Senator Richard Shelby, the leading Republican on the Senate Banking Committee, said that confidence is ebbing in U.S. Treasury Secretary Timothy Geithner after his handling of bonuses at American International Group Inc.
Take a look at what Geitner said in the Wall Street Journal: http://online.wsj.com/article/SB123776536222709061.html#printMode
Monday, March 23, 2009
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3 comments:
I think it is way too early to be making assumptions of the future of Geithner's career. No Treasury Secretary has had as much on his plate since, well, ever. Nothing that's been happening is Geithner's fault, and I think he's actually been doing an admirable job. The plan released today by him and Obama, which details how private companies can buy bad assets for incentives, is a sound economic strategy. Stating that Geithner should be fired already is like saying that Obama's presidency has failed because he hasn't been able to completely fix the economy and the country in his first 60 days.
I don't know if the plan unveiled today is "sound." Paul Krugman wrote a great op-ed on it for today's NY Times. He explains it much better than I can.
I still cannot believe we are not thinking of taking over failed banks. Why are we giving these institutions billions in bailouts and then allowing them to be run by the same morons who ruined them?
There's an economist who works in my office who used to work for the IMF. After hearing him explain the plan to me, I believe it to be sound. Under this plan the toxic assets will be bought up at a low price with the incentive that when the market rises again, as it always does, the companies (including the government) that bought the bad assets will be highly rewarded. If the market does not bounce back, the only entity that loses will be the government. Yes, it's a big risk, but one that has been proven to work in the past. This solution combines the private and public sectors in a joint effort to boost the economy. The only other conceivable solution would be for the government to take over the failed banks. That isn't necessary; government ownership is not the answer to everything.
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