What the US Treasury needs: magician and economic genius

James Doran assesses the qualities needed to be Obama’s Treasury secretary at a time of unprecedented crisis, and wonders whether the front-runners measure up

As situations vacant go, the position of Secretary of the United States Treasury is unique. The job requires a politician of presidential fortitude, a world-class economist and a magician capable of making a $1 trillion national deficit disappear. Short of genetically engineering the unholy product of Nobel laureate Paul Krugman and conjuror David Copperfield, such a singularly qualified individual is almost impossible to find: no small wonder that Barack Obama was in no rush to make this crucial Cabinet appointment.

If every election hinges on ‘the economy, stupid’, as James Carville observed back in 1992, then this election was no exception. The American economy is in its worst shape since the 1970s; not as bad as the Great Depression of the 1930s, as many doom-mongers would have us believe, but bad enough to impose tight restrictions on the Obama administration throughout the coming four-year term.

The markets, eager to banish the bear back to its cave, forgot this in the first week of November, and forged the view that somehow confidence would be restored as soon as the political vacuum was filled. This is why the Dow Jones industrial average soared by more than 300 points on the day before the election in anticipation of an Obama win.

But the morning after, like a drunk regretting his indulgences of the night before, the markets plunged almost 500 points as the realisation dawned all too quickly that simply electing a new president was not enough to cure America’s economic ills.

It was then that the pundits and the markets demanded to know who the next Treasury secretary would be, as if this revelation would provide the economic panacea that the election night had failed to summon.