2011-07-18
Listening to administration officials last weekend, one would think that financial Armageddon's arrival is a certainty. Before anyone buys into that nonsense, I suggest they consider the source.
Mr. Obama and company made it clear early on in his reign that a good crisis should never go to waste. According to Rahm Emanuel, it is an opportunity to do big things that otherwise couldn't be done.
Therefore, we should be suspect of any warning of a catastrophe from Treasury Secretary Timothy Geithner – for instance, the one he claims is ahead if Congress refuses to increase the debt ceiling. He says we must allow more borrowing to finance profligate spending under Mr. Obama. His appearances on the Sunday talk shows each confirm how beady and devious this secretary appears.
You say I'm too tough on Tiny Tim? Consider this:
Prior to his appointment to Treasury Secretary, Geithner was president at the New York Federal Reserve Bank. The New York Fed is the largest of all 12 federal banks, and its president has a permanent position on the Federal Open Market Committee, or FOMC. That president is responsible for the exclusive buying and selling of all U.S. Treasury securities.
In his role, Mr. Geithner was responsible for closely monitoring the banks and their activities in the New York Federal Reserve region. He was charged with the specific task of preventing market bubbles.
The specific language in the Federal Reserve Act of 1913 reads:
Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities, real estate, or commodities, or for any other purpose inconsistent with the maintenance of sound credit conditions; and, in determining whether to grant or refuse advances, rediscounts, or other credit accommodations, the Federal reserve bank shall give consideration to such information.
This is the top priority of every Fed president. However, in no other banks is that priority more critical than in the banks that run the world's finances – those in the New York region. Therefore, Mr. Geithner, next to the Fed chairman himself, is the most important player in the Fed hierarchy.
Even a small peek into the performance of Mr. Geithner at the New York Fed should give any sane person a real reason for pause when considering his ability to identify a crisis, no less solve one as massive as his predictions forebode.
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The very banks under his supervision and regulation became known as "too big to fail," or TBTF, banks. These banks were the very ones that required massive taxpayer bailouts. When the activities of these banks came to light, we found a lethal mixture of over-leveraging, obsessive risk taking and huge derivative positions that, if Geithner and Mr. Obama are to be believed, produced "the greatest financial crisis since the Great Depression."
The man now running the Treasury is the very man who allowed the TBTF banks to get away with financial mayhem – replete with activities more suited for Vegas than the financial capital of the world.
Americans only need watch Geithner's interview on "Meet the Press" to observe how smarmy and devious this man looks. His curt answers laced with dire warnings were so condescending, I'm surprised he didn't just come out and tell the American people how dumb he thinks we all are and how much smarter he believes himself to be.
Last week Geithner hinted he may leave the Treasury to move back to New York and raise his young family. I say good riddance. And don't let the door hit you in the bottom on the way out.
If he doesn't resign, Mr. Obama should demand it. He has not served the president or the American people well with his horrifying "what ifs." To say that the ratings agency will downgrade our credit, when the agencies have publicly stated they may downgrade, is outrageous. It's as if Geithner wants it to happen.
To terrify Americans at a time when confidence is virtually nonexistent is reckless at best, if not downright destructive. Our system depends on confidence.
Right now, we need a steady hand at the helm who will remind the American people who were are: the nation that faced Revolutionary, Civil and world wars. We're a nation that survived the Great Depression and an exceptional nation filled with people who can accomplish anything we set our minds to. Instead, Geithner chose to scream fire in a crowded theater without even detecting the smell of smoke.
But it isn't just Geithner. I was no big fan of Henry Paulson's warnings during the Bush administration. He also always looked worried and played the fear card often. It took three weeks and $85 billion in pork to get the TARP he claimed was needed to save the world. Three times we were told the market would collapse if we didn't get TARP, and three weekends came and went. The markets did drop, but they never did collapse.
Geithner is now replaying the same game.
The American people know what we need. We need massive cuts in government spending and the reform of bloated and overly complicated government programs. We need to balance the budget and live within our means.
Mr. Geithner may be a wonderful husband, father and fellow human being. But what the country needs now is not what he is prescribing.
The time has come for Mr. Geithner to go. Tiny Tim may just tiptoe through the tulips right into a crisis. But it is a crisis that need not happen – just like the crisis of 2007. It's one that Mr. Geithner should have seen coming. And if he didn't, he should have been fired.
Instead Mr. Obama promoted him to the Treasury. Go figure.
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