Secretary Geithner's Moment in History

I was in attendance at Tim Geithner's press conference Friday, at which he spoke briefly about the G7 Ministers meeting and answered a few questions. I hope it isn't too damaging to my credibility as an economics writer to say it was the first time I saw the secretary in person. He deviated pretty significantly from the text we'd been given beforehand -- a friend said you could almost see him reading ahead of himself and editing out any potentially newsworthy word or phrase -- but it didn't much affect his delivery, which I found both choppy and deliberative, but quite confident.

I didn't expect him to make news, and in fact he didn't. A few of his statements particularly interested me. He repeatedly reiterated his understanding that a banking fix is crucial to recovery, and that time and again countries have suffered unnecessarily from acting too tentatively to fix their banks. He's clearly not ignorant of the arguments being made by his challengers in the economics and finance press, but he seems to think that Treasury's policy trajectory is sufficient.

Along those lines, when asked whether he was at all concerned about Barney Frank's decision to go slow on a regulatory reform bill that would have included new powers for the government to take complex financial institutions into receivership, Geithner gave a resounding no. Whatever the Treasury's plans for the banking system in the wake of the stress tests, it would not seem to include the possibility of a "traditional" nationalization for a firm like Citigroup (C).

As a newcomer to such proceedings, it was very difficult for me not to stand up and demand of the secretary, "Look, just tell us what you actually think you'll have to do about Citi and Bank of America (BAC). Get real with us for a second. What's the plan! You must have something more than PPIP in the works." But I was able to restrain myself. I was momentarily struck a little woozy contemplating the weight of the responsibility on the secretary, however. The man is at the fulcrum of history, with the fates of hundreds of millions of lives hanging on his decisions. The pressure was almost visible; I could imagine it crumpling him up like a scrap piece of paper.

But it didn't. He bore it remarkably well, speaking and occasionally smiling, and parrying questions from the gathered reporters. After the show, the consensus among the press was pretty clear -- he's a real slick talker. Made me wonder for a minute if Geithner feels the weight of the job at all, or believes himself to be in control of it. I suppose that to function in the face of so daunting a task as his, you have to forget its magnitude and convince yourself you can manage it.

Unjustifed overconfidence is the only way to do the job; to be constantly in tune with the scope of the disaster is to be paralyzed by fear. Forget humility. The humble never dare to take the reins.

Comments

[citypound:]

Geithner's doing his job the best he can and quite well I think and he's in concert with the overall economic plan. Certainly B. Frank or R. Shelby could not do as well, and the great Paul Krugman would simply try to overrule Obama and take us into the wild blue, which maybe right, but not effective.
Seems like he'll lead us into inflation, then handle that as it comes arises.

Apr 26 09:38 AM

[siew_wah:]

I've always got the feeling that Timothy Geithner is the right man in President Obama's Administration to clear the big financial mess left behind by the Bush administration. The results are already showing. Yes, it's Secretary Tim Geithner's moment in history indeed.

Apr 26 10:28 AM

[altaman:]

Geithner's public confidence is a result of hubris, egotism and the knowledge that this buddies in the media are backing the big lies. He has no concern for or interest in the level of destruction that he is causing to important American institutions and principles. His only goal is to remain in the good graces with his patron, by implementing his socialist policies, and that requires that he project a sense of quiet competence in order to keep the sheep calm until they are shorn.

Apr 26 12:20 PM

[yellowhoard:]

This is the blind confidence of a child of life long civil servants who is himself a lifelong civil servant.

He is oblivious to the consequences of his decisions out in the real world.

Mom and dad never suffered the consequences of a recession. And, neither will he.

Apr 26 12:52 PM

[henarl:]

Geithner is a banker and, to him, the world revolves around banks and bankers. As for any possible negative consequences for supporting the banking industry, those are just unimportant collateral damage in his mind. He believes that banks are the indispensible center of the universe and should be afforded the ultimate priority in all considerations.

Apr 26 01:24 PM

[Jasper M:]

"unjustifed overconfidence is the only way to do the job; to be constantly in tune with the scope of the disaster is to be paralyzed by fear."
ExCuse me?!
Military officers are ReQuired to "be constantly in tune" with highly dangerous situations, without paralysis. Military history, going back thousands of years, is filled with men (and a few women) who arguably managed to face fearful truth and retain command of their faculties.
If a banker can only attempt the job with blinders on, then it is time for a non-banker!

Apr 26 04:15 PM

[Glen L.:]

I can't help but be reminded of the smiling, confident, even jaunty demeanor of FDR as he and "the brain trust" made things up as they went along, trying and then abandoning various programs in the New Deal. Nothing they did got us out of the Depression, and now Geithner and Bernanke and the rest of the Obama team are implementing the strategy that the really hardcore Keynesians say FDR should have tried, i.e. maximum stimulus, bank bailouts, etc. They're actually in panic mode, and they have no clue whether the new tricks will work any better than the old. And they're risking America's future in the process. Hubris? I'll say!

Apr 26 06:27 PM

[Speedspirit:]

FDR's plans were instumental to saving our nation. The opposition is what prevented it from having positive effects quicker and then Truman reversed policies and headed the US towards this exact situation of trouble with British bankers.
So if we take your road the world would be owned by the bankers with complete Govt con trol. Just Beautiful. No longer the nation of the Proud and the Brave but the enslaved.


On Apr 26 06:27 PM Glen L. wrote:

> I can't help but be reminded of the smiling, confident, even jaunty
> demeanor of FDR as he and "the brain trust" made things up as they
> went along, trying and then abandoning various programs in the New
> Deal. Nothing they did got us out of the Depression, and now Geithner
> and Bernanke and the rest of the Obama team are implementing the
> strategy that the really hardcore Keynesians say FDR should have
> tried, i.e. maximum stimulus, bank bailouts, etc. They're actually
> in panic mode, and they have no clue whether the new tricks will
> work any better than the old. And they're risking America's future
> in the process. Hubris? I'll say!
>

Apr 26 08:54 PM

[Allan Frain:]

Geithner's confidence stems quite directly from the fact that he has served his masters--The Bankers--quite well.

Apr 27 10:11 AM