A Look at Three More Potential Treasury Heads

One of the earliest and most intriguing names to emerge as a possible Secretary of the Treasury in the Obama administration is that of Warren Buffett.  Buffet, the chairman of Berkshire Hathaway Corporation and "The Oracle of Omaha" was an early advisor to President-elect Obama during the presidential campaign and in the early days of transition planning.  As a non-politician and a philanthropist who is in the process of giving away much of his wealth he is unlikely to make a lot of waves among administration foes.

Mr. Buffet, born and raised in Omaha, Nebraska, is 78 years old and usually considered, with net wealth of $62 billion, to be the world's second richest person after Microsoft founder Bill Gates.  He has pledged most of this fortune to the foundation run by Gates, a long-time bridge partner.

Buffet, the son of a stockbroker and Congressman showed an early affinity for investing, at age six buying a carton of Coca Cola for $0.25 and selling the six bottles for a nickel each.  He filed his first income tax return at age 13, declaring as a business expense the $35 he paid for a bicycle for his paper route.  After graduating from the University of Nebraska, Lincoln he received a MS from Columbia University where investing authority Benjamin Graham taught him to hunt for undervalued stock. 

While Buffet has bought large stakes in such companies as Anheuser-Busch and Wells Fargo over the years, most of his fortune came from the outright purchase of undervalued and generally well managed companies starting with textile firm Berkshire Hathaway in 1965.  Since then the corporate portfolio has expanded to include insurance companies (Geico), clothing, apparel (Fruit of the Loom), home furnishings (R. C. Wiley & Jordans), and utilities.  He is known as a hands-off manager, allowing the executives of most of his companies to continue on the course they had been following when he bought them.

Buffet's marital history probably would have set tongues wagging 25 years ago had it been widely known, now it just seems rather rakish and quaint for a man in his 70s.  After 25 years of marriage, in 1977 his wife Susan moved to San Francisco to pursue a singing career, first introducing Buffet to a close friend.  The introduction clicked and Buffet and Astrid Menks lived together for the next 29 years, marrying only after Susan died in 2006.  For many years the three sent Christmas cards to friends over all of their names.

Although the U.S. News and World Report article we cited earlier gives Buffet only a 100 to 1 shot at becoming Treasury secretary, both President-elect Obama and Senator McCain mentioned him as a possibility for the position during the second presidential debate.

While his strengths for the position are his sound business judgment, credibility, and conservative approach to spending, his age is not in his favor.  It is also likely he would have little patience with government bureaucracy, and as U.S. News put is, "He is way too smart to take the job."

Timothy F. Geithner is U.S. News's favorite for Treasury Secretary based on their computation of the odds with chances ranked at 2 to 1.  He has been president and chief executive officer of the Federal Reserve Bank of New York since 2003 and serves as the vice chairman and a member of the Federal Open Market Committee which formulates the nation's monetary policy.

Mr. Geithner was employed by the Treasury Department from 1988 to 2001 where he served as Undersecretary for International Affairs as well as in other capacities.  He then spent two years with the International Monetary Fund as director of the Policy and Review Department.

He holds an undergraduate degree in government and Asian studies from Dartmouth College and graduate degrees in International Economics and East Asian Studies from the Johns Hopkins School of Advanced International Studies.  He has lived in several countries in Asia and East Africa and speaks Japanese and Chinese.  Geithner is married and has two children.

Since the current economic mess began, Mr. Geithner has served as the Federal Reserves point man in implementing the federal response to the financial crises.  

U.S. News cites this current hands-on experience and the ease of transition it implies as one of the key reasons for favoring Geithner's appointment; along with the fact that he does not have close ties to Wall Street.  On the other hand, the magazine considers his relative youth to be a drawback to his selection.

Right after the November 4 election much of the Treasury Secretary buzz centered on Lawrence H. Summers, an Obama advisor during the campaign and officially a member of the presidential transition team.  Summers was the last of William Clinton's Treasury secretaries and was, until an unfortunate implosion, the President of Harvard University.

In the last few days, however, Summer's star seems to have lost some of its luster, apparently due to traits which caused one insider to refer to him as a "social klutz."  And indeed he does seem to get himself in a lot of trouble.

Summers was born in 1954 in New Haven, Connecticut to two economics professors at the University of Pennsylvania and is the nephew of two Nobel laureates in economics, Paul Samuelson and Kenneth Arrow.  He received his education at the Massachusetts Institute of Technology where he switched his major from Physics to economics and Harvard where he received a Ph.D. in 1982.  He subsequently taught at both of his alma maters.

Summer's public service includes membership in President Reagan's Council of Economic Advisors and Chief Economist for the World Bank.  He held several posts at the Treasury Department before being named its secretary in 1999.

At the end of the Clinton administration in 2001 he returned to Harvard as its president and there managed to put his "social klutziness" on full display, offending, in turn, several large Harvard constituencies.

First, in a private meeting with Cornel West, Summer criticized the prominent African American Studies professor for missing too many classes, contributing to grade inflation, and neglecting academic pursuits.  West left Harvard shortly thereafter, angering much of the faculty as well as Black students.

Next he said that a movement of Harvard faculty to make the university divest its stock in companies with holdings in Israel was part of a larger liberal academic tendency that he called "Anti-Semitic in effect if not in intent."

Then Summers really did it. 

In January 2005, speaking at a National Bureau of Economics Research Conference on Diversifying the Science & Engineering Workforce, he suggested that one possible reason why there were more men than women in high-end science and engineering positions was men's greater innate abilities or innate preferences for the field.  While people who knew him well said he had merely been throwing out a topic for discussion, the remarks started a firestorm on campus and among women's groups everywhere.  In July 2005 he resigned his position.

Summers is an ardent proponent of free trade and globalization.

On November 8, U.S. News rated Summers as having odds of 5 to 2 of being named Treasury Secretary.  His faux pas regarding women academics is one strike against him, another is his positions at Treasury during a time when deregulation of the financial system was taking beginning.  In his favor is that he previously held the position and could hit the ground running in a time of crisis.