Last night, Rahm Emanuel and Treasury Secretary Timothy Geithner had dinner together at Sepia, which sounds like the kind of place you’d take an out-of-town visitor you want to impress. The venison with confit chestnuts, fennel, caramelized onions and sauce poivrade runs $35. Geithner is in Chicago Wednesday to address the Economic Club, so it was a good occasion to sit down with his former White House rival, as they plot President Obama’s re-election.
According to The Escape Artists: How Obama’s Team Fumbled the Recovery, by Noam Scheiber, Emanuel thought Geithner was lightweight, even before he became Treasury Secretary. In fact, Emanuel tried to prevent Geithner from getting the job, by lobbying the president to appoint Lawrence Summers, who had been Bill Clinton’s Treasury Secretary, then president of Harvard University. (He’s the guy who threw the Winkelvoss twins out of his office in The Social Network.) Emanuel thought Geithner should be Summers’s deputy. Instead, Summers was named director of the National Economic Council.
Even after losing that battle, the chief of staff was not about to defer to the second-highest-ranking cabinet member. In February 2009, Geither gave a speech on the financial crisis that Emanuel thought validated his view that the secretary was a dim bulb.
“Emanuel began to treat the Treasury secretary like a half-witted student,” Scheiber wrote. “Often he would summon Geithner to the White House twice a day and check in by phone between visits…. If Geithner was miffed by this treatment, he did not betray it…. `If Rahm wants to think he’s in charge, that’s fine.’”
Today at the Economic Club, Geithner argued for cutting through higher taxes, not reduced spending. (He’s a Democrat.)
“Cutting government investments in education and infrastructure and basic science is not a growth strategy,” [Geithner] said. “Cutting deeply into the safety net for low-income Americans is not financially necessary and cannot plausibly help strengthen economic growth.”
He challenged business leaders who do not like proposals for higher taxes to rally around needed deficit-reduction measures. “The changes are very modest, and on the richest Americans the effective tax rate is still very low. Life is about alternatives. If you do not like the plan, you must ask: ‘Where are you willing to find another $1.5 trillion’” because deficit-reduction is necessary.
This afternoon, Geithner will visit the Ford plant on Torrence Avenue, a popular photo op for politicians who want to talk about the economic recovery.
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