When a Democratic president takes office, the tradition is to reassure Wall Street by appointing as treasury secretary either a Republican or a Wall Street Democrat.
Timothy F. Geithner
As president of the most important of the regional Fed banks since November 2003, Geithner has not only had a front-row seat at the most serious financial collapse since the 1930s, he is the key public official who has prevented it from becoming another Great Depression. Despite being a Democrat, he was named president of the New York Fed after two stronger and more conservative candidates withdrew.
Speaking to the Economic Club of New York last June, Geithner called for a far-tougher regulatory policy to alter "the level and concentration of risk-taking across the financial system." He got quite specific, saying regulators "need to make it much more difficult for institutions with little capital and little supervision to underwrite mortgages." The speech is a blueprint for fundamental overhaul.
Sheila Bair
With Bair, Barack Obama would get a fully credentialed and expert Republican-but one who is more progressive on financial regulatory issues than most Democrats. That might appeal nicely to Obama’s wish to be simultaneously bipartisan and progressive.
A Republican Bush appointee to the FDIC, she nonetheless has emerged as the toughest of the several banking regulators in the current financial crisis. She leaned hard on Bush to sign the recent mortgage-refinancing bill and supported an even tougher version. She has been a strong ally of Democrats Barney Frank and Chris Dodd as they push for better banking regulation.
Like Timothy F.Geithner, she knows Wall Street but is not of it. She was a banker from small-town Kansas before becoming a senior staffer to former Sen. Bob Dole. Many small-town bankers display a populist aversion to Wall Street, which often takes advantage of Main Street.
