March 23rd, 2009
02:31 PM ET

Geithner faces a tough crowd

[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/images/03/23/art.getty.geithner.frustrat.jpg]

Jessica Yellin
CNN National Political Correspondent

Slouching alone at the head table before a room of business reporters today, Treasury Secretary Tim Geithner looked like an overgrown prep school student facing the expulsion board. It wasn't what he said, but his demeanor as he said it. Cautious, gazing out from deep-set eyes - he seemed to shrink from the room. And the room was skeptical.

Geither unveiled the new "Public-Private Investment Program," in which taxpayer funds will be used to seed partnerships with private investors that will buy up toxic assets backed by mortgages and other loans.

When the secretary calmly said that taxpayers would get a fair shake in the deal because the funds in question "are managed by professionals who know how to do this for a living," one reporter could be heard sighing, "oh, great."

The wariness was mutual. Asked whether he thought this economic plan would play well outside Washington, Geithner offered a wry smile. "I'm confident that you and your colleagues will do a good job of getting the word out," he replied.

Geithner's presentation lasted just over 35 minutes, the bulk of that time answering reporters' questions - though no cameras or microphones were allowed. Most questions were along the lines of, "why do you think this will work?"

He sat at a wooden desk with an unopened bottle of Dasani water and an untouched glass, an American flag behind him, and a thin microphone in front. For anyone who has considered getting Botox, Geithner would be an object of intense jealousy: his forehead almost never moves. His look was solitary and small. Slumped in a chair, lost in a suit with pants that seemed to swallow him, he used his large hands: sweeping out wide as he explained that his confidence in the plan, then folding into a steeple as he was asked for more specifics.

To a first-time observer, there are similarities between Geithner and President Obama. Like the president, he is exceedingly lean and lanky; the look, disciplined. Like the President, his calm and caution gave him an air of seeming detachment from his subject and the people questioning him. He doesn't react, he reflects. He takes time with his explanations; his attitude toward his audience: patience. But lacking the President's ease and amused charm, the steadiness doesn't seem Zen. It gives him the air of an exceedingly professional scientist: if this experiment doesn't work out, it will provide fascinating insight for the next experiment. Too bad for the lab rats? Folks who know Geithner say that's a wildly a unfair assessment: that he's a deeply empathetic man who cares about the little guy. It's not his fault that his demeanor doesn't reflect that.

The business reporters in the room grilled him endlessly about loan rates and investment enticements and how this plan would be structured. It wasn't until the very end that he was questioned about how this will play “outside Washington” and whether this is skewed against the taxpayers. To both he betrayed no emotion. "It's very important we make sure taxpayer money is not used to reward people who should not be rewarded," he said, sounding for the first time like a talking points politician. At one point he did acknowledge there is “deep anger and outrage" in the nation. But, he explained, "we need to balance that against the objective" - which is to get investors to buy the things that are killing banks' balance sheets–and freezing up business loans and the economy. "I'm confident we can get that balance right," he smiled.

The most revealing insight came when the Treasury Secretary explained, “The challenge is that after a period of too much risk, right now there isn’t enough risk taking,” he explained, “We now need to encourage investors to take risks.” In other words, we want to unleash a little of the gambling instinct that got us here in the first place. Put another way - Wall Street is holding the rest of the economy hostage. It’s all because of these toxic assets. He wants hedge funds and private equity firms to buy those assets and free the economy. Not the same crazy risk-takers who tanked our economy by gambling too big and losing. Geithner has faith in the last standing Wall Street institutions. He says the problem is they’re feeling skittish; the hedge funds etc were burned by their bad bets, and now they’re terrified of parting with their money. Since they won't buy the toxic assets without big protections he wants to give it to them. His idea: let the government coax them into investing in these toxic assets by minimizing the chance that they'll lose big, and maximizing the chance they'll profit it all goes right. They're trying to get Wall Street's gamblers only a little bit drunk so they'll dive into the market again.

But what if it all runs amok? Will they get ridiculously rich off the taxpayers or will the taxpayers lose big. Uh, time will tell?

And it was over. He thanked the room. And then a press secretary stepped forward – a man I'm told came with Geithner from the New York Federal Reserve. He looked out at the room of reporters with their wireless enabled laptops and blackberries and announced "We're going to impose an embargo," he said - that's press lingo for "you're not allowed to share this info publicly till we say so." Only he announced the embargo more than an hour too late. Even before the Secretary walked into the room, reporters had been sending their newsrooms snippets of his comments and details of the plan. The information was already out. Can they really be this unclear about how the Washington press works? Not a good sign.

On the way out of Treasury - where the ceilings appear to be painted gold - a huddle of reporters stood in front of a "staff" board featuring pictures of officers at the department: seven in all, including several holdovers from the Bush administration. At least Geithner isn't entirely alone.

Filed under: Economy • Finance • Jessica Yellin • Treasury Secretary
soundoff (12 Responses)
  1. Neo

    Embargo? For what? Wasn't Geithner about to be fired last week? The turnaround is if anything interesting?

    March 23, 2009 at 9:12 pm |
  2. Carin

    Can we have substance please? The plan sounds solid to me, an ex-Ambac employee and let's face it. They have to do everything simultaneously.

    You don't think Lilly Ledbetter was urgent? You don't think the government had bandied about early copies of the bill? You don't think they just let the bonuses go because it's tiny compared to the rest? How about more reasoned work, and I think for the most part you are a good reporter...

    March 23, 2009 at 8:29 pm |
  3. Kim

    My financial guy doesn't have to be personable, just good with numbers. Get over his personality (or lack thereof) and move on to the plan.

    March 23, 2009 at 8:07 pm |
  4. Terry, TX

    He needs to step down.....No more money to anyone....no more...no more...No Mas. I repeat if Obama can't stop his spending he can step down right with him. His pet projects need to be on hold until this country is healthy...I believe it will fix itself.

    March 23, 2009 at 6:09 pm |
  5. Milton Smith

    A crowd of angery poor hungry wolves and teenage hitmen

    March 23, 2009 at 5:50 pm |
  6. Annie Kate

    Geithner was probably wondering if anyone had brought tar and feathers to the press conference after last week's blow-up on the AIG bonuses. I have to admit that after being told for weeks that we all share in the bad economy because of our profligate spending and use of credit and that we need to save for a rainy day that now being told to take some risks and buy something leaves me confused. I don't have enough money to do both. I barely have enough money to even do one of them. And knowing that if I get in too deep there is no one to bail me out, I am more than hesitant to move my money and spend it. So for the average Joe or Jill, what do we do – save or spend?

    March 23, 2009 at 5:46 pm |
  7. Mari

    No one will make it easy for Obama's Team, not until we begin to see progress and the nay-sayers will have to shut up!

    March 23, 2009 at 4:58 pm |
  8. Dave

    Bernanke & Geithner: Skilled Pilots

    It’s clear that secretary’s Bernanke and Geithner have both the style and substance required to fly us out of this mess. They have two sets of hands on the controls and have aggressively throttled up while they cautiously fly the stick shaker (stall warning indicator) to gain altitude. Concurrently, the passengers, mostly politicians and pundits that don’t have the skills to fly a kite, are behaving badly in the back of plane. What these hooligans should do is sit down…shut up…and please fasten your seat belts snugly across your laps.

    Parenthetically, the hooligans should also give 100% of the $165 million AIG bonus dollars to Bernanke and Geithner (100% tax free) after they successfully fly us out of this mess…Assuming, of course, that we are serious about value-based compensation.

    If you think things aren’t complex enough, Bernanke and Geithner are also flying in international airspace, receiving less than helpful input from foreign sources, and have no instruments on the flight panel that can be used to comfortably fly out of the clouds. I sure hope their piloting instincts are sharp and that they are still comfortable using a manual flight computer and a stop watch!

    Personal note to the pilots:

    Do a good job...Please.

    March 23, 2009 at 4:16 pm |
  9. earle,florida

    Treasury Secretary Geithner, FDIC Chairwoman Sheila Bair,and Federal Reserve Chairman Bernanke were all thrown litteraly into a vipers pit by the Bush Administration in Mid/2006,and became aware of the financial debacle in early 2007,period! Mr. Geithner lives the life of every-man in his daily memoirs, when he dictates/writes one's-self solution,and contradicting himself when he writes another. His recollections are quick to humble an inteigent,thoughtful man,when he compares his memoirs with what he once vowed to follow through,as incomplete,but whole? If Mr. Geithner hadn't tasted adversity,and the changing whims of fickle men ,his prosperity would not be so forthright,and welcomed! The great leaders are very humble men,that act admirably in the darkest hours,whereas the small players act more like prostitutes. Mr. Geithner has exposed his mettle today,and my hats off to him! Bravo Treasury Secretary Geithner!

    March 23, 2009 at 4:11 pm |
  10. Linda Strasberg


    March 23, 2009 at 3:54 pm |
  11. Henry

    If you cant afford it don't use no damn credit cards
    Credit is used for an emergency or to make more money like a business not buy dumb things you don't need now the government is buying all our bad debt from the banks using our money to free up the credit markets so we can get some more bad debt, this is something else....save your money. Not going to work debt will not create wealth for
    most Americans.

    March 23, 2009 at 3:04 pm |
  12. Arachnae

    I suppose it's progress of a sort when men's attire is scrutinized as trivially as women are...?

    March 23, 2009 at 2:54 pm |