Market Talk

You're doing a heck of a job, Geity.

Treasury Secretary Tim Geithner has his supporters, of course. First off, there’s the President. I’m sure, too, that his wife is very supportive of his efforts to restore fix the nation’s economy. Then, there’s, well, there’s…New York Times columnist David Brooks.

Brooks, generally a conservative voice in the paper, came out in support of what’s Geithner’s accomplished so far:

The evidence of the past eight months suggests that Geithner was mostly right and his critics were mostly wrong. The financial sector is in much better shape than it was then. TARP money is being repaid, and the debate now is what to do with the billions that were never needed. It now seems clear that nationalization would have been an unnecessary mistake — potentially expensive and dangerously disruptive.

Accept for a moment that most of that is true, the banks aren’t dangerously listing anymore, that the crisis is over and we’re on the road to recovery. What, exactly, did the Treasury Secretary contribute to that?

I’m serious. Somebody please tell me. Offhand, I can think of the “stress tests” and the PPIP, the Public-Private Investment Program. The first was no more than a thorough white-washing, and the second was just an awful idea that has yet to gain any appreciable traction.

So, somebody, anybody, please point out something specific the Treasury Secretary has done to make things better. Because I certainly couldn’t find anything in Brooks’s hyperbolic column.

Oh, sure, Geithner made all the right statements this week about financial reform. “”No financial system can operate efficiently if financial institutions and investors assume that the government will protect them from the consequences of failure,” he said yesterday.

That’s very true. And if he had made that his modus operandi back when, oh, say, when he was the head of the New York Fed from 2003-2008, the top regulator for banks like Citigroup, maybe he could’ve had a hand in making sure that “Americans are never again forced to suffer the consequences of a preventable economic collapse.” That was the quote he gave yesterday; wonder if he ever thinks about the things he missed during his NY Fed days.

Or maybe when he was working under Robert Rubin at the Treasury Department during the Clinton administration. I dunno, it’s just a thought.

What really saved the banks, which Brooks completely misses, was the suspension of mark-to-market accounting, the Fed’s easy (and we do mean easy) money policies, and an implicit guarantee by the government that no bank that is too big to fail will be allowed to fail.

Actually, the Treasury Secretary may have had a hand in that last one.

(Photo: wikipedia commons)