When rumors surfaced that President-elect Obama would nominate Tim Geithner as Treasury Secretary in late November, the stock market rallied 5% in a few hours. Since then, Geithner's role in formulating economic policy has been overshadowed by Larry Summers, and many have viewed the Treasury nominee as executor of policy and little more.
But
even if Geithner is confirmed, new reports about his tax returns-which
amazingly have yet to derail his nomination-make him an easy fall-guy
when the Obama team inevitably hits some bottlenecks. Add to that
Geithner's close association with the policies of current Treasury
secretary Hank Paulson, and he has little political capital on either
side of the aisle. Forbes CEO Steve Forbes said that Paulson has done
more damage to the economy than "a terrorist attack." That analogy may
be histrionic, but many regard TARP and Paulson as disasters.
As for Schapiro, her appointment was initially welcomed as
providing continuity, much like Geithner's. But as more information
about the regulatory failures and scandals of the current decade
unfold, Schapiro looks more like a major part of the problem than a
solution.
During her tenure at FINRA, it now is being revealed that
Schapiro managed to miss a smorgasbord of brewing fraud, from the
subprime arena to Bernard Madoff's $50 billion Ponzi scheme/fraud. And
she hardly ever pursued a case against the biggest Wall Street firms
that paid the bulk of her seven-figure FINRA salary.
Remember that while outgoing President Bush enjoyed widespread
popularity during his first 18 months, but by mid-2002 politicians of
all stripes were calling for the head of SEC Chairman Harvey Pitt, as
accounting, mutual fund and Wall Street research scandal exploded.