Tim Geithner: “It’s Going To Feel Very Hard…”
Posted by Larry Doyle on July 11, 2011 9:48 AM |
For those who missed Meet the Press yesterday, please allow me to share a portion of the interview NBC’s David Gregory had with Treasury Secretary Tim Geithner. Please allow me to interject my ‘sense on cents’ analysis as well.
SEC’Y GEITHNER: We still have millions and millions of Americans out of work, and the most important thing we can do is to make sure we’re taking steps to get people back to work as quickly as we can.
MR. GREGORY: Well, let me ask you this. The president was asked in his Twitter town hall about the economy and whether mistakes were made. And I want to share a portion of what he said.
PRES. OBAMA: So I think people may not have been prepared for how long this was going to take and why we were going to have to make some very difficult decisions and choices. And, and I take responsibility for that because, you know, setting people’s expectations is part of how you end up being able to respond well.
I am glad Barack may be willing to accept responsibility now because I firmly believe people’s expectations have been very poorly handled. Why? How so? Because both sides of the aisle in Washington have elevated the obfuscation of truth and transparency to an absolute art form. Is there any doubt that our political leaders are more interested in gaining power and leverage than being honest with the American public? I have no doubt.
MR. GREGORY: How did the president not prepare the American people well enough? You’re his top economic adviser, Larry Summers was there. Did you guys get it wrong? Did you not tell him how bad it was?
Geithner and Summers knew all too well how deep the problems ran and still run. Righly or wrongly, their focus has been on saving the financial system and institutions as a precursor to saving the economy. Please review my weekend commentary focused on Sheila Bair for more on this.
SEC’Y GEITHNER: I think he’s being too hard on himself, David. I think everybody understood, and we were very careful in the beginning to make sure people understood how grave this was and how difficult it was going to be to fix.
Challenge!! He may have shared that with his friends in Washington BUT he did not come straight with the American people because he was afraid to further spook the public’s confidence.
Remember all the talk about ‘green shoots’ and how housing was turning and so much other bulls*&t!! When you are not honest, you lose credibility. With lessened credibility, investors take their ball/capital and go home. They have. (People may recall when Chinese students openly laughed at a Geithner public performance in that nation.)
SEC’Y GEITHNER: You know, this took a long time to build up, the problems that caused the crisis. It’s going to take time to fix. Just think of it this way. This was a crisis caused in part because Americans borrowed too much, banks took on too much risk. They–we built too many homes, more than we could afford. We were living beyond our means for a long period of time. And part of what makes this so hard, part of what makes the recovery slower is because people are going back to living within their means. They’re spending less of their share of income, they’re saving more. And we don’t have the ability, because of the overhang in housing and the problems in the financial system, to do–to engineer artificially…
MR. GREGORY: So in other words it’s unfair to demand…
SEC’Y GEITHNER: …a stronger recovery.
Is that what we have come to expect? Our financial leaders should be focused on artificially engineering a recovery?
MR. GREGORY: …accountability for this president and this administration for the, the fate of the economy?
SEC’Y GEITHNER: No, no. Of course. The–ultimately presidents are judged on…
MR. GREGORY: Right. OK, but Mr. Secretary, if that’s the case, look, you guys have had some big swings at the plate. You had stimulus, right? We were told that was going to keep unemployment to 8 percent. You had health care. You said it was critical to our economic security. The Fed did its thing before it backed out. You went after housing policy. None of them have really stemmed the tide, the decline in the housing market.
SEC’Y GEITHNER: I, I told you yesterday that the–let me stop you there again.
MR. GREGORY: Yeah.
SEC’Y GEITHNER: The American economy was falling off the cliff in the fall of ’08 and the first months of his administration. And he put in place the most creative, the most forceful set of economic measures we have ever done as a country. And because of that, we’ve prevented a second Great Depression and the economy has now been growing for more than a year and a half, more than two million jobs in the private sector since job creation started again. Faster job creation than the last two recoveries. Now, things are very hard still, and we’re not growing fast enough, and the president of the United States is going to keep at it to make sure that every day we’re looking for more opportunities to get the economy moving again faster. But he can’t do that alone. It does require Congress, under our Constitution, to be willing to legislate things that would help. Like, for example–and you, you know these examples–if we could pass some trade agreements to expand export growth, that would be good. If we could find ways to help rebuild America, we can put more people back to work. If we can figure out ways right now to extend these tax benefits for 98 percent of working families, that will help for confidence.
Come on, the stimulus was a ‘sugar high’ that had little long lasting impact.
MR. GREGORY: When do you think recovery is actually going to start feeling like recovery?
SEC’Y GEITHNER: Oh, I think it’s going to take a long time still. This is a very tough economy. And I think for a lot of people…
MR. GREGORY: Yeah.
SEC’Y GEITHNER: …it’s going to be–it’s going to feel very hard, harder than anything they’ve experienced in their lifetime now, for some time to come. And that–but that is because that is the tragic effects of a crisis this deep and this bad caused by a long period of lost opportunities to do things to make the country stronger.
At long last, the truth. A ‘walking pneumonia’ economy is hard. Very hard.
Why now? Why does Geithner now make this statement? Why is it that virtually no mainstream media outlets have carried Geithner’s bombshell? Does Tim Geithner want to be able to say, ” I told you” before he hits the road out of Washington?
Speaking of which, aside from Geithner, who currently makes up the Obama economic team? Can you name one credible individual? Who is on the Obama economic bench?
America deserves the truth at every turn. The fact that we do not receive it is a failure both within our political system and also our media, although David Gregory does deserve props for this interview.
Please get your friends, family, and colleagues to do the same. Thanks!!
I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets, our economy, and our political realm so that meaningful investor confidence and investor protection can be achieved.
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