Using Vietnam War logic (we have to destroy the village to save it) Geithner says he’ll save markets, not replace them.
It took failures by government and the private-sector to put the economy into a hole this deep, and it’ll take reforms of both to get us out, U.S. Treasury Secretary Tim Geithner said Monday.
In a live interview with Newsweek’s Jon Meacham, Geithner said he’s not interested in more bailouts or in having the government take the place of markets.
My Comment: Once again Geithner is proving he is a liar. Unless and until he is willing to cancel his fraudulent PPIP program there is no other word to describe Geithner.
He flatly rejected the idea of having the government determine how much corporate executives should be paid. And, when asked specifically about California’s fiscal woes, he said, “I wouldn’t use the word ‘bailout’ or ‘federal.'”
My Comment: I do not care what word he uses or does not use, actions speak louder than words.
On the other hand, Geithner did say government has to take a more decisive role than it has before.
My Comment: Hmmm. Let’s see. We cannot use the word Federal yet “government needs a more decisive role”.
He’s in “consultations” with California and other state and local governments about their financial plight, and he suggested that the states and cities will have to address “deep structural problems.” That is sure to be painful.
Even the federal government will have to “get back to living within our means when the crisis passes,” he said.
My Comment: With Obama, Bernanke, and Geithner in charge, the crisis is going to take a long time to pass.
The incentive system was badly broken, he said, because it allowed some people to make extraordinarily risky bets, knowing that they would receive the benefits (to the tune of billions of dollars) if the bet paid off, and also knowing that the shareholders, or the taxpayers, would pay (to the tune of hundreds of billions of dollars) if the bet failed.
My Comment: So what did Geithner do? Answer: Rob taxpayers to the tune of hundreds of billions of dollars to bailout those who took risky bets.
Geithner said President Barack Obama would unveil a more detailed plan to re-regulate the financial system in a few weeks.
Aside from getting the country back to work, there’s no more urgent need than fixing the system that rewarded such risky behavior.
My Comment: The way to get people back to work is to quit squandering taxpayer money, cut corporate taxes, and stop attempting to be the world’s policeman. Instead we are going to see mounds of regulation on top of regulation when the failure rests squarely on regulation, especially the biggest regulator of all: the Fed.
Those expecting a powerful recovery are badly misguided.
Mike “Mish” Shedlock
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