An Inauspicious Start for Geithner

Geithner discusses financial crises with Senate Budget Committee in Washington

I was moderately positive on the nomination of Tim Geithner for Treasury Secretary, giving him a “B” when I graded Obama’s appointments. Since the appointment, however, he’s been less than impressive.

Last month it was his little tax problem. No big deal. I’m sure there would be no negative ramifications if any of the rest of us owed $17K in taxes and interest from five years ago.

And, let’s not forget that he was the author of the original TARP plan, which did basically nothing to get banks lending again.

Last week, he returned to Capital Hill to lay out his latest financial rescue “plan”.

Half of the problem in our economy is a lack of confidence. To get past this, Americans need to believe that the Obama Administration has a clear, focused plan to get the banks lending again.

Geithner’s vague half-answers certainly did not accomplish this. For instance, watch Geithner dodge and weave in front of the Senate committee on February 10th.

No, it’s not particularly reasonable that he be expected to have all the answers after so short an amount of time on the job. It was the Obama Administration, however, that set the expectation that he would give straight, clear answers to Congress.

It seems that Geithner is trying to take the middle road between failure and nationalization. As Japan discovered, this leads to so-called “zombie banks”: banks that are technically solvent, but are either unwilling or unable to lend.

I have little doubt that Geithner knows that nationalization is the correct and only path (if you discount letting the banks fail), but no one in the Obama Administration seems to be brave enough to say it.

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