The most humiliating aspect of Timothy Geithner’s first embarrassing display of incompetence as Treasury Secretary isn’t the fact that he almost touched off an international incident and a trade war with a major, if troublesome, US partner. It’s that Joe Biden had to clean up after him. Geithner shot off his mouth even before taking the oath of office, and the Obama administration had to hit full reverse:
The Obama administration backed off Treasury Secretary Timothy Geithner’s statement last week that China is “manipulating” its currency.
In an interview with CNBC on Thursday, Vice President Joe Biden said the administration has made “no judgment” on whether the Chinese have manipulated their currency, an accusation that would have international legal ramifications. …
Geithner said in a written statement as part of his Senate hearing that the Obama administration “believes that China is manipulating its currency.”
Many people believe China manipulates their currency. I’m sure Geithner believes it. Heck, I believe it. But if Geithner and Obama make that the official US position, it will trigger a major complaint in the WTO, which could lead to significant trade sanctions against China, and a trade war at the worst possible time.
Maybe Geithner thought that the Obama administration figured this would be a good time to touch off a trade war — right in the middle of a serious and possibly severe global recession. He might have good reason to think that, but as it turns out, Geithner apparently didn’t know what the official position of the Obama administration was or what his statement meant as a member of Obama’s cabinet. He gave bad information to Congress and misrepresented the United States.
People wondered whether Geithner failed to pay his taxes out of a desire to evade them or total incompetence. I had assumed the former, but I’m beginning to think that it might be the latter. Gee, I just can’t wait to see what the only man qualified for this position will do next … with over a trillion dollars at his disposal.