Geithner-Krugman Feud Comes To A Head On Sunday Shows (VIDEO)

The high-profile policy duel between Tim Geithner and Paul Krugman came to a head on Sunday. Following the Treasury Secretary's appearance on ABC's "This Week (read/watch that interview here), Krugman participated in the panel session and made clear that he hadn't yet been convinced.

"It's a plan to rearrange the deck chairs and hope that that keeps us from hitting the iceberg," the Nobel Prize-winning economist said of Geithner's bank plan. "They've done some things very fast, but they've been very small things ... There's no way this could be enough."

Watch:

On "Meet the Press," Geithner was asked to respond to the critiques Krugman has written about Treasury's financial rescue proposal. Geithner defended the bad assets buying plan, which Krugman called "trash for cash," arguing that it was a "critical" part of the administration plan. He asserted that the alternatives were worse. "Life is about choices, about alternatives," the Treasury Secretary said. "This is a better way to help get the markets working again."

"The investors' money is at risk. They can lose all their money. Now, again, you have to compare these to the alternatives. The alternative scheme, the government in our view, will be taking on much more risk. The taxpayer will be much more exposed to losses. Life is about choices, about alternatives. This is a better way to help get the markets working again. ... What we're trying to do is get the entire financial system, our complicated system, working again so that we get credit where it needs to go in the economy and that requires strengthening our banking system. It requires making sure there's enough capital to withstand a deeper recession, and we're going to make sure that capital comes with conditions to make sure banks restructure, that there's accountability for management, that the firms emerge stronger not weaker, and there are tough conditions to protect the taxpayer. ... This is not going to solve our problems, but it is a critical part of the solution and we think it's the best approach to protect the taxpayer and make sure that the market is working with us."

In order to bring confidence back to the markets, Geithner added, the rules of the program "cannot change."

Watch:

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Comments

[delta7777]

02:53 AM on 04/09/2009

Maybe Geithner should have Krugman and all other voices in opposition sent to Gitmo, or maybe extraordinary rendition to some friendly fourth world middle eastern fiefdom where they can be schooled to keep their mouths shut......like any civilized country handles dissenters...there must still be some open lines of communication for this left by the former administration.

[AnnfromCA]

04:59 PM on 04/08/2009

Teaparties over the stimulus and budget, which the G-20 also laughed at, are "silly." Krugman gets play?

Nuts.

[PhilipTaylor]

10:55 AM on 04/01/2009

$7 Million to EVERY AMERICAN FAMILY!



$700 Trillion IN TOXIC PAPER Created by Banks is $7 Million to every Family in AMERICA!

$700,000,000,000,000 / 100,000,000 Families = $7,000,000

$7,000,000 to every family in America! That is what the BANKS DID TO US! JAIL THEM TOMORROW!




Instead they are REWARDING THEM!
________________________________

Wish it was WRONG!

$1.2 Quadrillion of Toxic Paper in the World

$700 Trillion created by American Banks!

http://financialclues.blogspot.com/2008/02/1-quadrillion-problem.html
__________________________________

CORPORATE AMERICA HAS BEEN SKIMMED TO THE BONE!

The SKIMMING of AMERICAN CORPORATE WEALTH by Executives, Managers, Sales Staff, Analysts, and others into employee pockets has left America with weak "Ghost" Corporations that can NOT survive even moderate Economic Downturns without robbing the Taxpayer!

"Wall Street/Corporate CUT-THROAT Culture" has been taken to its rightful conclusion and a NEW Culture will Emerge. One more balanced with the rest of America, more just, less dependent on the Taxpayer, more able to survive, accountable to Americans and their Government, and able to make and keep its profits.

[Paladin2]

03:27 AM on 04/01/2009

Our large middle class was largely the product of WW2 and because most of the world was in ashes the U.S. was king of the hill. Before that war something like only 40% of homes even had telephones. Most people were what today would be considered poor. Willful ignorance had bred a population that believed they could buy and sell each others houses for ever increasing amounts with money borrowed from the Chinese and assorted similiar fantasies engineered by these same 'experts' everyone's going to for advice and our 'leaders' are lining up to repay them the millions they owe for all that help Wall Street gave them to sell you a lie. That the Chinese could collapse the U.S. in a single day is a total loss of sovereignty brought to you by both the Democratic and Republican parties. The U.S. is bankrupt folks. The smoke and mirror numbers these criminals are tossing around are pretty much meaningless and just one more little piece of straw is going to break the camels back. That's when the real show will begin.

[walk0nwalls]

02:28 AM on 04/01/2009

Just change the rules and make clear what the new rules are.

How difficult is it?

[ScreenName05]

06:56 PM on 03/31/2009

I really don't trust economists anymore, especially when they are political hacks in disguise. Everyone take notice that the Japanese economy is still there, it is now growing. We however are stuck in a downward cycle created by 40 years of wealth distribution away from the middle class consumer. Guess what, without jobs and no growth for the middle class consumer, we just keep going down. That is what Japan saw, and why they propped up their economy for ten years as they gave their economy a chance to recover. We are in the same position only ten times worse. We had better hope we can survive, just like the Japanese did, until the economy turns around - likely twenty years from now. Stop looking for an instant return to DOW 14,000, it isn't going to happen. Start looking for a way to stop the loss of jobs and the downward spiral that comes with it. It is not just the banks. No matter what we do for the banks it will not stop the downward spiral of job losses. But the banks still have to be there when we do recover, that is why most of what Krugman and others are saying is such a load of B**l S**t. They want to find some way to hike up the DOW as the solution to the problem. Won't work! You have to solve the real problem this time or get ready to live in abject poverty.

[RenePA]

07:22 PM on 03/31/2009

Abject poverty is livable, actually. Providing you own a piece of land.

Did you know, the original words were ".. Life, Liberty, and the Pursuit of Land" ?

"Land," obviously, was changed to Happiness. Kinda the same thing, though, isn't it? And very interesting how this "economic crises" revolves, in many ways, around this crux.

At the end of this fiasco, (let's not talk of blame, just accept it as fiasco), who will be the people with land, and who will be the people without land? And how will those two types of people discuss what Happiness means?

[RenePA]

10:36 PM on 03/31/2009

Oops, sorry.. NOT puruit of Land.. It was pursuit of Property.

I made that Land in my head.

My bad

[polysci101]

10:36 PM on 03/31/2009

Abject poverty is livable? What? Provided you own land? That makes no sense.

[tabatha]

01:44 AM on 04/01/2009

um, Japan lauguished for 10 years...its 'lost decade', because it took Japan 10 yrs to bite the bullet
and nationalize its sick banks....it kept giving them money, more and more money, but that's not the solution...only complete nationalization is, as Japan learned

have we learned from their experience? nope, and Japan is aghast at our stupidity

[yellowdogdemocratic]

11:43 AM on 04/01/2009

And while we are pooring money into these banks, they are still giving out bonuses, planning million plus dollar parties, etc... Something is terribly wrong here. The banks can't be trusted to do what is best for the country. They just want to continue their own high standard of living. I think you are right - the banks need to be nationalized. But, if we did this, everyone would have a temper tantrum and start squealing that Obama is taking us into socialism. Decisions are being made using very bad logic. We should be focused on solving the problem, period, not passifying everyone's political agenda. Like I said the other day, Canada is looking better all of the time.

[RenePA]

06:30 PM on 03/31/2009

The problem is there are no graphs.

I need a graph. I need to see numbers, probabilities, dollars and years in some kind of picture. That's right. I want newsworthy, roundtable discussions with PICTURES. And then I want someone, say - a talking head, to explain what the heck it's all about and why it is or isn't important.

I want to see CNN's immense Wonderscreen put to use to explain the various plans and facets of plans.

We need to revert to picture books/graphs. Rhetoric is just Waa, wa-wa, wa, waaa ... kinda like Charlie Brown's teacher.

While I'm demanding things, I want the Wonderscreen graph to show If This-Then That scenarios.

It's ridiculous that grown adults all try to discuss rhetorical policies with regard to budgeting as if policies are any kind of fact, logic, or number.

Bah.

Bring me back to grammer school ... with picture book graphs THEN talk to me. Bring me a short bus, too, if you want to. Apparently I need one.

[ScreenName05]

07:03 PM on 03/31/2009

You are right of course. Graphs would show we are on the precipice of a very deep hole and leaning over. Graphs would stop all the idiots from arguing. If we had pictures we could show the 40 million Americans, who are tied to the rest of us, and who have fallen over the precipice and are dragging us with them - for example all of those who suffered foreclosure and destroyed their neighborhoods with abandoned houses. Maybe then we would stop all the stupid arguments and pull together on that rope a little harder so that we all don't go over into the pit of poverty.

[JohnSawyer]

06:18 AM on 04/01/2009

Yeah, but there are also lies, damn lies, and statistics.

[kashifsaeed28]

04:27 PM on 03/31/2009

As I said before, Githner is Geithner's biggest enemy.

My blog:
http://project-you-are-not-alone.blogspot.com

[PoliticalAmazon]

07:57 PM on 03/31/2009

Krugman is also Krugman's worst enemy. Everybody else thinks he's an a$$hat.

[derekc06]

03:59 PM on 03/31/2009

rarely do i ever see any real compromise or collaboration or debate of the facts... people come to the table with their minds already completely made up and spend their time attacking while simply deflecting criticism...

who knows if i made any sense there...

[JohnSawyer]

06:23 AM on 04/01/2009

Perfect, unalloyed sense.

[AnnfromCA]

04:53 PM on 04/08/2009

Sure you do. But all of the communications media is in an uproar right now.

[derekc06]

03:57 PM on 03/31/2009

doesn't sound to me like geithner really addressed krugman's criticisms... sounds to me like he just talked about choices (i don't know why) and said his was a better one...

that sure is constructive...

my problem with *these* people is that they are always too afraid to make any sort of concessions (for fear of losing credibility maybe?) and, even when they say that they're open to other opinions, they dismiss them and simply say that theirs is better...

[AnnfromCA]

04:56 PM on 04/08/2009

If every government critic received a thorough response, we'd have no government.

Krugman is attacking Obama.

He's nothing more than a columnist.

That's his job.

But Geithner has obvious deep disagreements about basic assumptions and approaches.

obama chose geithner's approach.

I really don't see that Geithner "owes" Krugman an explanation.

Everyone pretty much agreed that nobody knew what to do. We threw the dart.

We're either comitted to Obama's plan or not.

[sposton]

03:51 PM on 03/31/2009

It makes no difference what we say and whom we believe. We exist for the benefit of the banks (and Wall Street in general) and not the other way around. Until we change this around they will do whatever they wish. Who is the presidents seems to be utterly irrelevant. All this talk is the evidence that they still let us exercise the freedom of speech but our democracy is long gone. Unless we make a concerted attempt at reclaiming it, it ain't coming back either. Our economy is tanking but even more importantly our democracy is tanking right along. Continue on this road and they will eventually pull the plug on the freedom of speech as well. This is not likely to end well for us.

[mcjorich]

03:39 PM on 03/31/2009

Geithner's idea is to play nice with the rapaciously greedy crowd on Wall St to entice them back into the markets? The government (we) own them. Stop being nice already. Stop throwing money into the endless black sh*t-hole of AIG, Citi, BOA, etc. It should be obvious to everyone by now, they are failed industries. They are over-leveraged to the tune of $-trillions, that is plural (many trillions), there is no reality based way to save them. They could float for awhile on the delusional raft of solvency as our dollar floats on the delusion that it is worth more than 3-cents, but eventually reality will set in.

Rather than the government trying to set an artificial floor on toxic assets, on housing, creating another toxic bubble, they need to be dismantled, sold off in pieces and whatever money is recouped returned to government (taxpayers). Some banks and investment houses will not fail, the prudent cautious ones will continue, enough of them to handle the decreased amount of commerce and business. REALITY CHECK, allow them to fail, they deserve it.

Just a View from My Trailer Park, thank you.
MJ Richards

[Elephantinroom]

10:22 PM on 03/31/2009

I agree with everything you said. Sadly, I'm beginning to think the
bailouts were just to keep the PAC money available.

[DrVeruju]

01:05 AM on 04/01/2009

The bailout is just keeping the fraud going.

Check out http://www.worldreports.org/news

[telstar]

01:50 PM on 03/31/2009

Maybe there's a bit of Ivy rivalry. Summers is a player; Krugman is fast becoming a pundit. America lost credibility in the world long before the economic crash. We have Bush to thank for that.

[tabatha]

01:46 AM on 04/01/2009

Krugman fast becoming a pundit?

where have you been for the past 10 years?

He's been a ny times columnist and based Bush for the past 8 yrs.....

and Krugman provides detailed info and solutions on his daily ny times blog

[Donatella]

12:34 PM on 03/31/2009

Why do they label this as a feud? It’s not, it’s a policy difference. On one side you have Geithner who is not an economist by training; his academic background is in international affairs. He worked for Kissinger Associates and was a protégé of Rubin and Summers, the guys who were responsible for the policies that got us into this mess in the first place and who have strong ties to Wall Street plutocrats. On the other side you have Krugman, a trained Nobel Prize winning economist who is not beholden to any financial interest on Wall Street.

So who has the credibility? Who do you think will put the country’s interest first before moneyed elite on Wall Street?

[lafemme]

01:40 PM on 03/31/2009

Well said. I don't mind the Geithners, Rubins and Greenspans advising on how we got ourselves into the mess; I just don't think they're the best brains to get us out given their complicity in that anti-regulatory age.

[CaptD]

11:55 AM on 03/31/2009

Krugman's cute sayings "made for prime time headlines" will not solve our financial problems; Geithner just needs some help in Congress (and Wall Street) to get it moving again! I'm tired of "foot draggers" whining about "everything" while out debt gets larger daily, thanks to them... it is like the Rich/Greedy want things to get worse so that they will become even more Wealthy and report on it!

[madashellvoter]

02:28 PM on 03/31/2009

I believe Krugman's advise more than Geithner’s and his fellow protégé's Rubin and Summers. Geithner is educated as a financer, and Krugman as an economist.

Look, Rubin is drowning in what he’s created, for the last 15 years as Treasury Secretary and also head of Citi Group. Doesn’t that say it all?