Geithner Must Go
Today’s New York Times featured two columns about Tim Geithner. The one by Paul Krugman panned him for his role in the A.I.G. bailout. The one by David Brooks praised him for his efforts saving the financial system.
Both columns keyed off his testimony yesterday before a House panel. I saw clips of that encounter and got some pretty clear insights about the way our Treasury Secretary thinks. They convinced me the man must go.
What made this so obvious was Geithner’s response to a query from one of the House panel’s Republican members. This congressman pointed to the 10.2 percent unemployment rate and asked the Secretary if that didn’t incline him to quit. Geithner proceeded to blow his cool.
He railed that a Republican had no business saying something like this given the record of the eight years Bush and company were messing up the economy, and went on to say that by any measure things are better now than when he (and the Obama Administration generally) came into office.
Was he right that he and Obama inherited a horrid mess from the Bush years? Of course. And without in any way seeking to minimize the extent of the economic foul ups in those years, it could also be said that the eight years under Clinton and his own Treasury Secretary, another Goldman Sachs alum, Robert Rubin, featured the so-called “American Consensus” that added mightily to the mess Geithner and the rest of the Obama economic team inherited. Reagan’s policies were another big factor here, and you could even credibly track the beast back to President Johnson’s guns-and-butter spending.
None of this history, however, amounts to a good excuse of the bungling of Geithner during the almost full year he has helped shape economic policies. Beyond this, to suggest, as Geithner did, that his own culpability for economic matters only began when Obama came into office is not just disingenuous but outright deceitful. He was head of the New York Fed for five of the Bush years during which his predecessor at Treasury, Hank Paulson, was doing his own bungling. Geithner is almost as guilty as Paulson and Bernanke at the Fed for the awful economic nostrums of Bush. Blaming the pre-Obama policies of the Bush team without noting that he was joined with this team at the hip in order to deflect blame from himself doesn’t pass the smell test.
The other part of Geithner’s defensive railing yesterday was even more striking. He actually used the term “by any measure things have improved” to describe what his work at Treasury hath wrought for our present economy. “By any measure.” Think of that. Think of what it means. Because what it means is that the measures he is using to gauge economic improvement are measures that benefit banks and Wall Street.
Yes, bank books have improved because of his policies. Yes, Wall Street has surged back. Yes, the investing community is doing very well again — at least the top tier of that community. By every one of the measures that might make a banker or Goldman Sachs manager happy his work has most certainly improved things.
But his “by any measure” does not include employment. Foreclosures. The economic angst and anguish of most Americans not part of the financial gang.
Tim Geithner isn’t a bad man. Nor was Hank Paulson. Not was Robert Rubin. They are simply, by virtue of who they are, what they’ve always done, who they associate with, part of a community that thinks Main Street exists to service the needs and perks of Wall Street, rather than vice-versa.
Tim Geithner is out of economic touch with most Americans. We need a bigger man with a bigger view for his job. I’d suggest Paul Volcker.