Right now America needs its whipping boys, and the while bankers are the easiest of targets right now, Mr. Geithner does exert a tremendous amount of influence and is thus naturally the target for much of the ire. Economists from the left and the right are on the attack, even 90 days into the job. I became curious about Sir Geithner's own background and after some digging, and by digging I mean googling and wikipedia'ing, there were a few standouts that definitely secured my faith in both Geithner and the choice of keeping him around. A few points:
1) The whole idea that he is not 'exciting' or 'charismatic' enough is absolutely insane. Are you fucking kidding me? I think the American public has become a little too used to Obama's rhetorical flourish. Do people even remember what Paul O'Neill looked like? Do you remember John Snow's crazyass eyebrows? These men were not particularly memorable, and the position does not demand it. I want the head of my banking sector and planner of the economy to be the most boring guy around. The guy who is excited about analyzing capital ratios, the guy who would much rather be reading Cecil Pigou / Adam Smith debates than at a Yankees game boozin' in the box and making us all laugh.
2) Have you read this guy's background? Forget Dartmouth, his dad was the Director of the Ford Foundation's Asia program. He grew up in Zambia, Zimbabwe, India, and graduated high school in Bangkok! (Fun Fact: His Dad met Barack Obama's mom in Indonesia years back as part of a microfinance initiative). He speaks Chinese and Japanese. Please do not forget that China is currently America's sugar daddy, and while our marriage has worked out so far and China still wants his trophy wife, he might one day find a younger, hotter commodity to spend his money on. We need someone exposed to that part of the world, with legitimacy, to make sure any such troubles or transitions are orderly.
And can you imagine Geithner and Obama talking during the hiring process? "Hey man, were you beat up by the local Asian kids for being an American?" "Sweet, so was I. Let's talk banking." When we elected Obama, we gave a mandate for more a more worldly administration full of people with real international experience, and we got it.
3) I think the "Bank Stabilization Plan" as it stands is the perfect strategy. The Krugmans are strongly calling for some sort of receivership or nationalization of insolvent institutions. What I have never quite understood is that the Geithner plan does not preclude this from ever occurring. It rather lays out a specific attempt at revitalizing the troubled market, and if, even with all the government support, an institution is deemed insolvent rather (than just a liquidity issue), then have Sheila Bair grab Vikram Pandit by the nuts and twist away. The only real argument has been the urgency of the "moment", but I feel a more cautious strategy that leaves nationalization as the last resort will be deemed much more legitimate. The worst outcome we could have would be a nationalization deemed by the market and public as illegitimate, completely negating any progress we've made.
4) The idea that Geithner is in "bed with his Wall Street buddies" is both ridiculous, and somewhat visually troublin. The guy could've easily left at any point and joined the revolving Rubin-esque door and made millions. But he didn't, he stayed in public service. Admittedly, the NY Fed is not paid like a non-profit, but he could've made many times more at any bank with his background and he chose not to. That very decision should give him the benefit of the doubt in decisions like the AIG bonus brouhaha. The fact is, he did not realize the political implications of the bonus issue because he was concerned with much broader issues regarding the survival of the banking industry. If anything, it should indicate a serious approach to the problem rather than a pandering, political approach.
Bonus: For any of you who have read this entire entry, I am in a coffee shop and there is a apartment broker negotiating with a potential tenant, but spending more time trying to ask her out. He definitely did say "there's a gym right down the block, but you don't even need to go you're so fit!"
I like the last paragraph the best.
ReplyDeletei'd hit that
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