No one much remembers William Woodin, the Republican businessman and campaign donor Franklin Roosevelt named Treasury secretary amid the bank failures and soaring joblessness of 1932. Already in poor health when FDR was sworn in, Woodin resigned after less than a year in office, promptly died and left little mark on the New Deal.
Today, another man will be tapped to help a new Democratic president navigate a swift-moving financial inundation. And this time, Timothy Geithner, 47, the razor-sharp president of the Federal Reserve Bank of New York whom President-elect Barack Obama is expected to name as his Treasury secretary, seems certain to leave a lasting imprint on the nation's crisis response.
"He's a great choice. He has tremendous knowledge and experience. He's very capable and understands the financial situation extremely well. … We're going to see much bolder and more comprehensive action," says Harvard University's Kenneth Rogoff, who worked with Geithner at the International Monetary Fund in 2001 to 2003.
In Geithner, Obama has chosen a Clinton administration veteran of financial crises who has been deeply involved alongside Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke in the government's response to the current financial turmoil. The even-tempered, youthful-looking official has spent the past five years helming the New York Fed, enjoying daily contact with Wall Street titans. He'll need every contact and insight accumulated: The U.S. and global economies are deteriorating more rapidly than was true even a few weeks ago.
Friday, Goldman Sachs lowered its fourth-quarter forecast, saying it now expects the economy to shrink at an annual rate of 5%. Unemployment is rising, production is plunging and economic weakness has gone global.
The gathering gloom explains Obama's sudden announcement Saturday of a massive new economic stimulus designed to save or create 2.5 million jobs over two years.
The president-elect offered few specifics, but senior Democrats indicated Sunday that the proposal would match the scale of the economy's ballooning ills. Appearing on ABC's This Week, Sen. Charles Schumer, D-N.Y., put the price tag at $500 billion to $700 billion, or 3.5% to 5% of gross domestic product.
"I don't know what the number's going to be, but it's going to be a big number," Austan Goolsbee, another Obama economic adviser, said on Face The Nation on CBS. "It has to be."
Geithner, who began his Washington career working for Henry Kissinger and numbers Alan Greenspan among his tennis partners, will be part of an Obama economic team that seems solidly anchored in mainstream Democratic thinking.
Other key officials include former Treasury secretary Larry Summers, 53, expected to head the White House National Economic Council; Jason Furman, 38, in another White House economics slot; and Peter Orszag, as director of the Office of Management and Budget. All are tied to the Wall Street-friendly economic policies personified by Robert Rubin, Treasury secretary under President Clinton and now a director at Citigroup.
Geithner "is really a centrist. … He understands markets very well," says Rogoff, a Harvard economics professor who advised Sen. John McCain, R-Ariz., during the recent presidential campaign.
Though unassuming, Geithner is sufficiently forceful to stand up to Summers, a brilliant economist whose people skills are sometimes found wanting.