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— Analysis —
 Whether or not the next administration picks up outgoing Treasury Secretary Henry Paulson's ambitious plan to restructure capital markets regulation, his successor must deal somehow with the lingering effects of the credit crunch and address the country's more intractable economic problems. Here's a look at the most talked about possibilities to lead the Department of the Treasury in either a McCain or Obama administration. McCain Phil Gramm. A UBS Investment Bank vice chairman and ex-U.S. senator, Gramm had been co-chair for John McCain's campaign and served as one of his economic advisers. But Gramm had a rough summer. During the primaries, he was widely considered a shoo-in to be McCain's pick for secretary, but spiking oil prices focused attention on the usually ignored Commodity Futures Trading Commission (which his wife, Wendy, had headed) and Gramm's maneuvering to enact a 2000 law limiting its ability to monitor oil trades. His current employer, Switzerland-based UBS, is floundering because of the U.S. credit crisis, and Gramm was lobbying for it before he even registered as a lobbyist. Add to that his comments about America being a nation of whiners, and Gramm presents a fairly toxic brew.
Gramm, despite his doctorate in economics from the University of Georgia, would face a hostile confirmation in an overwhelmingly Democratic Senate. McCain's choice of Sarah Palin for running mate shows he isn't afraid of risky Cabinet picks, but Gramm, a partisan warrior since the Reagan era, has no chance of winning confirmation, despite senators' tradition of waving former colleagues into administration posts. Chance of nomination: 15%. Carly Fiorina. Fiorina's star has once again risen since she was forced out as the chairman and CEO of Hewlett-Packard Co. in 2002. The acquisition of Compaq Computer Corp. landed her in hot water with the gearhead contingent on HP's board, but common wisdom now has it that the deal turned out to be a good one. Fiorina is a major GOP fundraiser and serves as the Republican National Committee's "Chair of Victory, 2008." She also advises McCain on business and economic affairs. But Fiorina's expertise is really in marketing and management, skills more appropriate for secretary of commerce, whose main job is to be an advocate for free trade and American companies seeking access to overseas markets. With the capital markets still reeling, Wall Street will look for someone with more experience in trading and economic analysis to lead Treasury. Chance of Treasury nomination: 10%. Chance of Commerce nomination: 85%. Martin Feldstein. Currently a Harvard economics professor, Feldstein is a revered Republican political figure. He was President Reagan's chief economic adviser and chairman of the Council of Economic Advisers from 1982 through 1984, a position also held by former Federal Reserve Board Chairman Alan Greenspan. In 2006 President Bush named Feldstein to the President's Foreign Intelligence Advisory Board. He received the John Bates Clark Medal of the American Economic Association in 1977, a prize awarded every two years to the economist under the age of 40 deemed to have made the greatest contribution to economic science. Feldstein would bring both a high-profile name and well-regarded academic and business experience to Treasury. Chance of nomination: 45%. Douglas Holtz-Eakin. An economist and former director of the Congressional Budget Office, Holtz-Eakin served for 18 years as chief economist for the president's Council of Economic Advisers under the current President Bush and for two years as senior staff economist for President George H. W. Bush's Council of Economic Advisers. Now he's a senior policy adviser for McCain. According to his bio, Holtz-Eakin is an expert on the economics of all areas of public policy but has particular expertise in healthcare and globalization. He has the analytical heft for the job but probably lacks the necessary Wall Street or industry experience. Chance of nomination: 25% Dark horses: New York Mayor Michael Bloomberg and current Treasury Secretary Henry Paulson. Both men have said they don't want the job, but an appeal by McCain would be hard to turn down. Obama Laura Tyson. Like Feldstein, Tyson is a former chair of the president's Council of Economic Advisers. She has a heavy hitter's resumé and being a woman helps her political appeal. She was the first female dean of the London Business School and is on the boards of Morgan Stanley, AT&T Inc. and Eastman Kodak Co. The Massachusetts Institute of Technology-trained economist is a professor at the Haas School of Business of the University of California, Berkeley. Tyson is not only an Obama adviser but has been one of his main representatives in the press. In several recent interviews, she has backed his plan to provide another stimulus rebate for taxpayers as well as energy rebates, foreclosure prevention assistance and additional unemployment compensation to the states. Chance of nomination: 45% Timothy Geithner. The president of the Federal Reserve Bank of New York and vice chairman of the Federal Open Market Committee helped Paulson engineer the bailout of Bear Stearns Cos. Geithner is respected on Wall Street and has an extensive background in international economics. He's already served at the Treasury, as undersecretary for international affairs in the Clinton administration. His close relationship with Paulson may have left him too closely identified with the Bush administration to be palatable to an Obama White House. Chance of nomination: 20% Stuart Eizenstat. Now a partner at Washington law firm Covington & Burling LLP, Eizenstat served in the Carter administration as chief domestic policy adviser, in the Clinton White House as a deputy treasury secretary and at the Department of Commerce as an undersecretary for international trade. Eizenstat has already earned "Washington wise man" status and is more likely to serve Obama as a behind-the-scenes mentor -- unless he's asked to take over Treasury to quell some future crisis. Chance of nomination: 20% Austan Goolsbee. Since the Democratic nominee's U.S. Senate campaign, Goolsbee has been Obama's closest economic adviser. Though the University of Chicago Graduate School of Business economics professor is not the kind of conservative economist the school is known for, Goolsbee brings to Obama enough of a reach across the partisan divide to temper the candidate's own left-leaning record. Goolsbee is senior economist to the Democratic Leadership Council, a research fellow at the American Bar Foundation and a member of the Congressional Budget Office's panel of economic advisers. Goolsbee's lack of day-to-day industry or government experience would be a sizable handicap in securing the Treasury spot. Look for him instead to chair the Council of Economic Advisers, a position that has been a springboard for a couple of Fed chairmen. Chance of nomination: 10% Dark horses: New Jersey Gov. Jon Corzine and Connecticut State Treasurer Denise Nappier. Like Paulson and Robert Rubin before him, Corzine would be the latest in a string of ex-Goldman, Sachs & Co. chiefs to be treasury secretary, which is why he won't get the job. Nappier is the first African-American woman elected to serve as a state treasurer in the U.S. First elected in 1996, she has won re-election twice. She has used her role as overseer of the $26 billion state retirement plan to push for corporate governance reforms at a number of companies. Nappier would be a long shot even in a good economy, which this isn't. |
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