Networks Gloss Over Geithner's Past, Ignore Criticism

     It looks like journalists are adopting the Chris Matthews philosophy of covering the transition into President-elect Barack Obama’s administration: don’t rock the boat.


     Broadcast network news reports glossed over Obama’s chief of staff, Rep. Rahm Emanuel’s history with the Freddie Mac. And since the day after the election, they’ve been paving the way for the new administration’s incoming Treasury Secretary, New York Federal Reserve Bank President Tim Geithner.


     In the immediate aftermath of Obama’s election, network journalists covering Obama’s possible picks for key economic positions touted Geithner as “highly regarded,” “brainy,” “well-thought-of,” “much-admired” and deserving “tremendous respect.” Of 56 stories mentioning Geithner between Nov. 3 and the official announcement of his selection Nov. 24, 34 portrayed him in a positive light while 22 were neutral or balanced. There were no negative stories about his appointment.


    More striking, however, was journalists’ refusal to explore Geithner’s history as a bureaucrat in the Clinton administration and his involvement in the much-criticized decision to allow Lehman Bros. bank to fail. Less than 10 percent of the stories – five of 56 – mentioned his involvement in the Lehman failure and nine reported his work in the Clinton administration.


     In post-election coverage on NBC, political correspondent Andrea Mitchell mentioned Geithner as a possible choice for Obama’s Treasury. She said he was “very much admired” and commanded “tremendous respect” from Wall Street. She also praised Geithner as “not partisan. He’s an independent, registered independent.” She never mentioned he had served in the Clinton administration.


     Mitchell praised Geithner again on the “Today” show Nov. 6, calling him “highly regarded.”


     ABC’s Claire Shipman called Geithner “brainy” on “Good Morning America” Nov. 5, and declared he had “been helping to manage the crisis.” That night, CBS’s Jim Axelrod told “Evening News” viewers Geithner was “well thought of on Wall Street.”


     When it became clear Geithner would be Obama’s pick to head the Treasury Department, journalists ignored much of the criticism of his time at the Fed, instead focusing heavily on Geithner’s positives, including the stock market’s positive reaction to his selection. On Nov. 20, New York Times editor Marcus Mabry told CBS’s “The Early Show” Geithner fit perfectly into Obama’s image of change.


     “If one wants to bring new people, if one wants to bring new bodies, new blood, a kind of best and brightest, Tim Geithner, head of the New York Fed, really at the center of this Wall Street meltdown we’ve seen, someone with lots of experience in this particular morass, someone might be able to bring more confidence, restore confidence in the markets,” Mabry said.


     In a segment package aired on the Nov. 21 “Nightly News” and the Nov. 22 “Today” show, Mitchell declared Geithner a “first among equals.” “The Obama team sees Geithner as representing what it calls change, someone who doesn’t come from a Wall Street investment bank.”


     While Geithner’s fresh image impressed journalists like Mabry, other reporters praised him for exactly the opposite characteristics. “In Geithner’s favor,” CBS’s Michelle Miller said on “The Saturday Early Show” Nov. 22, “he’s not new to Washington. Before moving to New York in 2003, the 47-year-old financial chief spent 15 years inside the Beltway, worked at Treasury under three administrations, including Bill Clinton’s, and has allies on both sides of the aisle.”


     Mitchell, Mabry and others failed to point out Geithner’s long history working in government – more than a decade in the Treasury Department and time at the International Monetary Fund – and his involvement in the much-criticized decision to let Lehman Bros. bank fail – two aspects of his career that might raise questions about whether the promised “change” is really coming.


Letting Lehman Fail


     When Lehman Bros. filed for bankruptcy in September 2008, Geithner was in many ways the man who decided the company would fail, rather than be rescued as others had. But the criticism of his decision has been forgotten amid the glowing coverage of Obama’s new Treasury Secretary. Only five of 56 stories have references his involvement in Lehman negotiations.

     “But in an hour-long conference call with government officials, [Lehman CEO Richard] Fuld’s hope was dashed when the president of the Federal Reserve Bank of New York, Timothy F. Geithner, refused to change the rules to enable a quick benefit from the change Mr. Fuld had sought,” The New York Times reported Oct. 5

     The BBC mentioned Geithner’s Lehman connection in its profile of the incoming Treasury Secretary Nov. 23. “He played a pivotal role in the intense negotiations which took place before Lehman Brother went bankrupt,” the British news agency reported, “and also helped forge the deals involving AIG and JP Morgan.”


     Bailout proponents were harsh in their criticism of Geithner. CNBC’s Jim Cramer advised against appointing him to Treasury in a Nov. 11 column on “If Tim Geithner, the New York Fed chairman, gets a top spot in the Barack Obama’s Cabinet [sic], we are done, finished, kaput. It is that simple,” he wrote.


     While withholding government assistance to Lehman might have been the right decision from a free-market perspective, it earned Geithner a lot of criticism that broadcast networks generally ignored in covering his appointment.


     Cramer cited Geithner’s “fateful decision … to let Lehman Brothers die. Geithner had within his possession compelling evidence of what could go wrong if he closed it,” Cramer wrote. “He ignored it. He made the most wrong decision of wrong decisions we have seen in this era. He is a total fool.” Cramer predicted Geithner would “be cheered when he gets the job” – which has turned out to be true – but that, “He will be a total disaster.”


     Cramer himself changed his tune on the Nov. 24 “Today” show. There he called Geithner a “smooth hand. I wish he weren’t involved with what’s going wrong but the transition is bold, smart, fast, good.”


     Cramer’s network colleagues followed his lead in forgiving his involvement with Lehman. Only two of the 32 stories mentioned it – both came from NBC’s Andrea Mitchell.


     “Geithner does have his critics,” Mitchell reported on the “Saturday Today” show Nov. 22. “Some blame him for letting Lehman Brothers go under, a decision he shared with Treasury Secretary Hank Paulson.”

Recreating the Clinton Administration


     Obama’s cabinet is shaping up to be a reestablishment of much of the Clinton administration – Obama named former Clinton economic adviser Peter Orszag as his new director of the Office of Management and Budget. Other rumored Clinton-era members of Obama’s cabinet include Eric Holder (a former Clinton Justice Department official under consideration for Attorney General), Bill Richardson (Clinton’s Energy Secretary now being considered for Commerce), and Sen. Hillary Clinton (who worked on health care issues during her husband’s administration and is expected to be Obama’s Secretary of State.)


     Geithner is typical – having worked in the Clinton-era Treasury Department only to return under Obama.


     But the connection appears to contradict Obama’s promise of change, and the networks have largely ignored it. Only nine of the 56 stories mentioning Geithner have alluded to his history.


     Journalists left it to liberal commentators like New York Times columnist Paul Kruman to reference Geithner’s history in previous administrations. “[T]here is really not an ideological hairs worth of difference among the various people,” Kruman said on ABC’s “This Week” Nov. 16. “Geithner is a [former Clinton Treasury Secretary Larry] Summers protégé.”


     NBC’s Tom Brokaw alluded to Geithner’s Clinton history as well. On the “Today” show Nov. 11, Brokaw mentioned Geithner as a “former Bob Rubin aide in the Treasury Department who worked with Larry Summers.”


     Even though Geithner’s experience seems to contradict the Obama mantle of “change,” the incoming administration is less ashamed of the Clinton connection than the broadcast networks. Obama’s incoming senior adviser had to remind former Clinton adviser George Stephanopoulos of the history.


     “As you know, George, in the 90s he was the assistant treasury secretary for international affairs, and he handled a couple of international financial crises,” David Axelrod said on ABC’s “This Week” Nov. 23.