Geithner Goes Over The Edge
Is the stress of running running the Treasury and trying to figure out how to borrow almost $2 trillion dollars starting to take a toll on the Treasury Secretary?
On Friday, Treasury Secretary Geithner lashed out at top federal regulators in an expletive filled tirade. Mr Geithner’s rage seemed to be based on his perception that the FDIC, the Federal Reserve, the SEC and other government agencies had not blindly endorsed the Obama administration’s demands regarding financial regulatory reform.
WASHINGTON — Treasury Secretary Timothy Geithner blasted top U.S. financial regulators in an expletive-laced critique last Friday as frustration grows over the Obama administration’s faltering plan to overhaul U.S. financial regulation, according to people familiar with the meeting.
The proposed regulatory revamp is one of President Barack Obama’s top domestic priorities. But since it was unveiled in June, the plan has been criticized by the financial-services industry, as well as by financial regulators wary of encroachment on their turf.
Mr. Geithner told the regulators Friday that “enough is enough,” said one person familiar with the meeting. Mr. Geithner said regulators had been given a chance to air their concerns, but that it was time to stop, this person said.
Among those gathered in the Treasury conference room were Federal Reserve Chairman Ben Bernanke, Securities and Exchange Commission Chairman Mary Schapiro and Federal Deposit Insurance Corp. Chairman Sheila Bair.
Friday’s roughly hourlong meeting was described as unusual, not only because of Mr. Geithner’s repeated use of obscenities, but because of the aggressive posture he took with officials from federal agencies generally considered independent of the White House. Mr. Geithner reminded attendees that the administration and Congress set policy, not the regulatory agencies.
In addition to Mr. Bernanke, Ms. Bair and Ms. Schapiro, other attendees at Friday’s meeting were: Fed Governor Daniel Tarullo, Comptroller of the Currency John Dugan, Commodity Futures Trading Commission Chairman Gary Gensler and Office of Thrift Supervision Acting Director John Bowman.
Achtung! Mr. Geithner, exactly what country do you think you are working for? Does our government no longer believer in the principles of “checks and balances”, compromises and democratic free debate? Shocked high level government officials who attended the meeting had no comments for the press on their meeting with Mr. Geithner.
Two days later, Mr Geithner gave another remarkable performance when he broke the holiest rule of politics and told the truth about the need for a broad based tax hike on the middle class.
Treasury Secretary Timothy Geithner said Sunday that signs are emerging that the economy is starting to turn around, but he cited private economists’ predictions that unemployment rates wouldn’t start to fall until the second half of next year. He also suggested that the current budget deficit was unsustainable, and both he and Lawrence Summers, the White House’s top economic adviser, declined to rule out future tax increases.
Asked whether President Barack Obama could keep his campaign pledge to hold down taxes for those earning less than $250,000 a year, Mr. Geithner didn’t respond directly.
“We can’t make those judgments yet about what exactly it’s going to take” to reduce the deficit, he said on ABC News’s “This Week.” “People have to understand that we have to bring those deficits down.”
The Congressional Budget Office has projected that the federal budget deficit would hit $1.8 trillion for the current fiscal year ending Sept. 30.
One can only wonder about how severe a thrashing Mr Geithner must have taken from the President for publicly admitting that the campaign promise to tax only the rich was soon to become just another broken promise. Or was the Geithner performance done at the behest of his boss to lay the necessary groundwork for the inevitable tax increase coming for the middle class? Either way, based on the Treasury Secretary’s behavior over the past week, the logical question is “should Geithner be stress tested”?