Remember when Timothy Geithner was the American economy’s Indispensable Man – so much so that his carelessness about filing accurate tax returns had to be put to one side. His reputation has shrunk since then. Tomorrow’s Wall Street Journal has a story that will diminish it further: “Geithner Vents as Overhaul Stumbles”. Last Friday, Mr. Geithner and the heads of the major financial regulatory agencies met to talk about the Administration’s proposals for tightening government control of the securities and credit markets.
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.
Who were treated to “an expletive-laced critique”.
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.
True enough, but what was the impetus for the Secretary’s fury?
Government officials said Mr. Geithner had expected regulators to object to parts of the plan that threatened their power or authority, but Treasury officials appeared caught off guard at how much the criticism resonated with lawmakers. [emphasis added]
In other words, the trouble with the criticism is that members of Congress think that it’s well-founded. We can’t have that, you know. If too much thought goes into altering a regulatory scheme that affects every nook and cranny of economic life, the crisis might “go to waste”.
That Mr. Geithner goes along with the Administration’s demand for pell-mell action, instead of pointing out the need for close consideration of what went wrong last year and how (also, whether) the panic could have been headed off or ameliorated, is bad enough. That he can’t argue for his position without resorting to barnyard epithets strengthens the impression that he is much too little for his job, and growing smaller by the day.
Comments