Thursday, November 19, 2009

Geithner on the Hot Seat

November 19, 2009 Posted by John at 7:35 PM at Powerline

Treasury Secretary Tim Geithner appeared before the Joint Economic Committee today. One striking feature of Geithner's testimony was how partisan it was. In keeping with the Obama administration's mantra, he repeatedly tried to cast blame on the Bush administration while failing to acknowledge that when the financial crisis developed, he was the head of the Federal Reserve Bank of New York, and as such one of the most influential figures in our financial system. If he saw the crisis coming, or thought that the administration's policies were badly misguided, he had every opportunity to speak up, and his words would have been highly influential. But he did no such thing.
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All right. We've got the TARP. It's supposed to expire. Why won't we let it die a natural death, rather than letting it painfully linger and absorbing tax dollars?

GEITHNER: We are working to put the TARP out of its misery. And no one will be happier than I am...

BURGESS: Well, according to my figures...

GEITHNER: .. to see that program terminated and unwound. And I want to point out that, we are moving very aggressively to close down and terminate the programs that defined TARP at the beginning of the crisis. Now...

BURGESS: Well, it looks like the money is going out with little or no oversight...

GEITHNER: No, that's absolutely not true.

BURGESS: Well...

GEITHNER: The Congress established three separate oversight committees...

BURGESS: Your own special inspector general for the Troubled Asset Relief Program has got several concerns about it. Why not just stop spending on the TARP funds? And why not repeal the program? We don't need it anymore. The American people never liked it. Let's just do away with it.

GEITHNER: Let me just point out the disagreement between what your colleague said and I think what most people across the country understand and believe, which is that, if you look at what's happening in housing, if you look at what's happening to small businesses, this economy still faces tremendous financial challenges.

BURGESS: What's happening in small businesses is people are frightened to add jobs, because they don't know what we're going to do to them in health care. They don't know what we're going to do to them in financial regulation. They're scared of what we might do with energy prices in the future with cap and trade. Small business -- medium sized business is frightened at jobs right now.

I could help the president and his panel. He doesn't need another program. We don't need another stimulus. We need to provide some tax relief and then get the heck out of the way, and the American economy will recover as it has always done.

GEITHNER: That broad philosophy helped produce the worst financial crisis and the worst recession we'd seen in generations. We had a pretty good test of that philosophy -- a pretty good test of those policies that did not serve the country well. Now...

BURGESS: Mr. Geithner, when I came here in 2003, we were in a jobless recovery. Tax relief was passed in May of 2003, and as a consequence by July of that year, we were adding jobs at a significant rate. It seems to have worked fairly well.

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