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Geithner gains currency

Image overhaul has been a key part of administration's economic plan

Analysts say Geithner's accessibility has yielded tangible results. Analysts say Geithner's accessibility has yielded tangible results.
By Joseph P. Williams
Globe Staff / May 17, 2009
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WASHINGTON - After a rocky start that led Republicans, some Democrats, and political pundits to call for his resignation, Treasury Secretary Timothy Geithner's stock is on the rise.

Investors on InTrade, the Internet exchange that deals in predictions of events, have been selling off futures in Geithner's anticipated resignation, which had been one of the market's hottest commodities earlier this year. After reaching a peak of $20 in mid-March, two weeks after Geithner's poorly received speech sketching out the Wall Street rescue plan, bets that Geithner would resign or be fired by Dec. 31 hit bottom this week, closing at $2.50.

Political public relations strategists say the turnaround in Geithner's image has been the result of a savvy White House, transforming him from a policy-oriented Wall Street insider speaking in jargon to the financial mechanic entrusted by President Obama to repair the nation's sputtering financial engine.

In the past few months, Geithner has done one-on-one interviews on shows like "60 Minutes" and "Charlie Rose," has written newspaper editorials, and has held casual, off-camera briefings with Capitol Hill reporters, explaining the Obama administration's plans in clear, direct language. The increased visibility has had results: The New York Stock Exchange, reacting to Geithner's more detailed financial-rescue plan, has staged a modest rebound, and polls show Americans are more confident.

Last week, People magazine listed Geithner among its 100 Most Beautiful People, a glamorous list that includes Angelina Jolie and teen heartthrob Zac Efron. And on Monday, Geithner will appear in a live question-and-answer session at the National Press Club, simulcast on Facebook.

Geithner's image has been nearly as important to the Obama administration's financial rescue plan as the plan itself, said Dean Baker, codirector of the Center for Economic Policy Research, a Washington think tank.

"What moves the stock market is perceptions," Baker said. If Wall Street and the public have confidence in Geithner, "that, to some extent, creates reality," spurring rallies on the stock market and boosting sales at influential New York bond houses.

Peter Fenn, president of Fenn Communications Group, said the White House has helped Geithner become more accessible - and almost certainly coached him how to deliver a complicated message more simply. His public image softened as more details of his background emerged, Fenn said, including Geithner's love for surfing and his upbringing in Asia and Africa, where his father worked in international development.

As Geithner goes, so goes Obama's financial plan, said Fenn, an influential Democratic consultant. "Right now, they're doing all the right things they need to do to push their agenda through," he said. "They're doing it in a smart way."

Geithner won praise when Obama introduced him as his pick for treasury secretary in January 2008, but the smooth confirmation that had been anticipated snagged on headlines that he owed tens of thousands of dollars in taxes. He paid the arrearage and won confirmation, but critics grumbled that Geithner was too close to the executives at fault for the Wall Street meltdown.

In early February, days after taking office, Geithner announced his plan to spend $250 billion to $500 billion to encourage investors to acquire the soured, mortgage-related securities at the root of the crisis. But skeptical bankers and lawmakers, believing the plan to be short on details, excoriated him, and the Dow Jones industrial average sank nearly 5 percent.

As the stock market languished, calls for his resignation grew louder after news that executives at the bailed-out insurer American International Group received large retention bonuses - and critics blamed Geithner for allowing it to happen. So did the public, according to a Gallup poll in March: Just 42 percent approved of the way he handled his job.

The discontent was so strong that Obama declared that he wouldn't accept Geithner's resignation, even if it were offered, and followed up with a public vote of confidence to reporters on the White House lawn. The president singled out Geithner, who was standing nearby, just before boarding the Marine One helicopter.

"Nobody's working harder than this guy," Obama said.

Fenn said Geithner had "a baptism by fire. He's obviously a fast learner, very articulate," but needed help delivering the message publicly. Geithner, he said, "is a pretty good communicator, but he's not a member of Congress. He's not someone who's spent his life in front of the camera."

Tom Rosenstiel, director of the Pew Center Project for Excellence in Journalism, said Geithner "was pretty green" at public relations, but got better as the press and the public have gotten to know him and his plan. "Nobody's nominating him for sainthood at this moment, but there isn't a feeling that Obama has to fire him and start over," Rosenstiel said.

Baker said Geithner's survival, and early success "is the triumph, at this point, of form over substance." In February, he said, "it was clear he didn't have a plan. As a P.R. thing, his speech was just a disaster" that could have cost Obama significant support.

By contrast, "the way he dealt with the stress test - they managed that quite artfully," Baker said, referring to Geithner's plan to check the financial heartbeats of the nation's major banks. By selectively leaking the results and working with the media, the plan "got very good press. The bank stocks rallied in part because of that. In that sense, the White House got what they wanted," he said.

Yet it remains to be seen if Geithner's higher public approval ratings, his designation as a beautiful person, and his rising stock on sites like intrade.com can withstand a reality check, Baker said.

"I think there are real problems with the plan," he said, adding that the entire financial sector likely will need serious reform - and more public money - to truly become solvent. "I don't think everything is OK. At the end of the day, what is going to matter is substance."