Tim Geithner on the op-ed page the NYT:
THE devastation wrought by the great recession is still all too real for millions of Americans who lost their jobs, businesses and homes. The scars of the crisis are fresh, and every new economic report brings another wave of anxiety. That uncertainty is understandable, but a review of recent data on the American economy shows that we are on a path back to growth.
The front page of the NYT:
Consumer spending and personal incomes were stagnant in June, according to government statistics released on Tuesday, the latest indication that the economy will continue to struggle in the second half of the year.
The Department of Commerce figures showed that consumers were continuing to try and save money while also paring down their debts. They were the latest figures in a picture of a weak economic recovery plagued by unemployment, a sickly housing market and uncertain consumer confidence.
Personal income was flat in June, compared with a slight 0.3 percent rise in May, the Commerce Department figures showed on Tuesday. Disposable personal income, or income after taxes and expenditures were also flat, compared with slight increases in May.
Don’t worry. Republicans and Blue Dogs will make sure there is no relief any time soon. At least not before November.
Well, yeah! That’s the whole plan in a nutshell. Cause Obama to fail, demonstrate that true allegiance to Ronaldus Maximus is the only way to succeed, take back the Government and finish the job that Bush started! I.e., completely fuck the country over. I only wish Mitch McConnell, John Kyl et al. would be more honest about their true motives. I ain’t holding my breath…
Begging the question “And what relief do you expect to come after November?”
Or have you suddenly graduated to an income level high enough that the Rethugs will “take care of you” (in a good, not Mafia, way) in the next session?
You obviously aren’t a graduate of the Ralph Nader School of Deep Political Thought and Justification for Why He Ran.
I hate Geithner as much as the next person, but did you really expect him to say that we’re in a death spiral and we’re all doomed? Of course he’s going to put a happy face on things.
As Carter found out after the “malaise” speech, Americans can’t be told the truth because we freak out and start running around looking for someone to blame for the problem rather than trying to, you know, fix the problem.
Geithner was Obama’s first, and by far hugest political mistake after he won re-election. Geithner’s obvious steadfast loyalty to the same Wall Street crowd responsible for the default disaster is what by far did the most to create an opening for the GOP and tea partiers to get any traction against him with ordinary middle america. The GOP would never have succeeded getting nearly as much traction as they did against health care reform without Geithner setting the table for initial doubts about the Obama Administration. Few missed the compelling impression that Geithner didn’t merely think it impossible to stop AIG from handing out bonuses, but thought it important to the viability of the financial system that the bonus compensation system remain basically intact on Wall Street, with a few temporary concessions for appearances here and there.
To be fair to Geithner in that article he doesn’t rely on any consumer spending figures for this article. In fact, he makes the point (and it is a good one, I think) that people are saving more which is an important adjustment to the previous borrow-and-spend economy.
I believe it. I am with “The Geithner”. Cole is a dolt.
It’s probably not the time/place to wax philosophical (so to speak), but there have been so many times in the last two years – hell, the last 20 years – that I wish the Rethug leadership would have a Colonel Nicholson moment.
But that would require them to think about something other than their own power, and that of their corporate friends.
I think Rahm E and Ben Bernanke are strong candidates for the worst decision also.
It’s hardly a surprise that Congress is going to to next to nothing until the November elections. That’s how it always works.
Where the Democrats really fail in this is that they haven’t yet figured out how to tie the economic crisis and the failure to do much to the Republicans. They’ve tried “Party of No” but the Republicans and their followers are proud of that moniker. They need to try something like “Republicans are the Party of Screw You, Average Person – We’re Protecting Our Rich Friends.” It’s a little too long to be pithy and memorable, but something along those lines, that would actually stick to the GOP, is the best hope they’ve got.
Bad time to move away from “borrow and spend.” That way lies a second recession.
Even if they do deal with the short term financial problems, there are bigger issues headed our way:
I find the cynicism appalling, but when you got idiots like Ed Shultz telling folks to sit out this election, why mess with success?
As Atrios posted this morning, he blames unemployment on the workforce not having “21st century skills.” So I guess we just have to teach a bunch of people Photoshop and we’ll be back to full employment!
@roshan: Woah, the opinion piece without data says one thing, but the article with data says the opposite! Seems opinions are easily formed and followed and facts are disposable.
WTF is a 21st century skill? The ability to use email? I’m sure wave of unemployed 50 year olds are just loving the idea of getting an IT degree from Devry….
Snark detector fail, no issues though. Carry on.
My wife hates Geithner, and I am one of those who joined the original “fire Tim Geithner and Larry Summers now” club, but he is pointing to actual accomplishments. However, of course, but for his own neo-liberalism and Rubinism, he would have done more and targeted it at improving working class and middle class balance sheets (although large tax rebates are not the best “stimulus” in most cyclical recoveries (in fact are probably the worse), this one, being a “Minsky” moment was one where they would have helped long term improving the balance sheets of both consumers and debts by paying down private debt and reducing bank assets (thereby improving the banks capital to asset ratios without giving the banks lots of free money to pay themselves bonueses with). As Atrios points out, he still does not seem to have notice that there was a huge housing bubble and crash, with the disappearance of 8 trillion dollars of wealth and that the HAMP program has been a disaster.
These neoliberal blind spots are not just Geithner’s and Summers. President Obama, despite his many strong points and talents, President Obama (an adunct faculty member of the University of Chicago Law School and friend of Judges Richard Posner and Frank Easterbrook), is a neo-liberal. He campaigned on the economic right during the Democratic primaries using the old neo-Liberal tropes of improving the average standard of living with improved education and basically endorsing the free trade policy of the last 30 years. Also, as a Columbia and Harvard man, he is a little to impressed with his fellow Ivies degrees, and not noticed the responsibility that Rubin and friends had for laying the groundwork for the current crisis during their time in office in the 1990s. Those decisions were:
1. Giving primacy to creditor interests in both the Mexican and Asian debt crises and using the IMF as a collection agent, imposing harsh austerity and motivating any developing country (see China,) to run an export based growth strategy that would build huge surpluses of dollar reserves in order to avoid this fate.
2. Not at least using words (and probably interest rates) to prevent the dot.com bubble of 1998-99). Instead, they told themselves the market fundamentalist lie that if the stock market thinks a firm is worth 100 times earnings (or in cases where there were no earnings, an infinite amount) and the resulting crash.
3. Financial deregulation, both repeal of Glass-Steagall and the Gramm-Leach bill. Blocking B. Born from regulating derivatives at the CFTC.
4. Poor anti-trust enforcement allowing formatio of oligopolies in most industries.
5. The NAFTA and the WTO admission of China. (From a political view point, the NAFTA treaty in 1994 – nothing did more to depress Democratic turn-out in that election then this action. And the admission of China, without China agreeing to give up its dollar peg, along with strong dollar policy resulting from 1 and 2, eviscerated manufacturing in this country and led to the out pouring of goods and services jobs from this country).
6. A failure to recognize that the internet and low cost telecommunications services would put not only manufacturing but most back office service jobs in direct competition with developing nation labor rates.
Carter’s malaise speech was widely praised when it was received. But after a few decades getting digested by the Might Wingnut Wurlitzer, we’re only allowed to remember it as one more indictment against him.
The fact is that we’re in a shitty economy right now and everyone knows it. Putting a happy face on a shitty economy makes you look out of touch and incompetent. Screaming, “Everything is fine! Quit your bitching!” is a classic Republican tactic.
The American public is more than happy to hear bad news, make sacrifices, adapt, and recover. But when they have the misinformation engine flooding the airwaves with distortions and lies, it becomes difficult to have confidence that we can fix the situation we’re in. Republicans have spent fifty years working to kill that confidence.
No one with any sense of history is dusting off the sheet music for “Happy Days Are Here Again”.
For years Americans didn’t save a penny. Now they have to. Consumer confidence has fallen? Better to say common sense has prevailed.
CALL TO ACTION!
One Progressive’s Nat’l Scheme To Burn Confederate Flags At Tea Party Rallies
It might help the economy, just saying.
Don’t these reports pretty much mean that supply side doctrine has lost the argument? If supply siders were right, we should not be looking to consumer confidence at all, right? We should not be having a recession right now..
Someone better whisper to Timmah that rising corporate profits and bigger than ever bonuses on wall street don’t necessarily reflect a healthy economy, prosperous economy.
What a fucking joke this country can be sometimes. Joe Scarborough telling people that he’s a real American, an average palookah on one media outlet and then on another (Top Chef) waxing nostalgic for the good old days of Congress when lobbyists could treat him dinners of giant steaks, 4lb lobsters, fishbowls of red wine and giant cigars. And people will dutifully listen to him when he runs down why wealth concentration is a good thing for the real Americans.
We should not be having a recession right now.
40 years of supply side economic theory and the wealthiest 1% have tripled their incomes and the median wage has stagnated (or regressed depending on the metrics). I think it’s worked exactly as envisioned. Trickledown was what hid the magic trick.
I’m sorry, did I miss something? what in the op-ed are you guys bashing Geithner for? He’s stating where we’ve been, what the administration has done, acknowledgment that recovery is slow, acknowledgment that this info is “cold comfort” to those struggling, etc.
And I never understood why anyone thinks Geithner, bernanke, and Rahm are Obama’s worst mistakes. Are members of congress deliberately tanking Obama’s agenda because of these three appointments? Did his poll numbers tank because of the appointment of these three? You may think his policies would have been better if he had chosen liberals for these positions, but why in the world do you think those policies would have passed with this congress?
Would be nice to see Obama finish his first term before people declare his best and worst decisions ever.
uhm, hell no.
J sub D
Because they control both houses of congress and the White House. They’re un-fucking-stoppable.
Do not construe this as an endorsement of GOP economic policies of the recent past (this century).
Wikipedia, on supply-side:
Liberal pussies. (I mean the other sort)
Obama is truly wasting his time and his health. He’s talking to the walls. This country is hellbent to commit suicide.
@Zifnab: Carter made the mistake of being honest with the American people. People say they want honest politicians, but when politicians are foolish enough to believe that… they get punished.
You can ask Walter Mondale about that, too.
Maybe somebody in Carter’s administration could have talked about ‘malaise’… but the president himself? Hell no. Nobody wants a president who’s a turd in the punch bowl.
As for the economy… it just ain’t going to get appreciably better until average working people get rid of this unbelievable debt burden, one way or another.
One way – the way that seems to be the Obama administration approach – is to just let it take care of itself and not do anything too drastic.
This means, to me at least, 7 years or so as people slowly work their way out from under this debt load. Bankruptcy, paying down debts, stabilizing their finances one way or another. That’s all disposable income which is going to the thieves and scum who cooked up and profited from the housing and credit bubble.
THEN… these people will need to rebuild their savings (if they are sensible). Where is the consumer spending which is 2/3 of our economy going to come from? More easy credit? Why doesn’t the Obama administration grasp this?
The main problem with G. isn’t that he’s not a liberal. In many respects, perhaps he is. The main problem is that he is a whore for the financial sector.
@roshan: While I do not care for your epithet, I agree with you. Why is there no desire to get in the face of these creeps?
You can’t get the media to cover a few million people marching against the war, but five guys burning a confederate flag would get hours of coverage. Coopt the ‘Don’t Tread on Me’ flag by carrying it as well, and remind people which side of the Civil War the British Empire was supporting. Let the teatards defend the flag of treason. Make them defend it or deny it.
We need to knock these people back, give them a slap, put them on the defensive. I don’t expect liberals to do these things, after all, they are liberals. But this snottiness about the people with the guts to fight back is really annoying.
You’re right…there’s always Summers (who has much less nominal power than G, but perhaps a lot of influence) and the idiotic decision to poor more blood and treasure into Afghanistan, when any thinking person knows that nation-building efforts there are bound to fail.
Tax cuts for the rich and $200 stimulus checks to everyone else.
I’m not an economist, but these two pieces don’t seem to be contradictory. Geithner is talking about “growth.” The other report has to do with spending by consumers. Growth is good, but growth doesn’t necessarily put more money in more pockets, as we’ve seen in every report on how the recession — a technical phenomenon defined by “growth,” IIRC — is over but people are still hurting. Growth that leads to money being parked and idled rather than circulating in the economy would not manifest itself as consumer spending.
Or, to be brief, Geithner isn’t saying at all that the economy is good for average people. He’s saying that it’s growing. Channeling that growth into better lives for average people is a matter of policy and politics, and it doesn’t seem like he’s unaware of that.
BWD – so good to see you here. I read your stuff on Dkos all the time but never get the chance to tell you how much I enjoy it cos I’m not a member.
In my despairing moments I agree with what you say – Obama’s just banging his head against the wall trying to govern a bunch of idiots. I sometimes feel that any minute now he’s going to hold a press conference in the Rose Garden and say “fuck it, I’ve tried and tried but you guys are just a bunch of idiots. I’m outta here!” – I would have some sympathy for him if he did do that.
Nevertheless he still keeps going, trying to change things one step at a time. To extend his car analogy that he used brilliantly yesterday, if republicans are the ones trying to grab back the keys as soon as the car hits the blacktop, some on the so-called progressive side are basically getting out and walking cos they don’t think the car’s travelling fast enough….
Clearly, this is all Ed Schultz’s and Jane Hamsher’s fault.
(runs away from internet fire)
I like this part:
Where he equates “bank rescue” with TARP, leaving out the many other ways that the Treasury and Fed are handing money over to the financial sector.
what a ridiculous piece of tripe. it’s just to easy to blame all your own complaints on this stupid meme that appears to be driving progressive rage against possibly the most liberal president the US has ever had.
I’m referring to Geither, and yes, Geithner is undisputably a whore for the financial sector.
As for Obama being the most liberal president ever, who are you kidding? FDR and LBJ were clearly more liberal by any reasonable measure. And it’s not even clear that Obama is more liberal than Clinton; they seem to be about the same, ideologically.
Obama is at best a centrist.
Incomes for most people were flat over the past 10 years. This is the return of the Bush Boom years!!!!!
Having an on going media spectacle which eats up news cycles and attention off the teabaggers doesn’t hurt the economy a bit. Their message and clout is pulling the DC elite towards all the bone headed decisions about the economy. That needs to be stopped.
Yes, thank GAWD he appointed highly respectable, non-idiotic people like Geithner and Summers.
J sub D
Fannie and Freddie anyone?
… Just my >$.02. Sometimes I think we are a retarded nation… The evaporation of wealth in the housing debacle was certainly one of the most widespread and dramatic examples of wealth destruction that this country has EVER seen. It will take at least a decade for the effects to really shake out and the best first steps would be to immediately wipe out and write off all housing real estate related debt, let the investors take a bit of a bath and let homeowners recover. Companies do this all the time and really, the banks are just holding onto distressed property and not earning anything anyway. Next, you put in place a national policy on housing that prevents asset bubbles in residential RE and you get that heavily regulated so people do not earn, nor expect to get 30% YOY increases and all the financial manipulations that go along with it.
And then you punish rural America by reinvesting in urban to urban, edge city to edge city connections and infrastructure where the jobs, the people and the innovation are going to be born, not way out rural towns that suck up tax dollars.
Cities have been ignored for the past 30 years by a Republican party more interested in catering to rural idiots and city MSAs GENERATE the WEALTH of this nation. The farmers will be okay as people have to buy food, but we need to rethink new options for better food transport and regionalization along with a new economic model that does not demand unrealistic growth measures. In other words, we are a maturing, stable nation where most people have their material needs met so demanding huge growth numbers is not feasible.
That, plus as head of the NY Fed, he was partly responsible for the disaster. (Not nearly as much as other folks like Greenspan, but still.)
Do you have a bank account? A mortgage? A loan?
Then, you too, are a whore for the financial sector.
Geithner isn’t a financial sector guy because he’s secretly a Wall Street crock masquerading as a liberal to confuse you.
He’s the way he is because he recognizes that Wall Street, the banks, own us, because we let them, and there’s really no way to change it, so we work within the means of reality.
@J sub D:
Exactly. Not to mention shit like the FHA. When I first heard about the FHA stepping into the breach, I thought to myself, oh noes, I’m getting screwed again. Or, giving the banks what are essentially interest-free loans (IIRC one of the biggies had a _negative interest_ loan for awhile) that they turn around and partly invest in treasuries. Or the Fed’s balance sheet itself. Or…
Dude, I live in California, where we’re falling apart at the seams because we don’t have enough tax revenue to meet the obligations that voters put into the state constitution and people are still screaming about their fucking taxes being too high.
I’m sorry, but I have no faith in the American people acting like rational adults anymore. I just don’t. The Republicans promised them two Santa Clauses and they really think they’re going to show up any day now.
I’ll take that as a compliment, given that you’re the blithering idiot who claimed a couple weeks ago that post-bubble Japan was beset by high inflation.
Yep, nothin’ more liberal than locking people up for being of Japanese descent and structuring Social Security so most black people wouldn’t be able to participate.
Of course there are ways to change it. They all involve fundamental restructuring of the FIRE sector, and they all involve decreasing parasitic rent collection by the FIRE sector. (Given your egregious lack of understanding of Japanese economic history, you probably don’t understand what “economic rents” are, either.)
If you want to make the case that particular proposals are nearly impossible (a good example would be taking us off a fiat currency), then that’s reasonable. If you’re making the case that we’re stuck with FIRE taking a huge chunk of national income far in excess of the value it contributes, then you’re simply a whore for the financial sector yourself.
If you don’t care or are too ignorant to adjust your measure of liberality for historical circumstances, then I can’t help you.
Yes, let’s tell the American-born, American citizen nisei who were imprisoned that it was no big deal — just historical circumstance. All of their farms and businesses lost? Sorry, we’re going to overlook that little historical circumstance so we can keep FDR on his pedestal as a champion of liberalism.
@liberal: I should’ve been more specifically there’s nothing REALISTIC that can be done. Certainly, we can solve the problem by completely dismantling and restructuring the financial system…but the second that happens, the shockwaves will put a quick stop to it.
I had said that post-bubble Japan got to where they were because they WERE AFRAID OF HIGH INFLATION. Do you read?
so when is it ok for a President to do something as egregious as locking up an entire ethnicity or start a war based on a lie and STILL be called a liberal? When it’s not Obama doing it?
Death Panel Truck
Jimmy Carter’s big mistake was assuming that Americans were adults who wanted to hear the truth. But we didn’t want to hear that we had problems. We wanted a daddy to tell us everything was fine ‘n’ dandy. That’s how we ended up with Reagan.
Americans have a capacity for self-deception unsurpassed in the history of the world.
Why don’t our current “historical circumstances” likewise get Obama off the hook for you, then? Our own historical circumstances include roiling xenophobia, a toxic news media, and at least 30 years of deprecating “government,” all of which have converged. Under these conditions, you could certainly make a case that Obama is scoring pretty high on the liberal-o-meter. Your historical-circumstance adjustment factor is a fine idea, but it needs to be applied to all presidents, no?
@Death Panel Truck:
When it comes to self-deception, we’re number 1! U-S-A! U-S-A!
@Mnemosyne: Nothing in my life has ever moved me as much as the Thick Black Line in Little Tokyo in Los Angeles. It is a memorial that shows every business in a block of the area…and a thick black space of brick showing a gap where the Japanese occupants were forcefully evicted by the federal government. And if a business occupied that space during that dark period, it is also noted. We should not ignore our past just because it was unpleasant. Nor should we be blind to what we have done now.