From an online jobs listing:

Seeking an experienced communications professional.  Must have experience and savvy about financial pundits.  Help to get the message right.  The successful applicant will have a proven track record of taking complex ideas and selling them in clear and simple language.

The employer is a new enterprise with substantial backing and funding.  The position could include a four-year contract and provide a great resume credential.

Applications will remain confidential.  Please submit to the following address:

Ms. Lisa Brown

White House Staff Secretary
1600 Pennsylvania Ave NW
Washington, DC 20500

The Background

Many top government officials are intelligent, informed, and skilled in decision making.  That may work well for judges, Under-Secretaries, and even top staffers.  A highly regarded Fed Chair seemed to invent a new language in explaining his reasoning.

In many other roles, another skill is required:

Effective leaders must be able to communicate.

Today’s trading shows what can happen when this important fact is ignored.

Geithner’s Maiden Voyage

The Obama administration really wanted Tim Geithner as Treasury Secretary, picking him over the more experienced, and more controversial, Larry Summers.  The President stood by him in the face of controversy over unpaid taxes.  The latest version of TARP, now with a new name and under new management, is Geithner’s baby.  The news accounts suggest that, despite the broad group of economic advisors, the decisions on this program are Geithner’s.

There was widespread understanding that it is crucial to the economy to restore confidence.  In fact, Geithner made this observation on several occasions during the speech and later interviews.  What went wrong?

Problems in the Geithner “Plan”

Market reaction centered on three criticisms:

1. There was no real “plan.”  Instead there was an outline of considerations.
2. There was too much rhetoric and finger-pointing and too little substance.
3. There was no convincing method for restoring “normal” lending, viewed as essential to economic growth.

This was all predictable.  If Geithner had presented the speech to a focus group, this would have been obvious.  The Street perspective is that the Obama team has had three months since the election to figure this all out, so the plan should be in place.  Any savvy communications consultant would have known this, and advised accordingly.

What Now?

For investors the question goes beyond the speech.  We must try to analyze the substance, even though it was more of an outline than a plan.  The most important criterion is whether there is an effort to restore what we call normal and sensible lending.

If the Obama team had a top-notch advisor, that message would have been clear.

We suggested yesterday that the speech would be attacked, and would present a buying opportunity.  It was more of an opportunity than we expected!

Imagine that Geithner had included a statement that mark-to-market accounting would be suspended while we worked through the crisis.  Our guess is that this would have been a swing of about 800 Dow points.

Maybe someone in the Obama administration should be paying attention.

Meanwhile, we believe that the execution will prove better than the delivery.

Last 5 posts by Jeffrey Miller

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