issues — from the federal budget and tax policy to health-care reform and a proposed overhaul of financial regulation — has left him little chance to manage his staff.
“People think he’s very, very smart, but he has not exerted a management presence yet,” added a source familiar with the Treasury’s inner workings. “He’s being stretched in a thousand directions . . . but I don’t know if that absolves him of responsibility for management.”…
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. Back to the article:
President Obama announced the program two months ago, and it is still struggling to get off the ground. Officials are looking to overhaul the proposal…
Geithner said in interviews that some of the department’s internal difficulties result from the intense pressure on officials to develop a raft of rescue initiatives in a very short time.
“We were just putting enormous pressure on these people to put in place and execute this comprehensive set of programs,” Geithner said. “In a crisis, the most important thing is to show the capacity for credible initiative that is actually going to fix the problem. That’s why we are trying to do so much so early.” He added, “It could get tough at times . . . but I think they are doing a great job in that context, and they are working 24 hours a day to put out A-plus policy.”
Still, some lawmakers and government officials said Geithner needs to be a stronger manager.
“No one knows how to get decisions made,” said a senior government official familiar with the Treasury’s inner workings. “Major decisions can happen very fast at the top, and then after that there are tons of detail and nuances that have to get worked out without clear chains of command. Either the seats are unfilled . . . or you have to answer to a half a dozen counselors running around.”
Notice the desire to have an A-plus policy? This is another sign of someone who has never been a manager (at least in a structure where he had significant discretion; I suspect that the number of major decisions that Geither had to make as head of the NY Fed, acting exclusively, as opposed to the execution/trading arm of the Federal Reserve System, were comparatively few). The perfect is the enemy of the good. You need to be 80/20 (as in which 20% of of the task has 80% of the value), figure out what elements of policy are vital to flesh out carefully, and do a more cursory job on the rest, with the idea you’ll tweak should it prove necessary.
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The “A-plus policy” is to let the FDIC do its job.
Another option is to find a hard nosed underling who is willing to do all the dirty work while you do all your emoting.
Blogger Addendum:
Washington’s Turnaround Artists
Think government can’t fix the auto industry? Then how did it manage to fix the railroad industry—twice?
http://www.washingtonmonthly.com/features/2009/0903.longman.html
Simply throwing vast sums of money at Detroit, then, is unlikely to save the American auto industry, no matter how many strings are attached to that money. Better for the federal government to take direct, if temporary, control of U.S. automakers, as it did with the railroads.
> Obviously the same case can be made for this entire mess that Geithner is toying with, as in nationalizing the banking system and taking control of the industry-wide fraud on wall street!
Its been delayed so they can have a little bit of room between the scandals which will emanate from it and the end of the stress tests. People might wonder why we need the PPIP if all the banks are doing a-ok and some of them just today applied to give us all our money back (ha ha).
This is a good news bad news situation. The bad news is that the economy continues to tank as Geithner fiddles. The good news is that his decisions have been so uniformly awful that delay in their implementation is actually a plus.
I would disagree about Paulson. Yes, he had his little clique of Goldman clones running around, but the initial announcement of the TARP was as brainless and empty as Geithner’s performance. The purpose of the TARP changed course almost immediately on the basis of a footnote. Even then it was slow to distribute money, and did so in extemely wasteful and sloppy ways.
Of course, Geithner is not a leader or a manager. His record is one of failure: in the Asian banking crisis, in deregulation, in not seeing or reacting to the housing bubble, in not seeing or reacting to the meltdown, and in his current confused, backward looking policies. He has always been someone’s protégé. He has always failed upwards.
Why anyone would expect him to exhibit good policies and organizational skills now beats me.
Blogger Addendum ll:
“You may remember the story of how the devil and a friend of his were walking down the street, when they saw ahead of them a man stoop down and pick up something from the ground, look at it, and put it away in his pocket. The friend said to the devil, ‘What did that man pick up?’ ‘He picked up a piece of the truth,’ said the devil. ‘That is a very bad business for you, then,’ said his friend. ‘Oh, not at all,’ the devil replied, ‘I am going to help him organize it.’
http://en.wikipedia.org/wiki/Jiddu_Krishnamurti
Doc
Why are the railoads expected to make money, but the DOT is not?
They both provide the same service, a place to put a vehicle that moves things.
That the DOT also requires that you go out and buy a big piece of steel, and then feed that steel gasoline and parts makes the argument completely crazy.
Good thing we have all of those tolls and gas taxes.
Red herring
This is basically about management style. But our problems go much deeper than that–the U.S. has very little local micro manufacturing from which it can create value (and real wealth). Geithner is still basically a banker–thinks in terms of debt and money, a finance guy. We need a manufacturing Czar to focus us on a long-term industrial policy. That’s where his vision and leadership are lacking. It’s more than style I’m afraid.
Why do they even need this PPIP anymore? The announcement of the program alone served the purpose of the program.
The announcements made those assets worth something.
We kept hearing how Geithner was too busy to staff these positions, or that they couldn’t find anyone who didn’t have potential tax problems. (How pathetic and symbolic is that? That’s what Obama gets for having lied about wanting to bring in Change.)
Now it looks like Treasury was never meant to wield the real power, so the staffing woes looks less like a bug than a Bush-style feature.
That would also help explain why a mediocrity like Geithner was appointed in the first place. (This piece contains another example of an assertion about how “intelligent” or even “brilliant” Geithner is. But it’s axiomatic that the more you see declarative hype like this, the less true it’s likely to be. No one ever felt the need to declare that Einstein was smart, because it was evident from his actions.)
Attempter:
Your point about Geithner and Einstein is well taken. Having seen Geithner on television, I have not been favorably impressed by his intellect.
Geithner is the Governor for the USA on the Board of Governors of the IMF for 2009. I don’t think he answers to Obama, and he doesn’t have to worry about the White House. Geithner may seem incompetent or flustered, but he is sharp and following the policies of the monied interests that put him in the positions of power he has attained. Personality types? Bankers have personalities?
Great post.
I will raise an objection to the Myer-Briggs characterization: I don’t think Geithner has revealed where he sits on the J vs P scale, so much as where he sits on the (non-Myer-Briggs) competent vs incompetent leadership scale.
Isn’t the FED now more than ipso facto independent of the US government?
If so, isn’t it important to restart the conversation on the that basis that the FED is independent of Congress. Congress only pretends it isn’t true with hearings the tone of which only reinforces their powerlessness.
Geithner obfuscates and demonstrates his brazenness with all kinds of antics including running out the clock on Senators (when are they going to change the rules on this clock thing), actually insulting Congress and the American people in front of the TV cameras while Bernanke just says ‘NO.’
I felt as personally insulted with Geithner’s gongressional appearance performance as I did by Bush’s treatment of reporters in front of the Washington press corp -both of them arrogant beyond belief. ‘Hey, this is a dictatorship. When are you gonna’ give up?’
Restarting the conversation on the basis that the FED is now independent, insiders may be willing to leak information knowing the information has a chance to lead the country in a different direction.
In other words, we need a demonstrable change of consciousness regarding this mess Naomi Klein having lead the way with a lot of clues as to strategy.
As long as the propaganda machine is allowed to go unchecked we get the leaders we deserve.
Now the propaganda machine on an unimaginable scale is keeping the stock market going to mollify investors. Just as it was hoping to reelect repubs, the FED hopes to keep investors happy and erase ‘entitlements’ with inflation.
I’m afraid the right wing is in charge here under Obama. What could be more right wing than private corporations owning taxpayer receipts and disbursing them at will while defanging the government.
I am also reminded of Paulson’s performance on bended knee before Pelosi so consonant with the performance of a mute Bush in front of school children while the cameras roll to show for all time that Bush had no communication with anyone with authority during or after the 9/11 incident.
Its corny but it works.
What got my attention in the article:
“Wagoner’s removal has been held up because senior Treasury officials have yet to decide whether he should get the $20 million severance package that the company had promised him.”
Where are the details of this ‘promise’ –no longer a contract? promises will do? Follow the money.
The disincentives in this kleptocracy to do a good job and show a profit or do any work at all are astounding.
The congress should get a choke chain and put it around Ben Bernake neck before he looses our AAA rating and drives the dollar into the ground.
Not to mention spending money that has not been approved by the taxpayers through their legal representatives, the congressmen and senators which we elected to represent us.
It is clear that helicopter Ben Bernake is planning on paying back the taxpayer money which he stole at a discount by running the inflation up to the sky. The will do a double kill to the middle class which lost due to the financial chaos that the Federal Reserve caused by its poor money management policies. Then he wants double or triple the inflation rate. So he can pay the money back at huge discount which makes everyone retirement only worth half or one third due to the inflation rates which we will be seeing in the next few years.
This is a sad day for Americans, we need to take our country back. It is time for a Boston Tea Party II in 2009.
Please let all banks pay back the TARP money with the stipulation that forever and evermore they will not be given and taxpayers money or use of taxpayers to back there debt.
>> For those of you who know the Myser-Briggs personality diagnostic <<
It's actually called "Myers-Briggs" — a nice little psychological instrument.
Vinny GOLDberg
VG,
*Sigh* Thanks. Yet another typo.