Canthook

If Hillary made 18 million cracks in the glass ceiling, Barack made 80 million cracks in the iron ceiling, and he busted through. We're all hoping that he does well, not just because it's important for race relations that he does well, but because we're in sad shape right now, and we're all going to be a lot sadder if he can't pull us out of the hole Mr. Bush has gotten us into.

So it's with deep regret that I look at his nominee for Secretary of the Treasury, and repeat the question Jay Leno famously asked Hugh Grant, "What the hell were you thinking?"

This is, after all, the most important single appointment made by a president in half a century.

"People say Geithner's going to be the next treasury secretary," says the VP.

"Oh, God," Cramer moans. "I must stop that. TV host says, 'Must not happen.' I think he's just way over his head, okay? Way over his head. If he's gonna be the treasury secretary, we're in a big, big jam.

-- Scott Raab profile of Jim Cramer in current issue of Esquire

It's not the nanny problem (and we'll get back to that) that I'm referring to, but Tim Geithner's role in the collapse of the economy.

"If Tim Geithner ... gets a top spot in Barack Obama's cabinet we are done, finished, kaput. It is that simple," said Jim Cramer, of CNBC's "Mad Money". I don't normally recommend you take Jim Cramer with a pinch of salt. He's not an economist, he's an entertainer, by his own admission, but in this case, I have to agree.

Geithner has never taken risk, never worked as a trader or in credit, or even had operational responsibility in a bank. I am as qualified to be Secretary of the Treasury as he is, and probably more - and I'd suggest that anyone who would nominate me for that position have an involuntary 72-hour visit to the locked wing of the hospital for a mental evaluation.

A cabinet-level officer normally needs to be honest, and an experienced and capable manager. It helps if he has some knowledge, or better yet, some actual experience, in the area he's managing. His credentials seem a little thin to meet those requirements. But these times aren't normal. We don't need a middling-good manager, we need an effing genius, a madman, and if it means accepting someone who isn't true and square, well, that's the price you sometimes need to pay.

Geithner is by no means a genius. Neither was Paulsen, for that matter. Instead of using the first $350 billion traunch wisely, Paulsen frittered it away. Geither hasn't the slightest idea how to do any better than that.

I mentioned earlier that Geithner has a nanny problem. It's actually a housekeeper, in this version of NannyGate. Instead of paying social security on his domestic help, he conveniently forgot to do that, and stuck the $43,000 in his pocket.

You realize, of course, that the Internal Revenue Service comes under the purview of the Treasury Department, don't you? It seems to me that if I were named head of the Treasury Department, that on my first day, I'd call in the head of the IRS's Criminal Investigation Division, and tell him to start hiring, because he's going to set up a special compliance squad. In the next year, I would tell him, I want investigations into every officer and every director of the companies receiving TARP funds, then into other Fortune 500 companies. In the next four years, I want the investigations to be expanded to cover everyone who is an officer or director of a publicly-traded corporation, everyone who files a K-1 from a partnership, and everyone who holds elective office at a state or federal level.

And they are going to be easy investigations to pull off, I'd say. I want you to determine whether the person has domestic help - a nanny, a housekeeper, a chauffeur, whatever - and if they are paying the proper payroll taxes. If they aren't, you are to immediately determine what the back taxes amount to, and make an offer in compromise to the taxpayer: if they agree within 48 hours to pay the back taxes, plus interest, plus a 25% penalty, we will forego prosecution. You tell them they have 30 days to pay up, or they can pay over time, at 18% annual interest.

Now, even if they bring in $20 in taxes for every $1 they spend in labor, the Treasury Department cannot pay this additional help out of the extra taxes they are collecting. The money for labor has to be appropriated, and so you have to cut back somewhere else on labor. I'd do it by eliminating all the seasonal labor hired to process tax returns - and then go to Congress and ask for an additional appropriation, so that people can get their income tax refunds in a timely fashion.

But I wouldn't back down on enforcing the tax code. The constitution demands, I would point out, equal protection of the laws. If we don't enforce the tax code, we are taxing the honest and subsidizing the dishonest.

Many of these domestic employees are non-citizens, and their status is ambiguous. It's not the business of the Treasury Department to enforce immigration laws. If the employees don't have Social Security numbers, the investigators can pass out forms on the spot, and assure the employees that federal law prohibits the Treasury Department from passing along this information to immigration service officers. They need to have their own social security numbers, and make sure their boss pays social security on them, else they will not qualify for benefits when they reach retirement age.

And that will cause another uproar in Congress. Again, I will point out to Congress that they have the ability to fix the immigration problem by properly staffing the immigration offices. In the meanwhile, it would seem appropriate to welcome working-age immigrants, and collect their social security taxes, since that will tend to solve the "baby boom" problem, caused by a too-low birthrate.

In the meanwhile, please, Mr. Obama, please find someone better to run the Department of Treasury. I know you're obsessed with honesty, but in this particular job, at this particular time, a brilliant man who's less that fully honest might well be worth the price.
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Barack Obama - Goldman Sachs - Hank Paulson - Jim Cramer - Lehman Brothers - Scott Raab - Tim Geithner - treasury