March 29, 2009

In Defense of Timothy Geithner

This recent article from the WSJ Opinion Journal is of interest as it tackles many of the relevant issues and developments of current global geo-politics.

The piece takes direct aim at President Obama’s rookie Treasury Secretary, Timothy Geithner, by saying the following:


“Mr. Geithner is learning on the job, and yesterday's lesson is that it isn't smart to fool with currency markets when you are already tempting fate with a gigantic U.S. reflation. Treasury and the Federal Reserve are flooding the world with dollars to break the recession, and the world is rightly getting nervous.


Mr. Geithner has been the target of a good deal of criticism thus far, during his short tenure in office, due to his “unseasoned” leadership (read, he doesn’t have grey hair). And for the fact that his public performance while delivering President Obama’s Economic policy prescriptions, have thus far failed to inspire confidence for unstable markets.


“As if the dollar didn't have enough problems, Timothy Geithner took China's bait yesterday and said he was "quite open" to its suggestion this week to displace the greenback with an "international reserve currency." The dollar promptly fell and stocks followed, before the Treasury Secretary re-emerged to say "the dollar remains the world's dominant reserve currency. I think that's likely to continue for a long time.".”


In this author’s opinion, the WSJ article is “piling on” in its reactive treatment of Mr. Geithner’s unprepared comments given during a talk at the Council of Foreign Relations. Just in case anyone has forgotten, the USD, and the US economy had the same problems, and many more, before Mr. Geithner was even a glint in President Obama’s eye.

As a seasoned Technocrat, Mr. Geithner is uniquely qualified to hold the role that he now undertakes for President Obama. He is the former President of the New York Federal Reserve, which is the main organ through which most of the President’s stimulus, and “bail-out” policies are enacted.

As a personage, Mr. Geithner is whip-smart, articulate, and is sensitive to the complexity of modern financial and economic systems.

Perhaps, if the WSJ was equally sensitive to the inherent complexities of the current global economic reality, Mr. Geithner would be well-received as the able steward of economic recovery that he is. And as a result, shaky markets might be less so.

1 comment:

Anonymous said...

I just saw this story linked to in the comments section of the Financial Times - John Gapper's blog.

See here: