Why the Aussies could have predicted Geithner’s incompetence
posted at 5:12 pm on March 6, 2009 by Ed Morrissey
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Remember when the Obama administration and its allies in Congress urged the confirmation of Tim Geithner despite his tax problems? They claimed that Geithner was “uniquely qualified” to lead the nation out of an economic collapse, and that no other candidate could possibly replace Geithner. Former Australian prime minister Paul Keating must have thought the Democrats and American media had discovered a completely different Tim Geithner than the one he knew:
If anyone in the US media had thought to ask a former Australian prime minister for his assessment, they would have heard a different view. And they would not have been so surprised at Geithner’s performance since.
In a speech to a closed gathering at the Lowy Institute in Sydney on Thursday, Paul Keating gave a starkly different account of Geithner’s record in handling the Asian crisis: “Tim Geithner was the Treasury line officer who wrote the IMF [International Monetary Fund] program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis.”
In other words, Geithner fundamentally misdiagnosed the problem. And his misdiagnosis led to a dreadfully wrong prescription.
In fact, Geithner bungled the job so badly that Asian nations still refuse to “stick their head in the IMF noose,” as Keating puts it. Despite 7% compound growth over several years afterwards, Indonesia still couldn’t get itself out of the hole Geithner dug for them. Soeharto lost power, and countries like China paid attention. Instead of working more cooperatively, China built up big reserves instead, creating a debt imbalance that helped make the current financial crisis much worse than it might have been.
Geithner’s performance since his confirmation hasn’t surprised Keating at all. The dithering on bank issues has left the US with few realistic options outside of nationalization on some scale. The vacillation and fumbled rollouts of economic policy have left the markets with no confidence at all in his leadership, leading to a flight from capital investment clearly shown in the stock market performance of the last few weeks. Keating understands that lack of confidence from his own experiences with Geithner, but the US has just begun to figure out Geithner’s incompetence.
That sound you hear from down under? Laughter at the gullibility of Congress and the media in buying the argument that a man who couldn’t figure out his own taxes had the only qualifications for handling American economic policy. Our mainstream media never reported on this botch-up until it was far too late to do anything about it.
Update: Jen Rubin apologizes to Geithner for not realizing he was a boob instead of a cheat.
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Fannie Mae made a killing and reaped a huge PR bonanza during that Asian financial crisis. Mortgage credit seized up here and Fannie started buying everything. Then Frank Raines ran for the cameras to brag about how Fannie proved its importance by being the sole source of liquidity and helping to end the crisis. Barney Frank and company threw roses at him. This was the same year that Fannie cooked its books to give Raines, Gorelick, and co. the maximum bonuses.
Coincidence? Hmmmmm.
rockmom on March 6, 2009 at 7:47 PM
You are right about Obama not being focused like a laser on this issue–Geithner is behind on his staffing of the department. They are probably recalibrating after this week’s sell-off–or at least they had better be.
I think the Citi solution made some sense. By focusing on the tangible common equity ratio and converting the preferreds they should be setting things up for the massive write-downs needed for dumping assets into TARP II. BofA is next.
dedalus on March 6, 2009 at 7:51 PM
If Obama stopped campaigning long enough to focus like a laser on this issue, do you think it would help? He is an Alinsky-trained Socialist who hates free market capitalism, so with that in mind, wouldn’t we Capitalists be better off if he hid under the bed for 4 years and didn’t do anything?
Buy Danish on March 6, 2009 at 7:56 PM
Wall Street knows they are stuck with him. They are reacting to what they think is an inadequate solution on the banks.
If the Treasury just went ahead and fully nationalized some of the banks and allowed others to dump assets the market would probably be in better shape today.
Allegedly, Geithner is supposed to release details on his public/private plan in about two weeks. Hope everyone can hold their breath for that long.
dedalus on March 6, 2009 at 8:05 PM
Wow this is so much worse than I thought possible. Just Wow.
petunia on March 6, 2009 at 8:11 PM
Is “focus like a laser beam on the economy” the talking point du jour for the Dems? I ask because oh so coincidentally I just hear pompous leftist jackass extraordinaire, John Flannery, use the exact same phrase on O’Reilly (in a segment with the mahvelous Ann Coulter).
Buy Danish on March 6, 2009 at 8:15 PM
Actually, I heard Mark Shields (or maybe it was David Brooks) use it tonight with Jim Lehrer, but not in a way that was flattering to O. Rather, he was diminishing O relative to Clinton.
My point is simply that Wall Street sees indecisiveness in DC and is dumping the market.
Don’t know who John Flannery is. I’ll Google him.
dedalus on March 6, 2009 at 8:21 PM
Paul ‘the recession we had to have’ Keating?
Reaps on March 6, 2009 at 8:24 PM
getdeathers?
Entelechy on March 6, 2009 at 8:28 PM
Atlas has shrugged, stocks and now some banks rejection of TARP funds. The one,though he has some power has lost a lot of support.
My young leftie neighbor took his magnetic O off his SUV cleaned, the spot where it had been,placed the o on a top shelf in his garage.
As I watched silent and unseen by the kid I smiled as I saw buyers remorse in action.
Col.John Wm. Reed on March 6, 2009 at 8:29 PM
But these are the flaws of the mere mortals who serve at the discretion of the dear leader.
Public denouncement of brother number 3 by the dear leader will begin in 4, 3, 2, 1…
All of these folks have a date with destiny under the bus, the only question of which route and which schedule.
moxie_neanderthal on March 6, 2009 at 8:36 PM
I knew it. It’s an official talking point, gone astray perhaps.
Flannery is a smirking, bow-tie wearing tool who wants to prosecute Bush for war crimes or something.
Buy Danish on March 6, 2009 at 8:42 PM
How much money did Tim Geithner give to Obama? Or to which members of Congress? What promises were made? What was traded so Geithner could get this position?
Seriously.
I can think of no other reason why this Tim Geithner clown would have could have been pushed so hastily through the confirmation process with so few questions asked and so little actual inquiry made into his own past. He was “the most qualified person?” “Uniquely qualified” to lead the nation out of an economic collapse?
Based on what?
I can easily envision a “Nacht der langen Messer” on the part of John Q. Public once this Administration is driven from office, and that would include a lot of members of Congress, in a truly bi-partisan manner.
coldwarrior on March 6, 2009 at 8:49 PM
Sorry – forgot to respond to that – Wall Street is also dumping the market because of the jobs/investment sucking effects of hideous tax increases which are looming on the horizon which is the formula to turn a recession into a depression.
Buy Danish on March 6, 2009 at 8:55 PM
Geithner is dangerous. Either he believes this crap or he doesn’t and it really doesn’t matter either way. The net effect is to crater an already fragile economy.
The President doesn’t even know what constitutes a PE ratio and is acting irresponsibly in part because he’s a leftist ideologue but in part because he doesn’t understand how business and the economy works. But Tim Geithner should know better. By serving the prez in this capacity he is misusing his office and ill-serving the American people. He will be complicit in the imposition of tremendous unnecessary hardships on the American people. Disgusting.
moxie_neanderthal on March 6, 2009 at 9:02 PM
*Head*Desk*
BrideOfRove on March 6, 2009 at 9:05 PM
I’m confident that he is a true believer. Sadly, Hank Paulson was too.
funky chicken on March 6, 2009 at 9:14 PM
Has any MSM picked this up? This is terrible and that idiot should be called to resign by all of us! NOBODY is to big to fail. NOBODY!
I AM SICK OF THIS CRAP!
We are just sitting around and our country is being destroyed on PURPOSE!
We should be up in that man’s office dragging him out by his ears and throw him out, and next it’s Pelosi.
COME ON!
Mercy4Me on March 6, 2009 at 9:14 PM
Geithner and Obama were sold as two of the smartest guys in the room. Now, not looking so much.
But what is really disheartening is what they’ve done to Volcker. Paul Volcker and his people were brought in to sell this gang and be a well of experience from which this administration could draw. But Volcker’s team has been TOTALLY marginalized. There are grumblings among the Volcker camp that he and his people are not consulted and are left completely out of the loop.
Really? Why is that?
A dangerous modus operandi is emerging that suggests that this administration and by extension Geithner, don’t really care what anyone thinks, they don’t care about listening to anyone who might moderate their agenda or has actual experience dealing with these sorts of major problems. Does anyone think that Volcker would sign on for this crap, especially at this juncture of a major crisis?
In between ruining various industries and running down the economic well being of the nation, perhaps Tim could spare a few minutes and explain to the Prez what constitutes a PE ratio. That way the next time the financial and advisor and chief gives a buy signal for the broad market he won’t look so damn foolish.
moxie_neanderthal on March 6, 2009 at 9:22 PM
Volker made a strong public statement yesterday (?) criticizing Geithner for having failed to hire/appoint deputies. And yesterday Geithner lost Nazereth and somebody else that he had actually chosen.
Remember when it came out that McCain had offered Sec Treas to Romney but Mitt turned it down? That was back in October, and it showed that McCain was looking at filling a cabinet with sharp, competent folks.
But the American people voted for the empty suit.
January of 2011 is less than 2 years away.
funky chicken on March 6, 2009 at 9:41 PM
Do you think he knows? Lindsay Graham (yet again) has some explaining to do….
funky chicken on March 6, 2009 at 9:42 PM
Who needs deputies? What we need is an exorcist!
moxie_neanderthal on March 6, 2009 at 9:52 PM
Obama is a magnet for cheats and incompetants.
It is terribly sad if we have to depend on Rush and very few others to expose the simple facts.
seven on March 6, 2009 at 10:00 PM
Leading IBs academics and fund managers that all thought subprime was contained and it was silly to think DOW could ever fall under 10K?
Every so called expert has been wrong about what happened. What makes you think they have a clue what to do in order to fix the mess?
And even so it is a moot point. There is no fix. There was a bubble, the bubble burst, now we have the aftermath. That’s all.
angryed on March 6, 2009 at 10:19 PM
The fact that he’s associated with the IMF is all I needed to know. That he’s a Federal Reserve insider would be another clue that his intentions might not match up with that of the people.
popularpeoplesfront on March 6, 2009 at 10:40 PM
There wasn’t another Fed president available? Mon Dieux!!
They picked the one who would toe the line on global warming and beg for tax hikes on those mass CO2 emitters aka oil and coal companies. Its not good enough to be an economist, you gotta be a greeeennnnn economist to get a job now.
What a crock.
mdetlh on March 6, 2009 at 11:59 PM
I liked it better when other countries hated us instead of this other countries laughing at us thing.
myrenovations on March 7, 2009 at 12:18 AM
The Obama “presidency” is an utter sham.
Let’s face it, 65 million “Americans” are complete dumbasses, who should have their citizenship revoked and be promptly relocated to North Korea-preferably before they have had a chance to procreate and further contaminate the gene pool.
We owe at least that to future generations.
-Dave
Dave R. on March 7, 2009 at 12:22 AM
“Geithner’s performance since his confirmation hasn’t surprised Keating at all. The dithering on bank issues has left the US with few realistic options outside of nationalization on some scale.”
And you do not think that nationalization of banks is NOT the desired outcome? Shame on you, boy! Grow up and think like an adult, Ed. Face obvious reality.
{^_^}
herself on March 7, 2009 at 12:36 AM
gietner is a complete firgging idiot..
he cant pay hist taxes
he couldnt figure out wy madoff was ripping off the entire system
and now obama hires him and the stock market takes another 20% dump..
sheesh the only ones who figured it out are the auzzies..
wow i wish we had them running our government
hell at least they saw through this creeps disguize..
jcila on March 7, 2009 at 12:56 AM
Ah .. Ed. You are making the same mistake everyone else has been doing. You have to go watch the videos again, and listen closely. They said that Geithner was uniquely qualified to lead the nation INTO an economic collapse.
progressoverpeace on March 7, 2009 at 2:39 AM
Stunning! I remember when we had a press who might have uncovered this…sigh! Now…we just have Obomination butt boys trying to be next in line for a ride on O Force One for a good buggering by The One…
sabbott on March 7, 2009 at 3:45 AM
Well, who else can scare the East into submission like Geithner?
That’s why I would rather he stay in his spot.
sethstorm on March 7, 2009 at 6:04 AM
I never understood why anyone thought Geithner was qualified, let alone the only one qualified, to be Treasury Secretary. His job at the NY Fed was to make sure that the banks in his jurisdiction (e.g., Citigroup) were properly capitalized and not engaging in any unsound or imprudent practices. We all know now what Citigroup and the other banks were up to while Geithner was looking the other way. He was a complete and utter failure. Of course, being a Democrat, that level of incompetence immediately qualified him for promotion to a Cabinet-level position.
AZCoyote on March 7, 2009 at 6:48 AM
I read this article and before I read any of the comments, I sent this email to a friend. Now that I”m reading the comments and what some people thikn.. I’m getting more convincved that this entire thing is an elaborate setup.
From: Vince P
To:
Sent: Saturday, March 07, 2009 7:01 AM
Subject: Interesting story from au about Tim Geither
Im extremely suspicious of this guy. He’s been at the heart of the US Bailouts of every company that we’re foolishly bailing out.
His father worked with Obama’s mother in Indonesian banks.
Hes a tax cheat. and yet somehow Obama insisted he be Sec Of Treas.
Here’s a story from Australia say that the guy compeltely f***ed handling the 1998 Asian economic crisis.. the conseqence was China’s hoarding of cash and subsequent purchasing of Mortgage Securities.
VinceP1974 on March 7, 2009 at 8:10 AM
Isn’t China going to remember this guy?
Will this not be an incentive for China to figure out how they could separate themselves from doomed US Dollars?
VinceP1974 on March 7, 2009 at 8:12 AM
A Dem called Mark Levin’s radio show yesterday and said he was very upset with O’barry (I think he did use “lied” or “lies”).
I just spend 3 days with my uber-lib, BooshChimpHitler-hating, lifelong Dem father and he never talk politics a single time.
For him, this speaks volumes.
ex-Democrat on March 7, 2009 at 10:29 AM
It’s a hell of a world when we have to hope that the Chicoms understanding of economics is better than our current administration, as they try to save their economy by saving ours.
darktood on March 7, 2009 at 6:29 PM
I wish Laurence J Peter were still alive. He could write a sequel to The Peter Principle based on the Obama administration alone.
technopeasant on March 8, 2009 at 5:10 PM
What was Obama’s mother doing working for a Indonesian bank? I thought she was some sort of anthropologist or sociologist.
Timothy Geithner and Mrs. Obama: what a coincidence
technopeasant on March 8, 2009 at 5:14 PM
I wish there was more of an exploration of Mrs. Obama’s Marxist roots and her ties to Bill Ayres and black liberationists.
You can’t tell me that his mother’s Marxist roots had nothing to with her son becoming a Marxist.
technopeasant on March 8, 2009 at 5:15 PM
Hell of a job Timmy.
Itchee Dryback on March 8, 2009 at 10:19 PM
If they are still using the term “bloke,” I’m in.
WashJeff on March 6, 2009 at 5:33 PM
‘bloke’ is still in,ditto ‘mate and ‘ good’ay ‘.No so much ’sup however.
Upsides:stable politics , generally prosperous society, banks appear healthy but bruised
Downsides: Obama worship rife in MSM, Prime Minister self promoting Windbag and Left
Libcrats control public Education.Mattmax on March 9, 2009 at 6:00 AM
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