The question of who is running the White House economic policy shop has been answered: It sure isn't Tim Geithner, the Treasury secretary.
Citing anonymous sources, Reuters is reporting that Geithner has "reservations" about President Obama's "Wall Street crackdown."
Geithner is concerned that the proposed limits on big banks' trading and size could impact U.S. firms' global competitiveness, the sources said, speaking anonymously because Geithner has not spoken publicly about his reservations.
He also has concerns that the limits do not necessarily get at the heart of the problems and excesses that fueled the recent financial meltdown, the sources said.
What can we tell from this pusillanimous attempt to undermine Obama's biggest regulatory initiative within hours of its unveiling? Simple: There was a big fight over the direction of regulatory reform policy at the White House, and Geithner lost. A good soldier would shut up and do his best to get in line -- certainly, as Geithner's superior, Obama has been unstinting in his defense of the Treasury secretary, and at no small cost to his own standing with progressives. But instead, we get sour grapes comments about "global competitiveness" -- standard conservative boilerplate when free-market ideologues argue against any kind of regulation that might put a crimp on private enterprise.
At great cost to my own credibility with Salon readers, I've defended Tim Geithner for a lot longer than I should have. I thought he did a reasonably good job stabilizing the financial sector at a time when panic reigned supreme. I thought he had as a good a handle as anyone on the danger that unregulated derivatives trading posed to the overall financial system -- dating all the way back to the first post of mine that mentioned his name, way back in 2006. But at this point, he's worn out his welcome.
One should still be cautious. Maybe these leaks are the work of people within the administration who are looking to embarrass Geithner. Or maybe, although I'll admit this is unlikely, he's pulling some kind of jujitsu move to give Obama cover with the left (See, if Geithner doesn't like it, it must be good policy). But I don't think so. If the Reuters story is true, Geithner has made it clear where his allegiances lie -- with Wall Street. It's time for him to go. Paul Volcker looked pretty full of energy Thursday morning, and he did a pretty good job as Federal Reserve chairman way back when. Maybe we should get a chance to see how he does as Treasury secretary.