Tim Geithner has the Answer to the Next Financial Crisis

[necron99]

Amusing rant about Geithner's recent op-ed...

http://seminal.firedoglake.com/diary/40758
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Treasury Secretary Timothy Geithner uses the Washington Post’s op-ed page to tell us How to prevent America’s next financial crisis.

I’m not an economist, but I think his answer boils down to "trust the not-really bipartisan Senate bill to give not-even-close-to-credible regulators like him the authority to get it right next time." That should be enough to get everyone to move their money from Citi and Bank of America to their mattresses.

Frankly, Tim lost me at hello; his first sentence declares:

America is close to turning the page on this economic crisis. [!!!] . . .
In fact, we are repairing our financial system at much lower cost than anyone anticipated and expect to return hundreds of billions of dollars in available but unused TARP resources to the American people. That is a rare achievement.

Actually, whoppers that huge are not that rare. But Tim isn’t finished bragging:

. . .we estimate the overall cost of this crisis will be a fraction of what was originally feared and much less than what was required to resolve the savings and loan crisis of the 1980s.

Then he caveats this proud achievement by noting it doesn’t count what really matters:

The true cost of this crisis, however, will always be measured by the millions of lost jobs, the trillions in lost savings and the thousands of failed businesses. No future generation should have to pay such a price.

What is this man saying? The cost wasn’t that bad, except the true cost was in millions of unemployed with no near-term relief (with no Administration plan to do anything about that), trillions in lost wealth that likely will never be recovered, and thousands of lost businesses. But man, didn’t we make some bucks on TARP? If you needed a sign these people think the way the banksters do . . .

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...I just liked the prose. ;)

[don]

Re: Tim Geithner has the Answer to the Next Financial Crisis

from Part 2, China's Next Phase, of EJ's Hudson interview:

EJ: How do you suppose Geithner is doing on his latest bond sales trip to China?

MH: The first thing they’ll say is, “What do we get in exchange for this?” They’ll say, “Okay, we understand that you’re selling us bonds. We understand that on the one hand you’re telling us to raise our currency value. That will reduce the purchasing power of the bonds. You’re telling us you want us to take a loss on the bonds. You’re saying you want to sell us a bond that’s going to go down maybe 25% or 30% in value. Okay, we can live with that. What’s the quid pro quo? What’s your offer?”

EJ: And what do you think the offer is?

MH: Open-mouthed confusion. “Gee. I didn’t think of that. You mean you want something in exchange?” The Asians are just laughing. “Well, you know, that’s just how it works. You want us to give you money for something; you’re supposed to give us something for the money aren’t you? I mean isn’t that how this thing is supposed to work?” And the Americans don’t seem to be aware of that.