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.