Geithner Appointment Hits a Snag

January 15, 2009

Tim Geithner’s appointment as Treasury Secretary is jeopardized by his failure to pay self-employment taxes on time in the past. A comment posted today to my initial assessment of the Geithner choice by a reader showing knowledge on such tax matters makes a compelling case for rejecting President-Elect Obama’s first choice because it does not meet the appropriate “high moral and ethical standards” that we ought to demand of our public servants.

In my post from November 24th, I reviewed Geithner’s excellent credentials for the position with prior experience at Treasury, the New York Federal Reserve Bank, and the IMF and having been mentored by several true experts in their fields. In Geithner, Obama chose a person with intimate familiarity with the the global financial crisis and the thinking behind all that has been done thus far to counter-act the damage.  The last point is double-edged, I noted. As a key player in several controversial decisions, Geithner may not represent a sufficient break with previous controversial decisions by our leaders. I noted other factors too that perhaps made the Geithner appointment not so perfect but had no knowledge that personal tax issues would surface.

Whatever the merits of disqualification based on tax noncompliance, it’s unfortunate that judgment might come down to this essentially distracting matter. If Geithner is the best prepared and most ideal candidate for this crucial appointment, the American people and global community will suffer most from getting a less qualified person on the job. The conflict is a variation on the character-versus-competence debate.  This has been a revolving theme in presidential elections, with the “character” guy, that is the one portraying his character as superior, winning most of the time.  And yet here we are, immersed in multiple wars and the most difficult economic circumstances in at least 80 years. Not to excuse Geithner, but is it not possible that his transgressions might reflect the burden of paper work connected with taxes, rather than an arrogant attempt to avoid his civic duty? With a simpler tax code, fewer opportunities would exist for mistaken filings.



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