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Posted by on Nov 20, 2009 in At TMV | 7 comments

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.

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  • DLS

    I suspect Joe Windish would vote for Elizabeth Warren to replace pretty-boy Geithner (rival of pretty-boy Obama for Looking Good as too often the most these folks are doing).

    Warren carries yucky lefty political baggage with her, and would politicize the job, but so have many Obama team members, anyway, in their jobs, and Warren has won points from the rest of us anyway in cutting through Geithner’s and Treasury’s BS in the past, such as with TARP money use and antics at places like General Motors and Chrysler.

    • Don Quijote

      Warren carries yucky lefty political baggage with her, and would politicize the job, but so have many Obama team members, anyway, in their jobs,


      You do understand that being Secretary of the Treasury is a political job, it cannot be politicized any more than it already is…

  • DLS

    “I’d suggest Paul Volcker.”

    Agreed wholeheartedly. In addition to everything else, he has on his record breaking the back of inflation and helping dig us out of the earlier deep recession. (As a bonus, he hopefully would be at the forefront of resisting any impulse the lefties might have to use inflation as their next political-economic and vote-buying tool.)

  • spirasol

    You know I get so tired of your lefty bashing……….especially as just a silly entre’ — nobody has the whole deckWHO would you put in place MR. got-a-handle-on-it-all……………WHO would serve your interests? For myself, and so many others, Warren is a Goddess who should be promoted to overseer the entire debacle but this time with more power to represent us………….US, being the middle and lower classes of this rapidly deteriorating wonderful country.

  • DLS

    “WHO would you put in place, Mr. [Overdue Reason]”

    Well, in addition to whining, you did ask a question — but I answered it already, if you had chosen to read: Volcker. I’d even take a risk on Warren, maybe, if I were confident she’d seek better goals like transparency and ethical reform rather than extremist Naderite stuff as was advocated earlier today.

  • sparkles43

    What Geithner Got Right
    Published: November 19, 2009

    Well, the evidence of the past eight months suggests that Geithner was mostly right and his critics were mostly wrong. The financial sector is in much better shape than it was then. TARP money is being repaid, and the debate now is what to do with the billions that were never needed. It now seems clear that nationalization would have been an unnecessary mistake — potentially expensive and dangerously disruptive.

    The course of events has vindicated the administration’s handling of its first big challenge. Obama could have flinched when the torrent of criticism was at its peak. But the president’s support for Geithner never wavered. Geithner never lost confidence in his policy. Rahm Emanuel mobilized to improve the presentation of the policy. The political team worked hard to deflect criticism from Geithner onto themselves.

    In retrospect, their performance during this trial was impressive.

    If you wanted to step back and define Geithner’s philosophy, you’d probably say that he starts with a set of fairly conservative instincts about the role of government, which put him on the centrist edge of the Democratic Party.

    Some administrations are staffed by hedgehogs, who are guided by a few core principles. But this one is staffed by foxes, who respond flexibly to situations. In the administration’s first big test, that sort of pragmatism paid off.

  • DLS

    I also like Peter Morici, who has been a good critic from the “safe and sane” Dem side. (In fact, he would be a good addition to Obama’s economic team as well as Volcker. But, they won’t bring aboard someone who is not only knowledgeable, but also honest, pegging Geithner as well as Obama as having shown us little more so far than they can look good, dress up and resemble serious public officials…)

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