I’m not normally one to agree with McMeghan or Slate fraudster Henry Blodget and I don’t know enough to say that it’s time to start thinking about firing Tim Geithner. But everything I’ve read from Krugman and Atrios about Geithner’s (lack of a) plan for banks scares the hell out of me and Blodget puts together a pretty compelling indictment:
Then he took office. In the five weeks since, Tim Geithner has:
- Given a speech billed as the solution to the financial crisis in which he promised something vague, someday, that sounded an awful lot like the bad plan that didn’t work in the past administration (which really isn’t that surprising, given that Geithner was the one who came up with the earlier bad plan).
- Floated multiple versions of the same plan into the press hoping that one would be enthusiastically received by someone other than Wall Street (no dice.)
- Refused to seriously discuss the consensus opinion of most neutral economists and experts: That the banking system is insolvent and that the solution is pre-privatization.
- Given Congressional testimony in which his brusque, defensive manner and weak responses have inspired no confidence and served only to make people wonder again why Obama picked him for the job.
and, most importantly, Tim Geithner has:
Refused to revisit or defend his almost certainly inaccurate view that this crisis is merely a temporary price decline caused by a lack of liquidity, rather than a collapse of a debt-driven economy. You can’t cure the patient if you’re treating the wrong problem.
Again, I don’t know enough to say that Geithner should be fire. And I certainly am not ready to compare him Rumsfeld. But it should be noted that Bush’s refusal to fire people at the DoD contributed to the catastrophe in Iraq. And I hope that if something similar is brewing at Treasury, that Obama does make changes.
Update: Here’s a different perspective from the New Yorker. Either way, I’m all for Obama’s cabinet members taking a lot of heat. We’ve seen what happens with a cabinet that was completely insulated from reality.
Update #2. Dean Baker:
Finally, those who want a “risk regulator” to prevent future crises are covering up the problem. The more effective mechanisms would be to fire everyone at the Fed. Preventing a disaster like this was their job. If they can fail so enormously at such a basic task, with no job consequences, then there will never be any consequences for unthinkingly repeating the conventional wisdom.