Some excerpts from George Stephanopoulos' interview with Tim Geithner, Secretary of the Treasury, on ABC News This Week, 29 March 2009. Try not to choke:
STEPHANOPOULOS: But even if we come out of that, a lot of economists worry that this recovery is going to feel like a recession, that we're going to have a jobless recovery. Very -- I see you nodding your head. You believe that?
GEITHNER: I think a lot -- people worry about this. You have a recession like this, which is born out of a period where people borrowed too much, and we let our financial system take on too much risk. The risk in that conduct is you have a longer, slower, more gradual process of adjustment and recovery.
SO...Mr. Geithner admits that our current economic crisis emerged from an excess of liquidity in the market, as I've discussed at length in this space. What he doesn't explain is how that excess of liquidity was started - by the left-wing social engineers on the Hill.
STEPHANOPOULOS: So do Americans have to get used to the idea that the boom times really aren't coming back?
GEITHNER: Well, we're going to emerge out of this stronger. And we're going to do that because the president and the Congress are going to make sure that we have the government doing a better job of things it needs to do.
So we have a more productive economy in the future, better education outcomes, better health care system, better energy policies, stronger infrastructure.
Mr. Geithner tells us that the Federal government is putting the economy in a headlock and that incomes, education, health care and energy will be rationed.
STEPHANOPOULOS: Stronger, but as affluent as we were in the past?
GEITHNER: Well, you know, we want to have sustainable growth. We don't have -- we don't want to have a recovery which is going to be artificial and short-lived, just produce the seeds of the next crisis.
We want to have a durable recovery based on a stronger foundation that has a stronger, more productive economy emerging through it where the gains are more broadly shared across the economy as a whole.
Remember how Mr. Obama answered Joe the Plumber's question on that campaign trip in Ohio last October, about how he wanted "to make sure that everybody who is behind you, that they've got a chance at success, too…" and "I think when you spread the wealth around, it’s good for everybody"? Remember how everybody on the Left from Joe Biden on down excoriated Joe for daring to ask such an impudent question? Here's Tim Geithner saying that's exactly what Obama's doing.
STEPHANOPOULOS: So income inequality goes down?
GEITHNER: It should go down. Again, you know, if you look at the record of performance in the '90s, you know, we had very strong productivity growth during a period of fiscal discipline, fiscal responsibility, strong private investment, and the gains were shared much more broadly.
We can do that as a country, but it requires getting this government to do a better job of doing things only governments can do. That's why I assume important we get better outcomes. That's why fixing our health care system and get costs growing more slowly is so important. That's why we need a better energy policy. And that's why infrastructure needs to be improved.
Mr. Geithner assures us that income distribution in the Obama administration will flatten, not from a result of making low- and middle-income people more prosperous but by punishing the hell out of people in upper income levels. He also paints a rosy picture of the 1990's under Bill Clinton, who inherited an economy coming out of recession but raised taxes anyway, who didn't face 9/11, the economic shock it administered, the Global War On Terror and multiple natural disasters simultaneously.
Mr. Geithner also repeats his earlier assurance that the Federal government, invested with ultimate national power, will force us into a centralized, planned economy - the "better outcomes" he mentions.
STEPHANOPOULOS: And you are obviously trying to do that with your plans to shore up the banking system. You laid out what to do about these legacy toxic assets in the banking system this week. And a lot of people are wondering, will it actually work? The stock market definitely seemed to like it, so did a lot of experts. As you know, the Nobel Prize-winning economist Paul Krugman was not a fan. And I want to show what he wrote this week in The New York Times.
He said when he read this plan, it gave him a sense of despair. And he went on to say: "Financial executives literally bet their banks on the belief that there was no housing bubble and the related belief that unprecedented levels of household debt were no problem. They lost that bet and no amount of financial hocus-pocus, for that is what the Geithner plan amounts to, will change that fact."
Financial hocus-pocus.
GEITHNER: George, this is a piece of a series of initiatives we've put in place to help get the financial system doing what it needs to do, which is to provide the credit necessary for recovery. You know, economies depend on financial systems. They're what is -- provide the oxygen, the blood that economies need to grow.
STEPHANOPOULOS: But he says it's just not going to work, that these banks are insolvent, and that even if you put more capital in them, eventually you're going to have to take them over.
GEITHNER: But I just wanted to -- let's step back for a sec. So this is piece of a broad framework of initiatives we're undertaking to help restore the strength of the financial system. Part of our plan -- a core part of our plan involves making sure banks have enough capital to provide the lending we're going to need to get recovery back on track.
Mr. Krugman correctly observes that the home mortgage industry and by extension, the American financial system, trusted the Federal government would not allow a collapse of the housing boom they created and were disastrously wrong. Therefore, it's small wonder why American investors distrust anything Washington tells them now. Mr. Geithner answers Mr. Krugman's criticism by saying the Obama administration's answer to the financial crisis, which he already said was the result of too much credit, too much borrowing in years past...is to spur more borrowing. Is there any wonder why so many people - let alone conservatives like me - think Mr. Geithner is simply a fool? How does dumping more liquidity into the market solve the problem when the market is already drowning in liquidity?
GEITHNER: Absolutely. Our obligation now, again, is to defuse and help unwind this deeply complicated problem that AIG presents. But we want to work with the Congress to put in place stronger tools, stronger resolution authority, so the government can come in more quickly, earlier, before things have passed the point of no return, contain the damage, prevent the fire from spreading, restructure the firm, have it emerge stronger, at less risk to the taxpayer. That's what we need. We should have had this before this crisis, but we didn't. But we need to move quickly now.
Secretary Geithner now says that he wants authority not granted him, the Federal government or anyone under the Constitution, authority to regulate, interfere with and assume control of private institutions. Any private institution. If you weren't scared before, you'd better be scared now.
STEPHANOPOULOS: Let's talk about government debt. A lot of Americans more and more are concerned about that. According to the Congressional Budget Office, in 10 years, the government debt will be 82 percent of GDP. And I'm going to read a question that came in from one of our viewers, Bruce Gower of Rock Hill, South Carolina. He asks, "how do you justify printing money out of thin air and the amount of debt you are subjecting future generations to with this budget? Who cares if roads are smoother if I or my children can't afford a car to drive because of the hyperinflation that had taken away all their spending power?"
Are you worried about hyperinflation down the road?
GEITHNER: That's not going to happen in this country, will never happen.
STEPHANOPOULOS: Why?
GEITHNER: Will never happen. Because we have a strong, independent Fed, with a clear authority from the Congress to keep inflation low at -- stable at low levels going forward.
STEPHANOPOULOS: The Fed has been putting so much money into the system.
GEITHNER: But that's not going to create the risk of hyperinflation in the future.
We have a strong independent Federal Reserve with a very strong mandate from the Congress, and they will do what's necessary to keep inflation low and stable over time.
I dare you to name a more asinine Treasury Secretary among Mr. Geithner's 74 predecessors.
He is presiding over the second half of the $700 billion TRAP package approved last Fall, the $787 billion stimulus package, the $1 trillion bank rescue package and Obama's $3.6 trillion FY2010 Federal budget, yet he says that all this spending - the cure for the excessive spending he already blamed for starting the financial mess, mind you - will never cause inflation. That by itself defies logic, but he explains himself by saying that inflation will be strangled by an aggressive, proactive Federal Reserve who "will do what's necessary to keep inflation low and stable over time." Tell us. Mr. Geithner, how does the Federal Reserve plan to do that? How has the Federal Reserve controlled inflation in the past? By increasing interest rates so high that they discourage borrowing. Now I'm just the product of western Indiana public schools but that's just absurd. He admits the financial crisis was caused by too much borrowing but he and His Serene Loftiness want to stimulate more borrowing and then slam the brakes on borrowing. Who besides an economically illterate buffoon proposes an idiotic scheme like this? Imagine Jimmie Johnson flying down the straightaway at Talladega and rather than slowing down into Turn 1 to maintain control, he jams the accellerator to the floor. As his car screams toward the wall and he realizes he's going too fast, Jimmie then decides to plant both feet on the brakes. What would be the likely result of this scenario? The #48 car and Jimmie Johnson smeared all over the track, the wall, the stands and everything else, that's what. God save us from Tim Geithner and his demagogic boss and give us Jack Benny, because he might have made us laugh but he sure took good care of his money.
P.S.
HSL fired the CEO of General Motors today but didn't fire the head of the UAW. What do they call it when the workers own the means of production?
Source: http://abcnews.go.com/ThisWeek/story?id=7201898&page=1
Source: http://abcnews.go.com/Politics/Business/story?id=7206475&page=1
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