Randy Miller

Why Did Geithner Duck the Question?

I like Lindsay Graham because he will put aside ideology and work on pragmatic solutions. Obama is in the same mode. I was watching the hearings and thought it was a gotcha question, a trap. What could he say?
He could have said that "we are rolling the dice that the economy will start turning around in time, and budget deficits will start heading down in time to re instill confidence in the American dollar and treasuries. " Would that have re-assured the bond traders?

Or he could have said, "We probably will not be able to cover all our expenditures with borrowing, in which case we will have to increase the money supply. M1 plus M2 last April was around 7.7 Trillion. We might have to add a trillion" How would the bond traders respond to that?

Or he could say the truth which is "WE DON"T KNOW, but we know the cost of doing nothing, as demonstrated by Bush and Paulsen and Kashkari kicking the can down the road."

The congressman asking the question knew the answer, it is an unspoken truth, but Geithner ducked the question because speaking it would really disrupt the market.

We are all looking into a crystal ball, but that crystal ball has been clouded far more by Wall Street Opacity than Geithner.

I will ask you a question Bruce K. How much taxpayer money went to AIG, and then on to speculators who bought NAKED CDS from AIG? John Paulson turned a $22 million dollar bet into $1 billion when Lehman failed. Who besides AIG had deep enough pockets to cover that bet, with US taxpayer assistance?

You are asking Geithner to predict the future, when most of the financial pundits cannot answer the question on something that has already happened, "Where did the AIG money go, and how much of it was naked CDS?"

And then you can answer the question, "How many Wall Street bankers and hedge fund operators are SPECULATORS, and how many are really investors, trying to build long term strength in our companies and economy."

I agree with the posters who say Geithner is a weak communicator. As was Henry Paulsen. He needs to speak more persuasively, or take more of a behind the scenes role.