If present trends continue, Timothy Geithner’s Treasury Department may be the smallest since Alexander Hamilton’s. The current secretary seems to be having great trouble filling out his top management team, while the first secretary hardly had one–there was an assistant, a comptroller, and a few clerks.
In moments of financial disaster, Treasury secretaries become sexy. You don’t even have to write Federalist Papers, or be shot. So how do Secs. Hamilton and Geithner compare so far?
1. “Caesar’s wife.” That’s what Hamilton told Henry Lee, a Revolutionary War buddy, that he had to be like when Lee asked him for some insider information. As Caesar’s wife had to be above suspicion, so the nation’s chief financial officer had to have clean hands. Honesty was essential, since there were crooks looking to game the system (one of them, William Duer, even worked for Hamilton briefly). Hamilton’s enemies had him investigated by Congress, and by his successor once removed, Albert Gallatin, after Thomas Jefferson was elected president. But Congress gave him a clean bill of health, and Gallatin told a disappointed Jefferson that “Hamilton committed no frauds” and left “the most perfect system ever formed.”
No one suspects of Geithner of in-office frauds, but coming into office with a blemished tax record crippled his and President Obama’s agenda out of the starting gate, and has made hiring able assistants difficult as the level of inquiry goes up in reaction.
2. “Opinion is the soul of credit.” This line, one of Hamilton’s brilliant throwaways, was also one of his enduring convictions. The right policies and structures were essential, but equally essential were clear and persuasive explanations. Clarity had a double function: It explained the policies to possibly balky lawmakers and taxpayers, and it created an all-important air of confidence. FDR’s defenders like to say, with some truth, that his optimistic manner buoyed the nation all by itself. Hamilton had an optimistic manner–plus, he understood economics.
Hamilton, of course, had advantages that Secretary Geithner lacked: He was a lifelong journalist, going back to his student days at King’s College, and his teenage years in the islands. However you get your message out, though, you have to get it out. Geithner so far hasn’t. The economy sags for reasons of its own, but he isn’t helping.
3. “Private interest.” Hamilton was not a believer in pure laissez faire, and his enemies, down to Thomas DiLorenzo in our own day, hold it against him. He wanted to increase America’s money supply, and he believed in encouraging local manufactures (by subsidies, rather than tariffs). But in the end, he wanted to let private interest work, because he was convinced it would work for the greater good. That’s why he wanted American investors to feel they had a stake in the country, and that’s why he wanted the first Bank of the United States (distant ancestor of the Fed) to be privately run.
No doubt Geithner would say he believes in private interest too. So would President Obama, in certain parts of his speeches. But the porkfest stimulus bill, and the looming health and energy plans, don’t show much deference to it. Geithner is a prisoner of the administration, which is itself in thrall to congressional barons, and to its own misplaced ideals.
– Richard Brookhiser, an NR senior editor, is author of Alexander Hamilton, American.