Treasury Sec. Tim Geithner, speaking at a Joint Economic Hearing, got into a quite the tizzy with Rep. Kevin Brady (R-TX). On one level, it's just two guys yelling at each other. On another level, it's a glimpse at why an idea as basic as "We should reform our profligate banking system" can break down when you run it through the political sausage factory.
A taste of the skirmish, via Real Time Economics:The GOP and its tempest-in-a-tea-partiers have stoked populist rage at a lot of Big Things, like Big Government and Big Banking, which would lead you to believe that they'd get behind a Big Bill to reform the latter. The only problem is that they still don't trust the former to get it right. As a result, the parts of financial regulation that rely on the government -- like a centralized referee for Tier 1 banks and expanded powers for our constellation of regulatory agencies -- could face stiff opposition from Republicans. Indeed they already have."It is a great privilege to serve this president," Mr. Geithner responded. "I agree with almost nothing you said."
Mr. Geithner then took it a step further: "You gave this president an economy falling off the cliff."
Mr. Brady wasn't done: "Remind me, Mr. Secretary, what post were you holding when President Obama took office?"
Geithner: "I was the President of the Federal Reserve Bank of New York."
Brady then accused him of "shirking responsibility for the design of this bailout."
Mr. Geithner said the government's steps were "absolutely necessary to break the back of this financial panic." He said without the Obama administration's steps, "you would have an economy still falling, not growing."
Brady wasn't done. "The public has lost all confidence in your ability to do the job."
Geithner wasn't done either. "If you look at any measure of confidence in the financial system, it is substantially higher today than when the President of the United States took office."
Brady: "This is your budget! This is your bailout!"
"Time has expired!" Rep. Carolyn Maloney (D., N.Y.) finally shouted to end the exchange. She chairs the panel.
At the same time, the Republican kind of has a point about Geithner's former job. As the president of the Federal Reserve Bank of New York, Geithner was charged with overseeing the stability of our NYC-centric banking system during the very months that the system crumbled. Eliot Spitzner has written, with healthy doses of paranoia, about the New York Fed's cozy relationship with the nation's most powerful investment banks. It will be interesting to see the early polling when the administration tees up financial regulation -- whether the public will doubt the government can reform a system it recently failed to regulate, or whether anger at the banks will unite both Congress and its constituents around a bill.
I think Mr. Geithner is doing a bang-up great job! I hope he never steps down. There are a few (especially Tea Party Texans) who do not understand or have forgotten that we had fallen off a cliff. They forget how bad it was or they have selective memory. I honestly think they have so many double standards they do not know where they stand. The bailout, let us not forget, started under Pres. Bush (I mean Pres. Cheney) and Paulsen. They and Congress thought it was a good idea. The first large sum was never substantiated, had no guidelines, and poofed into the air to Mr. Paulsen's Wall Street friends. This present administration is trying to establish accountability. It is becoming apparent this country has to move on with the regressive party of the Republicans. They are so bi-partisan, but they should watch their backs as the independents are passing them up! Mr. Geithner and Pres. Obama--how blessed we are to have them dedicate their lives to such a mess they inherited. I thank the Lord every day we have them.
Since the economy was saved, some people can't admit how close it was to the edge. I personally feared the return to barter; that's where "let it fail" might eventually have led. But I know that some people will use unpopular (but necessary) government action to fuel the fire of populist unrest. I'm a little sad about that.
Don't confuse "populist unrest" with lack of confidence in the government "fixing" anything. As the author pointed out, Greitner was the head of the NY Fed and never said a word about anything bad until everything went bad. Why trust him now?
I for one have lost confidence in Geithner's ability to do the job. Everything this guy touches falls apart. TARP and Cash4Clunkers have completely backfired (see http://www.repofinder.com). He should pursue a new career as a magician, because he's good at making money disappear.
In my opinion, we had a nasty fire in the kitchen. Instead of putting it out, we closed the door and said "glad that's over with. Now let's watch TV!"
It's still smoldering away in there. I doubt we've seen the last of it.
Balance is the most difficult state for humans to maintain and is only recognized in retrospect. We are so out of kilter as a people, as a society and as a Nation that I can not remember when I last saw any point of balance. mgoodful is as close to the truth as anyone.