Geithner's 'Comprehensive' Attack

By: Gary Tanashian | Tue, Feb 10, 2009
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Excerpts from Tim Geithner's "comprehensive" attack were released this morning per this Bloomberg article.

TG: will "cost money, involve risk and take time."

Me: ...and ultimately fail.

TG: "The financial system is working against recovery, and that's the dangerous dynamic we need to change,"

Me: The financial system is repudiating the decades of ill-conceived monetary and credit policy that your predecessors have stuffed down its gullet. Do you really think more of the same will work for anything but short term gain, mostly political?

TG: "Without credit, economies cannot grow, and right now, critical parts of our financial system are damaged."

Me: Keynes' playbook predates West Coast offense. The best players see it coming a mile away.

TG: "It is essential for every American to understand that the battle for economic recovery must be fought on two fronts," Geithner said in the excerpted remarks. "We have to both jumpstart job creation and private investment, and we must get credit flowing again to businesses and families."

Me: What I understand is that you guys screwed up my country, which used to depend on things called productivity and value added. What I understand is that recessions were once upon a time very necessary corrective mechanisms for healthy economies that got overheated, but are now, due to economic meddling and remote management and the moral hazards therein, time bombs that we must do "battle" with. You may well engineer a recovery of some sort, but at what cost? Hyperinflation? Great.

TG: "The American people have lost faith in the leaders of our financial institutions"

Me: Yup, and that ain't all they've lost faith in.

TG: "In our financial system, 40 percent of consumer lending has historically been available because people buy loans, put them together and sell them," Geithner said. "Because this vital source of lending has frozen up, no plan will be successful unless it helps restart securitization markets for sound loans made to consumers and businesses -- large and small."

Me: See how complex micro-management can be? Used to be a time company A made widget B and sold it to consumer C who, himself had the money to buy because of his productive job supplying necessary service D to...

Mr. Obama: "We don't know yet whether we're going to need additional money or how much additional money we'll need until we've seen how successful we are at restoring a sense of confidence in the marketplace."

Me: Mr. President, I like you a lot. I really do. You are dignified and charismatic and I have confidence in your ability to discern and delegate in search of the truth. But you are aligning your economic policy with what we call Keynesian economists like Paul Krugman and Robert Reich, and what these people are selling, the financial system is not buying. At least not in the long term. Then again, 'in the long term, we're all dead', right? Good luck Mr. President; to all of us.



Gary Tanashian

Author: Gary Tanashian

Gary Tanashian

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