Monday, April 16, 2012

For Geithner, ingorance really is bliss

Appearing on Meet the Press yesterday, Tim Geithner made what could very well be the most ridiculous claim of the year. So far.

Host David Gregory asked Geithner if Obama's economic policies could be called "a success story." Geithner responds thusly:
Oh, absolute -- the president inherited, again, as you know, the worst financial crisis since the Great Depression, a crisis caused by a shock larger than what caused the Great Depression. And he did the necessarily, deeply damaging -- deeply politically hard things to get growth started again. And he's done everything he could to convince a reluctant opposition to join him in doing things to make the economy stronger. And we're going to keep doing that even if they're against it, even if they don't like it... 
Absolutely. This president's policies were extremely successful. If you measure what we did relative to the record of the United States in past crises and the record of other countries, history will judge what he did as remarkably effective crisis management at a deeply dark time for the world economy.
First, let's be clear about something: Geithner was all in for the Bailout, the Emergency Economic Stabilization Act of 2008, and was a major architect of the legislation. That Act created TARP, which was used first by Bush's Secretary of the Treasury Henry Paulson and then by Geithner to "bailout" a number of firms including--under Geithner--AIG. Geithner cannot honestly credit Obama with the Act, nor can he--in the face of the evidence--tout the AIG bailout portion as a success.

So, what policies, what actions by the current administration--when it comes to the economy--are responsible for the "success story" Geithner is trumpeting? There's not a lot to choose from. Certainly, he's not speaking of the Green Energy initiatives, involving Solyndra and the like. And he can hardly use unemployment statistics to back up his claim, as we know all too well.

What does he have left? The auto bailout actually stems from the Bush administration (not that it was really the great success many have claimed), which I guess leaves Geithner with the Stimulus Bill as the key piece of legislation for the "success story" of the Obama Administration's economic initiatives. But the evidence of the success here is what? The so-called recovery of the economy, which Geithner is willing to compare to past recoveries, claiming  that "history will judge" the results as "remarkably effective."

"Remarkably effective." The weakest recovery in modern history represents "remarkably effective" policies. Here's an excellent collection of charts from the later part of last year that demonstrate just how weak and anemic this "recovery" has been. And from Freakonomics, here's a good general measure of the economy's real state:


It's staggering, the combination of arrogance and ignorance on display in Geithner's comments. We know the Stimulus was an unqualified failure. We know the recovery has been weak. The only semi-legitimate argument is whether or not that failure was a consequence of the Stimulus being too small (I say "semi-legitimate" because, in truth, a larger Stimulus would likely have exacerbated the debt crisis, thus any benefits it created would likely have been unsustainable, but at least it's an argument).

Funny stuff.

Cheers, all.