There are two relatively recent articles on US Treasury secretary Tim Geithner. One is in The Atlantic, which is more critical, while the one in the New Yorker is more sanguine. The above video is from The Atlantic talking about Geithner’s svengali appeal and Jedi-mind-trick abilities—except with Wall Street and those in the public who know him and what he does. Inside the beltway, it sounds like he’s a veritable David Watts in many circles. This is pure Erving Goffman à la The Presentation of the Self in Everyday Life.
Ironically, he’s become a target of both conservatives who think he’s been too tough on the banking sector and the left who think he should have moved towards nationalizing the banks. He allegedly got the Treasury secretary job because of a good interview with Barack, despite being in the running with his old boss, Lawrence Summers, and the stalwart Paul Volcker, a Carter appointee who helped get the economy under control under Ronald Reagan’s watch.
The biggest problem I have with Geithner’s approach is that he’s operating under the assumption that there is nothing unsound about the capital markets and is seemingly ignoring the fact that there are structural issues with the US economy that can keep the nation in recession for years. Geithner is reluctant to do anything drastic, such as nationalizing the banks {a last-resort strategy}, because he’s afraid that this will effect a policy change that will have enduring consequences. So, while he’s content with a supply-side bailout with a jobless recovery—employers are working their employees harder, there’s a reluctance to get to the heart of the matter. The oligarchies of the banking sector ran aground with their policies and this needs to be addressed. The banks and the politicians have been systematically allowing for the concentration of power, which was accelerated in Clinton’s second term and continued W. MIT professor Simon Johnson, an IMF chief economist with experience with emerging market crises echoes the sentiment that the banking sector needs to be scrutinized to say the least. Geithner’s response is that the US economy is not an emerging one, but I say that all bets are off given the structural changes going on with permanent middle-class job losses and the productivity wave being over. His remarks may go down in history as the heights of arrogance, particularly if the US economy languished like Japan’s since 1990. There are parallels between Japan then and the US now, which should be examined.
A year ago, apparently Obama himself was playing pollyanna with Geithner in hoping the US would grow itself out of the recession. The economic sturm & drang and bailout drama played out over the course of the year and Obama has stood behind Tim, through thick and thin. A cautious, measured approach has been the code of the day with the aim of patching together the economy and nor falling prey to populist temptations to mete out justice, mediæval-style à la Marsellus Wallace.
While much of the framing of managing the economy has been couched in terms like vengeance against the greedy Wall Street robber barons and how that affords political capital, the reality is that he’s a centrist. Barack’s faith in Tim Geithner is somewhat telling. More telling is how the Obama administration has done so little to frame the Geithner agenda and to “sell” the policy and from a marketing and PR perspective, change this ain’t. More problematic is the fact that I don’t think these policies are going to help the US economy recover. Sure, the Geithner plan stemmed the hemorrhaging of public funds and served up a cosmetic recovery on the cheap, but is this so much window-dressing on an economy that still geared towards concentrating power and wealth AND subject to similar meltdowns without increased regulatory oversight? I feel there are structural issued that need to address failpoints in how financial intermediaries are managed, which need to be addressed in order to prevent future meltdowns and fully restore the faith in US capital markets.
Twitterversion:: No love for Treasury secretary Tim Geithner? PR #fail, but are policies fiddling while Rome burns? #ThickCulture @Prof_K
Song:: The Jam-‘David Watts’