Treasury's non-AIG problem

Back before everyone's job was to spend each waking minute stewing over how on earth the Treasury let AIG keep its bonuses, Treasury had a different problem: it couldn't seem to find any qualified staff. Over the weekend I wrote a piece about this for the Guardian -- right before the AIG news broke -- that they've now published.

In many ways I think the staffing problem is worse, since it directly affects the administration's ability to come up with a financial rescue plan, whereas the AIG problem is arguably a matter of negligence and the wider policy implications are quite limited. I also think the staffing problem is directly related to decisions the administration made about how to run its confirmation process, whereas AIG suffers from some anxiety of influence. In particular, I think the current staffing problem is related to how the administration treated Geithner's own confirmation tangles:

Geithner's confirmation was a fork in the road. One road would have been to argue that the past is the past: people are fallible and mistakes are made, but we want a system in which previous error doesn't preclude future service. The Obama administration did not pick this road. Instead, they argued that the non-payment was a non-issue, and to linger over it would be irresponsible: worrying about a few million jobs was more important than worrying about a few thousand dollars in tax liability. Or, as Obama put it the night of Geithner's confirmation: "We can't waste a day."

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Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism. He was previously a fellow at The Atlantic and an editor at The Guardian. More

Conor Clarke is the editor, with Michael Kinsley, of Creative Capitalism, an economics blog that was recently published in book form by Simon and Schuster. He was previously a fellow at The Atlantic and an editor at The Guardian. He is also on Twitter.

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