Geithner Gets 'Existential' On Financial Reform

What a difference a year makes.

Treasury Secretary Timothy Geithner, according to Noam Scheiber in New Republic, has completed his journey from "the administration's most controversy-prone member" to the "surprising survivor" of Obama's economic team. (In a recent New York Times profile, Geithner was called the the administration's economic "anchor."

Geithner is taking the lead on many of the administration's foremost financial agendas: reforming Fannie and Freddie, pressuring Republicans to raise the debt limit, and rewriting corporate tax rules.

But Noam Scheiber's lengthy new profile of Geithner suggests he won't be the man to drastically transform the financial landscape in the hopes of preventing future financial crises.

When Scheiber asked Geithner if he had "vision for the postcrisis landscape--for, say, a less bloated financial sector with a smaller role in the economy--and a map for how to get there" Geithner response was: "We're going, like, existential." Then he laid out his thoughts on financial regulation:

"I don't have any enthusiasm for ... trying to shrink the relative importance of the financial system in our economy as a test of reform, because we have to think about the fact that we operate in the broader world," he said. "It's the same thing for Microsoft or anything else. We want U.S. firms to benefit from that." He continued: "Now financial firms are different because of the risk, but you can contain that through regulation." This was the purpose of the recent financial reform, he said. In effect, Geithner was arguing that we should be as comfortable linking the fate of our economy to Wall Street as to automakers or Silicon Valley.

One can disagree with this substantively. Financial reform is a good start, with its stricter rules and new authority for regulators. But whether Wall Street can be made to behave like a normal industry rather than a source of economy-wide instability remains very much open to debate."

Geithner's perspective here does not bode well for the end of "too big to fail" financial firms. As the Huffington Post's Shahien Nasiripour reported in January, trillion dollar banks could actually get bigger under the administration's financial overhaul law.

In documents revealed by the Financial Crisis Inquiry Commission last week, it was revealed that legendary investor Warren Buffett told the panel that it could never fix the problem of "too big to fail."

Read the full profile of Geithner at the New Republic.

Comments

[AZreb]

09:53 AM on 03/25/2011

Inundated with articles featuring Geithner! His policies and programs have been unsuccessful up to this point (except for aiding and abetting the financial institutions) and now we are reading more and more of his "pie in the sky" opinions and plans?

What a joke - is the administration putting Geithner out there as point-man to see which way the wind blows? Guess what - hurricane on the horizon!

[PotomacOracle]

10:11 PM on 03/19/2011

Geithner's one world currency scheme.

By Ellen Brown

http://www.globalresearch.ca/index.php?context=va&aid=23762

"In early April 2009, the mark-to-market rule was finally softened by the FASB; but critics said the modification did not go far enough, and it was done in response to pressure from Geithner, politicians and bankers, not out of any fundamental change of heart or policies by the BIS or the FASB. Indeed, the BIS was warned as early as 2001 that its Basel II proposal was “procyclical,” in a downturn it would only serve to make matters worse. In a formal response to a Request for Comments by the Basel Committee for Banking Supervision, a group of economists stated

Value-at-Risk can destabilize an economy and induce crashes when they would not otherwise occur. Perhaps our most serious concern is that these proposals, taken altogether, will enhance both the procyclicality of regulation and the susceptibility of the financial system to systemic crises, thus negating the central purpose of the whole exercise. Reconsider before it is too late.[17]

The BIS did not reconsider, however, even after seeing the devastation its regulations had caused; and that is where the conspiracy theorists came in. Why did the BIS sit idly by, they asked, as the global economy came crashing down? Was the goal to create so much economic havoc that the world would rush with relief into the waiting arms of a global economic policeman with its privately-created global currency?"

[Paul Sta]

10:15 AM on 03/01/2011

Isn't it time for Timmy to leave his post, for a position at Goldman Sachs yet?

[Its-All-Good]

03:30 PM on 02/16/2011

He just said we should lower corp tax rate to 15 percent.. whoa.. this guy never stops.. HP did a great story on him telling AIG not to disclose toxic assets so GS would get full face value... aFRICKINmazing..

[meijiame]

06:18 PM on 02/15/2011

Just how is it that this fellow is still in charge of anything, much less the SEC. As the chief regulator of the New York office of the Federal Reserve, he didn't seem to know that it was his job to supervise banks..

I could understand leaving him in place during the turmoil as a sop to stability but there's been a reasonable span for him to decide he needs to 'spend more time with his family' and gtfo.


Maybe, just for fun, we could try someone that's not a wholly-owned subsidiary of the investment banks as the head of the SEC.

[thrashertm]

06:26 AM on 02/15/2011

Tim Geithner - the best patsy that money can buy. He will look the cameras straight on and lie without blinking. I just hope that history exposes this crony capitalist for what he is.

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[blindhammer]

02:32 AM on 02/15/2011

Did Geithner prove that the table really does not exist ... ?

[agathacallie]

01:10 AM on 02/15/2011

Wall Street, in the form of the most powerful banks and investment houses that indirectly run the Federal Reserve Bank which prints our money, have already stated and proven that they intend to move more and more of their activities off shore as a tax reducing, profit maximizing strategy. The taxpayers will see their financial assets continue to be converted into debt they must bear and into glorious tax free profits their "fund managers".

[Tulka2]

01:08 AM on 02/15/2011

Translation:  "You have to go to the bank with the economy you have".  (Yikes)

[WorldisMorphing]

10:56 PM on 02/14/2011

???
HEY MODS ....ENOUGH WITH THE PREEMPTIVE THOUGHT CONTROL....
I WASNT IMPLYING TO CUT ANYONE'S HEAD OFF !!!

[WorldisMorphing]

10:12 PM on 02/14/2011

Translation:
["--Finance industry is the preferred tool to pursue expansion of the empire.
-- Domestic market more or less tapped out in terms of easy low risk money siphoning.
--The Grand design, all along, was to own those who produce the wealth. Small and medium guys own mostly on our soil (land, real estate and laborers). The big guys own everything, everywhere on the planet. The remaining drones can dream of doing the same by gambling, to try to catch some of that reflected glory..."]
--------------------------------------------------------------------------
In 1971, Nicholas Kaldor said something to that effect(quoted by Jane D'arista ) :
--When we went to the fiat dollar standard...we would be taking a nation of entrepreneur out of the U.S, and turning it into a nation of 'rentiers', (meaning that we would be living off of other people..) --And that we would become and empire like the Romans, featuring bread and circuses to our people. --

[ohsaydidyousee]

09:42 PM on 02/14/2011

...China's number 1 stand up comedian...

[WorldisMorphing]

09:13 PM on 02/14/2011

["(In fairness, it was badgering by Summers and White House economist Christy Romer that helped make the stress tests so rigorous.)"]

HAHA ...I think William K. Black either spat out his soup all over the screen and keyboard...giggling like an incredulous neurotic...--or-- ...just had a heart attack...

...hope it's the first one Bill... ;-)

[toinfinityandbeyond]

08:07 PM on 02/14/2011

So basically, you have the Treasury Secretary of the United States, three years after a major financial crisis, saying out loud that what’s good for Wall Street is good for America.

In other words, welcome your vampire squid overlords.

[sonofsamphm1c]

03:39 PM on 02/15/2011

So basically, if you had realized he was absolutely right about it, there would be jobs now and no Tea Party members in congress.

Instead, progressives persisted in their insane pursuit of destroying Timothy Geithner, one of the only people in the room who was actually right.