Timothy Geithner: 'You Can't Legislate Away Stupidity And Risk-Taking And Greed'

PORTLAND, Oregon, April 25 (Reuters) - Treasury Secretary Timothy Geithner sought on Wednesday to reassure Americans that the Obama administration was doing what it could to rout out the bad actors from the worst financial crisis since the Great Depression.

"The wheels of justice are turning now," Geithner said at an event in Portland after touring a factory there. "They are not turning as fast as people would like, but we have the best system in the world for making sure we can enforce the laws of the land," he said.

Geithner suggested that holding people accountable for the wreckage caused by the recent housing collapse and the ensuing financial meltdown was not that simple since most crises were not caused by criminal activity.

"Most financial crises are caused by a mix of stupidity and greed and recklessness and risk-taking and hope," said Geithner, who helped tackle the crisis for the Bush administration when he was the head of the New York Federal Reserve and has been urging Europe to act more aggressively to contain its debt problems.

"You can't legislate away stupidity and risk-taking and greed and recklessness. What you can do is make sure when it happens it does not cause too much damage and to do that you have to make sure you have good rules against fraud and abuse, better protections and you force banks to hold more capital against their risk," he said.

Although civil charges have been filed against some of the biggest Wall Street banks in connection with the financial crisis, no household names have gone to jail.

At the event, Geithner shot down reports that he was interested in becoming the president of Dartmouth College, his alma mater. Geithner did not elaborate on his future except to reiterate that he planned on staying until the end of the Obama administration's first term.

Comments

[tttt9erfan]

04:39 AM on 05/04/2012

That quote coming from a tax cheat? Funny!

[l78lancer]

10:52 PM on 04/30/2012

It's not me! It's those guys!

[Gary Strawley]

08:22 AM on 04/30/2012

It is only about GREED, they are not dumb they just act that way to con millions of people! It is
hate to the people, negitivity to the people and lies to the people, they know the people are very NAIVE!! and they will fall for the BS< AND VOTE AGAINST THERE OWN FAMILYS!
NAIVE SUCKERS!! BUY THE MILLIONS! BUT THE DEM'S WILL NOT SPEAK UP SO THAT HELP THEM TOO! JUST LIKE THE LAST ELECTIONS!!!

[Eris23Skidoo]

12:52 PM on 04/30/2012

If the dems were to accuse the republicans of half of the stuff they are doing but not have any hard proof of it they would just lose credibility. Republican tactics thrive in a lawless environment.

[l78lancer]

10:50 PM on 04/30/2012

Ala, the further right you go the greater the tendency towards lawlessness. The right calls it individual liberty and the functioning of the unfettered functioning of the capitalistic free market.

Listen closely to Ron Paul sometime and you get the feeling that libertarianism has a gravatational pull towards anarchy.

[juicybrisket]

10:34 PM on 04/29/2012

this is rich coming from him

[Vera Gottlieb]

12:12 PM on 04/29/2012

Sage words from the very person who is guilty as hell???

[Eris23Skidoo]

12:53 PM on 04/30/2012

Guilty? Of what? Not being a bagger's favorite Obama Admin employee?

[Vera Gottlieb]

02:31 PM on 04/30/2012

Guilty of being part of the group that almost took the entire world to the brink of financial disaster! Only in the US do criminals walk around free.

[inorbit]

11:00 AM on 04/28/2012

"You can't legislate away stupidity and risk-taking and greed and recklessness."

I respectfully disagree, Mr. Geithner, you can legislate against those things by making the penalties for flouting the law so stringent that no one will want to be stupid, risk-taking, greedy and reckless.

[Frank J Savel III]

09:52 AM on 04/28/2012

So, the principle of Rule of Law does not work?

[ErnestineBass]

02:26 AM on 05/04/2012

After the repeal of Glass-Steagall, principles flew out the window.

[NoPartyCharlie]

11:06 PM on 04/27/2012

Says the man who demanded the SEC to deregulate derivatives.

[Neanderthaal]

10:57 PM on 04/27/2012

That Timmy didn't choke on the irony of his statement speaks more of his sociopathy than his interest in reforming anything.

He's a helluvva lot funnier than that idiot Jimmuh Kimmell.
I propose Timmy take over that show after he resigns from Treasury on April 30.

[Eris23Skidoo]

12:54 PM on 04/30/2012

Well now that you've revealed you have no sense of humor I guess I can ignore your comments.

[Robert M Shelby]

05:58 PM on 04/27/2012

True, legislation can scarcely do away with greed, stupidity and ill-considered risk-taking, but bad results can be pilloried in public and punished with meaningful penalties. Mr. Geithner himself has some things in his past actions prior to public service which he would prefer not be discussed, so he quite naturally feels uneasy about possibly getting punished for bad results from things which have proven, economically, to have been moral errors.

[banjo man]

04:19 PM on 04/27/2012

why can we not legislate this stuff....we do everything else

[Eris23Skidoo]

12:56 PM on 04/30/2012

Because we're not the republicans who think you can end abortion by outlawing it. They've never heard of the "hangar method" and don't care that people who end abortions on hangers are also likely to end their lives there too. They don't care. They're self-righteous christians.

[banjo man]

05:23 PM on 04/30/2012

agree....was just being a bit sarcastic in that the republicants are trying to legislate everything under the sun...

[Kasie Ray]

02:40 PM on 04/27/2012

Where, in this discussion, is a mention of the greed of buyers who didn't read the fine print and see a "too good to be true" home loan? I saw it, declined to buy, and don't have a college degree. I have little empathy for those who bought into the "Keep up with the Joneses" idea and it backfired because they valued their own worth on the worth of their homes. I am completely empathetic to those who kept their mortgage payments, insurance etc. well below the 25% suggested threshold of income, however. Buying property has always been a gamble. Buying property without doing background research on one's lender, without honestly assessing one's own ability to pay over the long-term, without factoring in deregulation and without knowing what derivative trade was in the first place? Stupid.

I've watched family members buy into the suburban hype. I've watched people I love lose everything because they didn't adjust their own egos, desires and expectations down before investing. There's plenty of blame to go around, and Wall Street and Timmy G don't deserve all of it. The American Greed Mentality of "I've got to get mine!" is also to blame.

[GetRealSoon]

06:14 PM on 04/27/2012

Excuse me? You said,

"Buying property without doing background research on one's lender, without honestly assessing one's own ability to pay over the long-term, without factoring in deregulation and without knowing what derivative trade was in the first place? Stupid."

One has to know derivative trades before calling the Realtor? One has to background check with the FBI before buying a home? Is that your point.

Seriously?

[Sahuaro]

01:03 AM on 04/28/2012

OK, skip that part. Does the rest of it make sense to you?

[inorbit]

11:06 AM on 04/28/2012

No financial institution should make a loan to someone who is not financially able to pay back that loan. Yes, it is stupid to take on a loan you can obviously never pay back, but it is ultimately the responsibility of the lender to protect itself by not making what used to be called "bad loans." People have been trying to borrow money they couldn't afford to pay back since money was invented - that doesn't mean that lenders should allow them to do so. It's akin to a bank leaving its vault wide open so that anyone can come in and steal money whenever they feel like it. New financial instruments like credit default swaps have made making loans that are sure to fail profitable, turning the industry upside down and putting the economy of the entire planet at risk. It's time to stop it and go back to making bad loans unprofitable.

[stargazer13]

02:24 PM on 04/27/2012

maybe not timmy

but we can and shall fire them :)

and reduce there criminal companies to just a bad memory

[Mike Keough]

01:14 PM on 04/27/2012

Hey Tim, you are totally wrong. Glass-Steagall DID regulate stupidity and greed and recklessness and risk-taking and hope. For fifty years it DID regulate the vultures , all of whom you shield by making statements like "was not that simple since most crises were not caused by criminal activity" cuz none of you in Economic Power desire any one to go to the clinker. Every thing anyone in the Treasury Department reeks of dis-ingeniousness, because you do nothing but barf misinformation. There were laws in place, there could be laws in place, and both regulators and bankers should be prosecuted. So, frankly it is you who is full of *hit. I have never read about you standing anywhere and demanding that the Dodd-Frank law be passed, nothing about the Volcker rule, and surely nothing about re-instating the Glass- Steagall. You are now, have always been useless to the People. Your vested interest is in your friends,

[turtom]

03:20 PM on 04/27/2012

I think you have this right, Mike. Glass-Steagall did work and its repeal was the beginning of this crisis. And Geithner's appointment to Treasury was a huge mistake, both politically and policy-wise.

But that cannot be undone. We can only hope a second term will bring some additional change. Dodd-Frank is not enough. It is certain that Romney's election would gut whatever protections and regulations we do have.

f/f

[nypapajoe]

12:12 PM on 04/27/2012

Oh yeah? Than explain the stupidly and grand theft of our nation by a bunch of Wall St Bankers?