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Keating Undresses Geithner

Posted by Larry Doyle on March 9, 2009 12:37 PM |

One of the few countries in the world to escape the worst of this economic tsunami is Australia. I introduced you to former Australian Prime Minister and Treasurer Paul Keating on February 18th in my piece entitled A Fresh and Honest Perspective. Keating was brutally honest in the video clip (thank you SR for providing it!!) included in that article .

I love an honest man!!

Former Australian Prime Minister and Treasurer Paul Keating

Former Australian Prime Minister and Treasurer Paul Keating

Well, Mr. Keating has spoken again and I am listening to him very closely as I strongly believe I am more educated and informed as a result. Our domestic officials and media outlets should take heed.

In an article published in this past Saturday’s Sydney Morning Herald, Obama’s Economic Saviour Savaged as Keating Let’s Rip.  Keating offers a piercing review of then Treasury Officer Geithner’s structuring of an IMF led rescue plan of the Southeast Asian crisis in 1997-98. For those unaware, many countries in SE Asia had massive infusions of foreign capital in the form of debt to facilitate infrastructure development. Geithner and then IMF Chief Michael Camdessus structured a plan that injected $200 billion dollars in the form of IMF loans to refloat the economy. Keating maintains that Geithner and Camdessus totally misdiagnosed the problem and in turn the solution.  

Keating further maintains that the manner in which that package was handled dramatically impacted the way Asian countries have managed their finances since. The massive surpluses emanating from that region have been a major factor in the massive capital inflows into the U.S. over the last ten years. We do not need to replay that disaster.

I sincerely appreciate the integrity displayed by Paul Keating in connecting the dots. 

Those who do not learn from history are doomed to repeat it!!

LD

  • Andy

    Thank LD; I actually lived in Australia while Keating was PM and the country was doing great despite their bad economy prior to his election. He was very respected.

    On a different note/topic; I just heard Barton Biggs who was a guest at Charlie Rose tonight ( the video should be available soon at http://www.charlierose.com ) you should watch it if you can and a heads up
    Charlie Rose will have Geithner tomorrow night (March 10th).

    On the program Rose said that Soros and the Austrians(?) think we
    will enter a period like the 1930’s; do you think they are right?

    Thanks.

  • Larry Doyle

    Andy,

    Thanks for your thoughts about Keating. You are the second person with Australian experience to offer that he was highly respected. I have only read about him over the last month and viewed that 22 minute clip and come away impressed.

    I look forward to the Geithner interview. How I wish Charlie would question him about Keating’s criticisms.

    In regard to the economy, I think Rose is probably referring to those who support the Austrian School of Economics as opposed to Austrian citizens. The Austrian school strikes me as a very libertarian approach. No surprise that with all of this government intervention, they think the economy will actually be worse off than if we just let the market work.

    My opinion and instincts are that we are going to have some very tough times over the next 2-4 yrs and then have low growth for another stretch. Why? The economy needs to readjust back to a period much like in the 80s when we did not have a LOT of easy money promoting growth. The death of the securitization model will severely impact those finance companies that relied upon it.

    I do think our economy has grown and will continue to grow in areas of technology. This sector, which clearly did not exist back in the 30s, will support our economy.

    It will be very interesting.

    Thanks for th elink and the tip about the Geithner interview.

    • Andy

      LD:

      Maybe you can email Charlie Rose the Keating criticisms and some questions??

      They will probably tape the interview earlier though …(?)

  • lizzy

    It’s amazing that we get more information about the records of people in our economy from foreign sources than from our own media. Great article.

    • Larry Doyle

      Lizzy,

      For that very reason I keep my eyes and ears open for those foreign perspectives.

      A link here in the left sidebar, Thought Leaders, links to over 400 foreign newspapers!!






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