Economic Architect

Monday, March 15, 2010

Joshua Green, Senior Editor of The Atlantic, and John Cassidy,New Yorker staff writer, talk about Timothy Geithner’s role as chief architect of Obama’s plan to fix the economy, and why his plan has made him unpopular. Joshua Green’s article “Inside Man” appears in the April issue of The Atlantic, and John Cassidy’s article “No Credit” is in the March 15th issue of New Yorker.


John Cassidy and Joshua Green

Comments [11]

Peter Talbot from Harrison, NJ

Thanks to Messrs Green and Cassidy for some precise points, but seems they skirted the real issue when speaking about Mr. Geitner's early apprenticeship at Kissinger consulting on the Asia desk:

What Geitner and the entire Treasury Dept know that the rest of the USA politicos and public hasn't realized is that the connection between US Sovereignty and its Currency has been irreparably severed by the uncontrolled "free market" capital grab saluted by Paulsen, Greenspan and much of Wall Street. When AIG became the protected plaything of the US House of Representatives, it's ability to grant insurance took the form of US legal tender, and all derivatives issued on the back of Moody/S&P ratings to international governments and private investors essentially served as cash notes. Failure to preserve liquidity POTENTIALLY meant that the US GOVERNMENT would have to "mark to market" and admit that it had abused both it's governmental responsibilities vis a vis credit and derivatives and it's default on current obligations by allowing international liens against the earnings of the unborn future generations. If this had happened, the US stock market would have been the least of our problems. The ultimate result could have been, and still could be, global war.

The growing tension with China is ten times the economic threat of any bank re-regulation scheme.

Oh, and by the way, Obama hasn't served as the populist avenger of the public trust because (a) he can't without risking world conflict and depression in America's dependent state and (b) he is not overly fond of the counterfeiting on the US' name that the Treasury Dept and the Fed have practiced through their "inside" positions for the past twenty years. The fact is that the USA cannot afford to have an international military presence and watch it's dollars hyper-inflate, which was and still is the likely affect of honest re-regulation and the closure of AIG.

Mar. 15 2010 01:28 PM
Amy from Manhattan

How much is understaffing in the Treasury (& other depts.) a result of Republican delay in confirming candidates? Is this something Democrats could cite in response to accusations that they haven't gotten enough done in this & other areas?

Mar. 15 2010 12:33 PM
Nico from Crown Heights

As Sophia (#5) asks, wasn't this supposed to be a "debate"? Instead, we have two authors of (suspiciously timed) pro-Geithner hagiographies. I just canceled my subscription to the New Yorker. The failure of the business press to ask tough questions was a critical factor in getting us into this mess. It's not unlike the uncritical reporting that led us into Iraq.

Mar. 15 2010 12:29 PM
Calder from UES

Any mention of getting help for Timothy Geithner? His department was severely understaffed from what I remember, due to nomindations that were help up...and no news since about that.

Mar. 15 2010 12:23 PM
Nico from Crown Heights

How can your guests be arguing that Geithner has "contained" the financial crisis? What about the vast "shadow economy" and "off-balance sheet" accounting of the big banks? And Geithner's actions at the NY Fed and as Treasury Secretary have only made too big to fail banks BIGGER. Finally, what about the Lehman accounting scandal? He oversaw this as Pres. of the NY Fed -- even though he denies having any experience as a "regulator."

Mar. 15 2010 12:21 PM
josh karan from Washington Heights Manhattan

Your quest said that Geithner's; plan successfully attracted private capital, which stabilized the financial system, and made the banks profitable.

Is not their profitability based on having access to trillions of interest free federal money from the Federal Reserve, which was then invested in Treasury bonds &/or lent out at rates many points higher than zero?

Mar. 15 2010 12:20 PM
sophia canellos from new rochelle

I thought this was supposed to be a debate about Geithner? These two seem to be pro-Geithner.

The banks haven't been socialized, the govt has been privatized.

The private debt has simply been transferred to a public debt, and the "stress-tests" were phony. They were designed to be almost impossible to fail. The cost of the bailout has been hidden in many different ways not accounted for by the guests.

Keeping Geithner was popular politically and bad economically, unlike the speakers claims. It was popular for Wall St/aka the big donors, and terrible economically.

The meltdown wouldn't have happened if Geithner had been doing his job at the NY Fed. He's failed upward in order to protect the big donors and prevent real regulation and real consequences for the big banks.

His "plan" to unwind the big banks should they fail, is simply a plan to conduct future bailouts without even being bothered to go through Congress.

Mar. 15 2010 12:20 PM
John from The Bronx

I know this maybe a weird question. But is Obama good communicator? He gives great speeches, but they don't seem to move policy as effectively as they should.

Mar. 15 2010 12:19 PM
Tony from Santa Clara, CA

Well, he's also a tax cheat... that doesn't inspire confidence, when he's leading the IRS

Mar. 15 2010 12:19 PM
Hugh Sansom from Brooklyn NY

I think that another thing that goes to the general hostility to Timothy Geithner (and Ben Bernanke and Obama) is the continuing insistence on secrecy.

Geithner and Bernanke have repeatedly refused to reveal the content of promises made to Wall Street and to whom those promises were made.

Moreover, we now know that Geithner has been exceedingly buddy-buddy with Wall Street executives. This — coupled with Obama's heavy dependence on Wall Street money in his campaign and his near-total exclusion of labor, single-payer advocates and many representatives of the general populace — have left people understandably enraged.

Mar. 15 2010 12:13 PM
Mike from Queens

Did you get any insights on Geithner deals with his counterparts overseas? There is an article in today's Washington Post entitled:

"U.S., Europe at odds over global financial reform"

By Howard Schneider and David Cho
Washington Post Foreign Service
Saturday, March 13, 2010

The article highlights points of agreement and disagreement.

Mar. 15 2010 11:55 AM

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