Keynesian Economist Paul Krugman, Federal Reserve Chairman Ben Bernanke and a handful of others are being much talked about candidates to replace Treasury Secretary Timothy Geithner, who was reported to be leaving his post by the end of January.
Although President Barack Obama has yet to select anyone as a replacement, the liberal community has urged the president to tap Krugman, a prolific economist for the left and proponent of John Maynard Keynes’s ideas.
On Sunday, Moveon.org sent out an email message from actor Danny Glover, who encouraged everyone to sign a petition to the president urging him to nominate Krugman as head of the Treasury Department.
“We urge you to nominate Paul Krugman for Treasury Secretary. Krugman will protect Social Security and Medicare from benefit cuts, promote policies to create jobs, and help defeat the austerity dogma in Washington and around the world,” the petition statement read.
The background of the petition stated that media reports suggest the White House will support a candidate that is in favor of “the Wall Street agenda of cuts to Social Security and Medicare benefits and other domestic spending rather than government policies to create jobs.
“We want President Obama to nominate Nobel prize-winning economist Paul Krugman, who opposes austerity and wants the government to focus on creating jobs,” the petition background added.
The petition has generated more than 186,000 signatures (at the time of this writing) and needs 200,000 signatures in total.
One of the latest signees of the petition was Robert Wasberg of Huntley, Illinois, who admitted that he follows Krugman and agrees with his opinions.
“I follow, agree, and respect the opinion of Paul Krugman on fiscal matters,” wrote Wasberg. “I don’t believe austerity is the priority, rather improving the economy will have a much better chance of quickly reducing the deficit.”
Krugman is an advocate of big government and has urged Washington officials to spend a lot of money to get out of the present economic predicament. Not only has Krugman called for the federal government to increase its stimulus spending measures, he has also insisted on the Federal Reserve to print more money and expand its quantitative easing policies.
He has also made controversial and incorrect statements in the past, such as promoting the refuted Broken Window Fallacy (space aliens and war create economic growth) and encouraging “a housing bubble to replace the Nasdaq bubble.”
In a December New York Times post titled “Rumors of a Deal,” Krugman explained that Washington should not cut entitlement spending and there should be no reforms either, like raising the Medicare age because it would “would kill people.”
Meanwhile, PolicyMic opined that Bernanke could be a potential replacement, especially considering that he is one of the most influential men when it comes to central economic planning and is attributed by many as being the one to stave off sheer economic collapse, although the economy hasn’t much improved since the 2007/2008 financial downfall.
“Overall, Bernanke could certainly be strong Secretary of the Treasury,” stated the publication’s Michael Tracht. “With the Fed’s independent authority, Bernanke is a distinct outsider in terms of day-to-day partisan politics, one who has repeatedly refused to use his position to advocate for political decisions, like tax rates, that don’t affect the Fed’s operations. He is respected in the financial community, and looking at his Chairman-appointment votes, he is broadly supported in the Senate as well. If President Obama were to choose Chairman Bernanke to replace Secretary Geithner, it wouldn’t be an earth-shattering choice.”
Bernanke has been harshly criticized over the past few years for his questionable actions at the Fed. Some of his ardent opponents, mostly supporters of retired Texas Congressman Ron Paul, libertarians, those who want to abolish the Fed and some Republicans and Democrats, have long argued that the entity’s monetary policies have created more harm than good.
Measures taken by the Fed include zero-percent interest rates, purchasing Treasuries and bonds (inflation), bailing out domestic and international financial institutions to the tune of $16 trillion and maintaining a goal of having a $6 trillion balance sheet in the next few years.
Although the Fed claims to be an independent agency, many make the claim that it has become politicized over the years; especially with the federal government having an enormous national debt and a spending problem (see this article here).
Neither Krugman nor Bernanke are likely candidates to replace Geithner. According to various press reports, one of the frontrunners is White House Chief of Staff Jack Lew, who doesn’t have sufficient financial experience, though.
Other candidates include American Express Co. Chief Executive Officer Kenneth Chenault, Under Secretary of the Treasury for International Affairs Lael Brainard, Deputy Secretary of the Treasury Neal Wolin, Chairman of the Commodity Futures Trading Commission Gary Gensler and COO of Facebook Sherly Sandberg.