Tim Geithner is reportedly considering stepping down after the budget debate ends in the coming weeks. This is one more piece in the long line of President Obama’s failed economic advisors. I’ve been a long-time critic of Geithner. There was little doubt in my mind that he was the exact wrong man for the job when he was appointed. The timeline of my comments on Geithner track his long line of failures:
Obama announced his Treasury Secretary on Friday and the market soared. This removed a certain level of uncertainty in the market and I believe the market is looking forward to seeing anyone besides Paulson at the helm. Unfortunately, Geithner has been involved in many of the horrible decisions that have taken place not only in the last 18 months, but during the last eight years. Like Bernanke, Geithner has no qualms about throwing good money at a dying patient.
Why are the people who played instrumental roles in causing this crisis now trying to fix it? First we had Paulson, former CEO of Goldman Sachs, solving the problem. This man played an instrumental role in turning Wall Street into a casino where debt was the playing chips. Now, we find out this morning, that Tim Geithner is working hard on a new plan to solve the crisis. Geithner, former president of the NY Federal Reserve, was asleep at the wheel as these problems all spiraled out of control in his backyard. Why do we trust him to fix anything when he was arguably a cog in the machine that caused all of this?
This relatively boring hearing suddenly turned exciting when Congressman Kevin Brady asked Tim Geithner to step down. The economic team that President Obama put in place (primarily Geithner and Summers) has been largely responsible for the current predicament. This is not to imply that the Republicans and President Bush did not play an equal (or greater) role in the economic crisis, but it’s truly astonishing that the people who helped cause this crisis are the same ones who are attempting to steer us out of it.
The failure of a strong economic rebound is not only on Obama, in my opinion. It is primarily on his economic advisers – Geithner and Bernanke. Yes, the equity markets have rebounded, but the real economy remains weak and the structural problems that caused the crisis all remain. All he has accomplished is a successful (re)implementation of the policies Greenspan admitted were a failure. He has repeated the policy failures of the past while copying Japan and ignoring Sweden.
But it’s clear Mr. Geithner doesn’t understand how a sovereign issuer of currency in a floating exchange system actually functions. He’s more worried about non-existent bond vigilantes and China as our banker (which they aren’t). Let’s just hope Geithner’s model isn’t as horribly flawed as Mr. Greenspan’s was. Unfortunately, the evidence leads me to believe it might even be worse ….
I’ve been highly critical of Obama’s economic team over the years because many of them were key players in helping cause the financial crisis. Tim Geithner was the head of the NY Fed when the banks were busy turning themselves into casinos.
… Mr. Geithner, who is a disciple of Summers (who was a disciple of Robert Rubin) remains in power and continues to promote similarly misguided policies. The Summers departure is one step in the right direction, however, President Obama is quickly running out of time as he fails to bail out the water that continues to sink this economy.
… Albert Einstein once said the definition of insanity is doing the same thing over and over again while expecting a different result. What is not insane about the current economy being run by Tim Geithner and Ben Bernanke?
He never should have appointed Geithner or Summers. They were merely attempts to rehash the Clinton economic team and unfortunately, due to his ignorance of the economic environment, President Obama had no idea that these men played a significant role in causing the crisis.
The basic message was consistent over the years – it made no sense for the former president of the NY Fed, who helped play a vital role in creating too big to fail, to become the Treasury Secretary of the United States. His track record prior to his role at Treasury was abysmal and his track record afterwards was more of the same. Over his tenure, the US economy has continued to exhibit all the characteristics of the banking behemoth that he helped create. Wall Street recovers and Main Street flounders. And the US economy flounders along with Main Street. Geithner should have never been nominated to this position in the first place. It was, in my opinion, extraordinarily poor judgment on the part of President Obama.
Worst of all, President Obama is not firing him. I think this is another poor judgment call in a long line of bad leadership calls for the President. Ultimately, the nomination of Geithner falls on Obama’s shoulders. His failure is Mr. Obama’s failure. And it’s time for President Obama to stand up and own his failure. But more importantly, it’s time for him to exhibit some leadership qualities.
All great leaders endure hardships. That’s part of the job. But the truly great leaders overcome them by taking a proactive role, accepting the mistake, learning from it and overcoming it. It’s time for President Obama to take the reins, dismiss Geithner (however pleasantly he wants to), take control of this economic environment, own it, build an economic team that actually represents the “change” so many thought they could believe in and send a clear message to the American public that he is trying to give them all the things he promised -- and not more of the same financialized economy we have all come to know and loathe.