This past (Wednesday) afternoon, Paul Krugman published a post on his NY Times blog, “Welcome to the Recovery,” which brings the reader's attention to a stunning (but mostly unnoticed, at least in this community) WaPo piece by Zach Goldfarb on Tim Geithner’s influence in the Obama administration: “Geithner finds his footing.”
First, Krugman reminds us of Treasury Secretary Tim Geithner’s ill-timed op-ed in the NYT, from just over 10 months ago: “Welcome to the Recovery.”
Welcome to the Recovery
Paul Krugman
NY Times Blog (“The Conscience of a Liberal”)
June 8, 2011 2:59PM
… at the time, it seemed tone-deaf to both the economic and the political realities; now, of course, it looks much worse.
But Zachary Goldfarb’s deeply depressing piece on Geithner’s role in the internal economic debate offers some context: it looks as if “Welcome to the Recovery” was aimed not at the nation at large but at the pro-stimulus camp within the administration. No need to do more, Geithner was saying; we’ve got this under control.
Except, of course, they didn’t…
He then notes this brief snippet from Goldfarb…
The economic team went round and round. Geithner would hold his views close, but occasionally he would get frustrated. Once, as Romer pressed for more stimulus spending, Geithner snapped. Stimulus, he told Romer, was “sugar,” and its effect was fleeting. The administration, he urged, needed to focus on long-term economic growth, and the first step was reining in the debt.
Goldfarb continues, in his commentary…
…Wrong, Romer snapped back. Stimulus is an “antibiotic” for a sick economy, she told Geithner. “It’s not giving a child a lollipop.”
In the end, Obama signed into law only a relatively modest $13 billion jobs program, much less than what was favored by Romer and many other economists in the administration.
“There was this move to exit fiscal stimulus a lot sooner than we should have, and we’ve been playing catch-up ever since,” Romer said in an interview.
Some of Obama’s Democratic allies felt let down. Andrew Stern, former president of the Service Employees International Union, said in an interview that Geithner looks at the world “from his experience, which is predominantly a Wall Street, Treasury, fiscal and monetary policy point of view.”
Krugman closes out his Wednesday blog post with this sentence…
… Not what anyone should be saying in the modern world, least of all a top official in an allegedly progressive Democratic administration.
Goldfarb provides us with many rather incredible, sourced comments and observations in the column. It is, IMHO, an extremely important read for those wishing to gain greater context with regard to the President’s statements, positions and overall actions on the economy, to date.
I’ll leave you with another one of Goldfarb’s many observations concerning our current Treasury Secretary and the profound influence that this former, “registered Republican and then an independent” now maintains within President Obama’s inner circle.
...His success at driving the agenda signals his status as the president’s closest economic counselor. With the departure this summer of Austan Goolsbee as chairman of the Council of Economic Advisers, Geithner will be the last remaining member of the president’s original economic team and, with Federal Reserve Chairman Ben S. Bernanke, one of the two remaining architects of the great banking bailout that began in 2008, even before Obama’s election.
Geithner, who was once a registered Republican and then an independent, has a faith in the marketplace that puts him at odds with many of Obama’s traditional Democratic allies, whose skepticism about markets seemed vindicated by the financial crisis…
So, we have a Republican-turned-Independent (Geithner) and a Republican (Bernanke) managing our nation’s economy, as you read this. And, I’m told by a few members in this community that criticism of current federal economic policy is tantamount to “Obama-bashing.”
In response to those sentiments I’m going to repeat something from up above, as stated by Paul Krugman, yesterday. What Geithner and Bernanke are now saying and doing is...
… Not what anyone should be saying in the modern world, least of all a top official in an allegedly progressive Democratic administration.