Transition is in the air: the Wall Street Journal, the Washington Post and the Los Angeles Times all lead with reports that Barack Obama, under pressure to fill a perceived leadership vacuum in the face of the global financial crisis, is to appoint Timothy Geithner, the president of the Federal Reserve Bank of New York, as his treasury secretary. Obama's pick of a technocrat with a background in crisis management was welcomed by Wall Street: After reports of Geithner's selection, the Dow rallied in the final hour of trading to end up almost 500 points in a strong finish to an otherwise wretched week.
Today's other big story also comes courtesy of the Obama transition team: The New York Times leads, and the Post and LAT off-lead, reports that Hillary Clinton now seems likely to accept a job as Obama's secretary of state. Leaks suggest that the Obama camp is now confident that Clinton's nomination will not present any conflicts of interest and that—according to Clinton "confidants"—the New York senator is now willing to give up her seat and join Obama's star-studded Cabinet.
In the absence of action from Congress or the White House, Obama's rapid selection of Geithner as treasury secretary appeared intended to reassure jittery investors and provide a sense of direction. In that sense, analysts tell the NYT, the speed of the decision mattered more than the specific merits of the man Obama tapped to run the Treasury. "The most important thing for the market and for the economy is that these decisions are made and uncertainty is removed," noted one relieved investor.
Still, there's a broad consensus that Geithner has the chops for the job. He's something of a crisis-management specialist, having worked in the 1990s on bailouts of Mexico, South Korea, and Indonesia. More recently, he was an early critic of the arcane financial instruments at the heart of the current crisis, and worked closely with current Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke on the Bear Stearns and AIG bailouts, as well as on the controversial decision to hang Lehman Bros. out to dry.
An IMF alumnus who once worked for Henry Kissinger, Geithner doesn't have close ties to Obama and is seen as politically independent. His appointment was welcomed by conservatives, and viewed with slight concern by some union leaders. Still, Geithner is perceived as the product of Clinton-era economic centrism, having worked closely with Clinton-era Treasury Secretaries (and Obama economic advisers) Lawrence Summers and Robert Rubin.
The NYT notes that Rubin protégés are likely to dominate the Obama economic team, which is expected to be rolled out in full on Monday: Rubin ally Peter Orszag is expected to become budget director, while Clinton-era budget director Jacob Lew is likely to head up the White House's National Economic Council. Summers—once seen as a front-runner for the Treasury job —is likely to stay on as a senior White House adviser, perhaps foreshadowing a promotion to chairman of the Federal Reserve when Bernanke's term ends in 2010, while Gov. Bill Richardson will become commerce secretary.
Obama is also moving to pin down the details of his security and diplomatic team —and it's looking increasingly likely that former rival Hillary Clinton will head up the State Department, becoming Obama's public face on the international stage. The pair spoke by telephone Thursday, reports the NYT. Obama reportedly assuaged Clinton's lingering concerns about access and personnel, leaving her inclined to accept the position. A Clinton spokesman said discussions remain "very much on track," although a formal announcement isn't expected until sometime after Thanksgiving.
The WSJ eyes the diplomatic problems Clinton would face in her likely new role; in an editorial, the paper calls Clinton's nomination "a clever, interesting choice", but says Obama's team of rivals could prove more trouble than it's worth. The Post notes dryly that installing Clinton at Foggy Bottom suggests the president-elect has "a tolerance for drama," but argues that the pick also speaks to his confidence and his determination to assemble an experienced, smart, and pragmatic group of advisers. The NYT argues that the appointment—along with Geithner's appointment to the Treasury and former NATO commander James Jones' likely selection as national security adviser—suggests that Obama will be a pragmatic, center-right president. "This is the violin model: Hold power with the left hand, and play the music with your right," notes one former Clinton official.
In other news, things are looking bleak for General Motors: The WSJ fronts word that some members of the company's board would be willing to consider filing for bankruptcy, a measure opposed by the automaker's chief executive. The NYT turns its attention to the Chevrolet Volt, which GM is currently touting as evidence that a federal bailout would be a sound investment: The plug-in hybrid is scheduled to hit showrooms in 2010, but some industry analysts say the expected $40,000 price tag means the vehicle will have only a niche appeal.
And finally … could piracy on the high seas help to rehabilitate neoconservatism? In an essay for the WSJ, historian Michael Oren compares the pirates currently wreaking havoc off the Somali coast to the Barbary buccaneers who attacked American merchants two centuries ago, and concludes that only U.S. military might can restore order to the world's shipping routes. "Addressing the threat of Somali pirates must be made a national priority while there is still time," he writes. "Much like terrorism, piracy, unless uprooted, will mushroom."