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He wouldn't give a penny to a banker
I'll give the Treasury Secretary credit. He put himself out there last night. Mr. Geithner held a town hall meeting and took questions from people frustrated by the government's bailouts and spending sprees.
"I wouldn't give a penny to a banker, to benefit a banker," Geithner said at a town hall meeting hosted by CNBC at the Newseum in Washington. "But if you let the system get to the point where people are taking their money out of banks, where people can't get credit, where things stop, then you will see companies fail, unemployment rise, pension values fall by 30%, people having to work a decade longer than expected because of that damage."
On this week's After the Bell podcast which comes out later today, I talk to my friend Allan Sloan of Fortune. He agrees with Geithner on the last point. Had the government not stepped in a year ago, there could've been a lot more hell to pay. The frustrating thing to most people, though, is the way the TARP was disbursed, or should I say, thrown at the banks, and that to this day, there is very little accountability by the banks for what happened. TARP started under Paulson but even months later, as Vanity Fair points out, Geithner's Treasury wasn't operating much differently:
More than five months after the bulk of the bailout money had been distributed into bank coffers, Elizabeth Warren plaintively raised the central and as yet unanswered question: "What is the strategy that Treasury is pursuing?" And she basically threw up her hands. As far as she could see, Warren went on, Treasury's strategy was essentially "Take the money and do what you want with it."
But at last night's town hall, Geithner said U.S. citizens should never permit the government to commit to large expenses without paying for them.
Oh yes, he did say that. He was talking about the Bush tax cuts and two wars and the expansion of Medicare but it's plenty fair to ask him, what about now?
They STILL don't know where the first $350 billion of TARP went. When Obama appointed Geithner as Treasury Secretary, that was a signal that nothing substantive was going to change.
When Obama talks about "change", he is referring to pocket change. That's all we will have left after we get through through bailing out the too-big-to-fail banks. The too-big-to-fail banks were "stress tested", but never audited, so we don't really know the full scope of the situation even after a year. Another wave of foreclosures are coming in 2010 and 2011, so it is entirely possible this could happen again.
