What do you all think about the despicable scenes in congress yesterday where Republicans just started yarning opata to Tim Geithner and attacking all Treasury policies (and by proxy, Obama). Are these guys playing politics or what?

http://online.wsj.com/article/SB125864421370955721.html

Well . . . "despicable" is not the word I woulda gone with but . . .

I thought he didn't handle himself well. Even if the questions were fair/unfair you are a national figure of important significance in these tough times. He shoulda been prepared or did he expect a love-fest? instead of a hard drill?

And of course any criticism of an admin official reflects on the commander chief, and is infact an indirect indictment on him, this has been true for the past 43 presidents, no?

JeSoul:

Well . . . "despicable" is not the word I woulda gone with but . . .

I thought he didn't handle himself well. Even if the questions were fair/unfair you are a national figure of important significance in these tough times. He shoulda been prepared or did he expect a love-fest? instead of a hard drill?

Nah. . . . . if I was Geithner I would have acted the same. . . . those old fools were only there to play politics and Tim refused to play their game.

Imagine these old fools drawing conclusions on Tim Geithner's performance only 3 quarters into his tenure during the biggest financial crisis since 1929. Even a normal recession can take two years to get out of. And when it was pointed out to the old fools that Yankee is officially out of recession, they started yarning megedefegede about the natural resilience of the Yankee economy.

Imagine one of those old fools even telling Geithner and Bernanke that they are sowing the seeds of the next bubble by keeping interest rates low. That was when I knew they were playing dirty politics. Who the phuck would raise interest rates when money supply is so low and Yankee inflation figures over the last couple of months show that there is even deflation?


I think these Republicans are just trying to prey on the common man's naivety of economics.

Honestly!

@Ibime,

I think these Republicans are just trying to prey on the common man's naivety of economics.

Quite the contrary. I think the person who lacks understanding of economics is the govt - Geithner inclusive. Never mind that these are the same people who have acquired so-called knowledge and are academicians and theoreticians.

Economics as far as I am concerned is a matter of common sense. The average American understands that when in debt, the best way to get out of it is to stop adding to the debt whle watching your spending and living within your means. These Economists on the other hand tells us that we have to spend our way out of a recession and a deficit. How in God's name does that make sense.

Here is what Joe Biden said in relation to the above: “Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that's what I’m telling you.” - http://www.cnsnews.com/news/article/51162 Can someone explain to me how that makes sense economically?

These Economists on the other hand tells us that we have to spend our way out of a recession and a deficit. How in God's name does that make sense.

What was that theory again. . .?? Oh yeah, now I remember, Keynesian!!

Geithner was touted as "THE MOST QUALIFIED MAN FOR THE JOB". It has become apparent that Geithner is "THE MOST INCOMPETENT MAN FOR THE JOB".

This is not a witch hunt. . .the guy was the President and CEO of a Federal Reserve Bank under whose jurisdiction the widespread malpractices on Wall Street were allowed to multiply and spread. . . he endorsed them and refrained from throwing regulations at the investment companies, even when it became known that their excesses were intolerable and they needed to be capped. He is as worse running the economy as Rumsfeld was running defense. Kick him out!

Tayo-D:

Here is what Joe Biden said in relation to the above: “Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that's what I’m telling you.” - http://www.cnsnews.com/news/article/51162 Can someone explain to me how that makes sense economically?

If you need that explaining, then you need to go back to basics.

If you remember during the recession caused by the tech bubble burst (and made worse by 9/11), George Bush came out and told everyone to go and spend money. George Bush was right, but some critics panned him.

You gotta spend to get out of recession. Keynesian stimulus and Quantitative easing are only the nuclear options when all efforts to revive the economy fail. FFS, what do you think the Fed is doing everytime they decrease interest rates. They are telling you that it is not profitable to put your money in the bank (cos interest rates are so low), and that you should go out and spend your money to help revive the economy.

When GDP keeps falling, there are two ways to stimulate it - get the people to spend by reducing interest rates. . . and if that fails, get the govt to spend by embarking on public projects.

If Geithner is a fool, then every Central Bank head is a fool, cos as far as I am aware, almost every country has embarked on public spending.

FFS, Roosevelt used to attack Herbert Hoover for spending too much during the depression. It is the usual opposition tactic. Then when Roosevelt became President, he made his name by outspending Hoover and spending his way out of the depression.

Forget story, opposition politicians love yarning opata.

If you wanna query anyone for putting Yankee in a bad debt position, George Bush should be queried on how he turned a budget from a surplus to a deficit. Now when times are hard, idiots are saying Obama shouldn't carry out the only reasonable action to halt the recession based on the debts that his predecessor left him?

The people promoting this "dont spend" policy know the bedlam that awaits if Yankee dont spend. They are just using the deficit to play politics. David Cameron is doing the same to Gordon Brown over here in UK.

You gotta spend to get out of recession. Keynesian stimulus and Quantitative easing are the nuclear options when all efforts to increase the money supply fail. FFS, what do you think the Fed is doing everytime they decrease interest rates. They are telling you that it is not profitable to put your money in the bank (cos interest rates are so low), and that you should go out and spend your money to help revive the economy.

Wow! I can't believe my eyes! For the first time in all the times I have witnessed you discuss Keynesian theory, you make sense with the highlight. . . keyword being "when all efforts to increase money supply fail". Going back to 08/09, was there a need to increase money supply? I say no. The underlying problem was not the flow and exchange of credits but rather the intrinsic lack of trust with the mismanagement of investment products. Investment managers were making profits whether or not their speculations were hitting the target. You place risk in favor of a product turning profitable and then turn around and insure your risk against the product not generating returns. Profitable or not, net - net you get paid. . . but the guy whose money you invested in the risk has only one chance in the odds, its unfortunate for him if the product failed in the market.

The correct implementation would have been for the government to introduce regulations and restore credibility and trust. . rather they patched the problem with Keynesian theory. As it is, the root problem has not been isolated and we see it in the way the banks and investment managers are reinventing themselves to dodge the rules. Geithner failed to control them when he was in NY, he still hasnt clamped down on them now that he is in DC and with a far more superior authority for institutional penalties, including possible jail time for violators.

@Ibime,

If you remember during the recession caused by the tech bubble burst (and made worse by 9/11), George Bush came out and told everyone to go and spend money. George Bush was right, but some critics panned him.

This is the first time I noticed someone from your political persuasion agree that Bush actually inherited a recession.  Thank goodness that Bush didn't follow the Keynesian option which would have led to double-dip recession as we are sure to experience with Obama's economy.

Bush calling for the citizens to spend money is a different ball game altogether to having the govt borrow and spend as Obama is doing.  Citizens spend money to obtain the maximum value from the limited resources they have.  Govt on the other hand spend money to obtain a political capital, giving rise to waste and fraud.

It's funny that there is already a blueprint for coming out of a recession and Obama has chosen to ignore it.  Compare what Obama inherited to what Reagan inherited and check the different approaches with the outcomes we all know and expect today. Reagan inherited double digit unemployment, interest rates and inflation.  He reduced taxes significantly across board resulting in a steady growth of the GDP each year.  This growth was not based on debt that needed to be paid back, but was a reflection of the people having more money left in their pockets to spend and invest to make more money.  That is true growth. 

So just like Obama, Reagan and Bush believed that spending will help the economy get out of recession.  The differece in their philosopihies is that unlike Obama, the other two believed and ensured that the party with money to spend was the people and not the govt!

Negro Ntns, I cant address ya post cos I cant understand it. Its too incoherent. Im not being rude, you're just going off on an incongruent tangent.  BTW, one of the key criticisms the Republican congressmen made of Geithner was his implementation of stricter regulation so I dont know what you are talking about.


@ Tayo-D,

Tax cuts have reached their nadir under George Bush.

BTW, tax-cutting is not a practical immediate response to recession. Its rather a long-term economic policy.

GDP factors in Govt spending and Consumer spending. If you reduce Govt spending (by tax cuts) and 100% of the tax savings are spent by consumers, then disregarding multiplier effects, you have made exactly 0% change to the country's GDP.

All you've done is shift the GDP-weighting of Govt Spending and Consumer Spending from one to the other.

France, China, Britain, Germany, USA, Japan, Canada etc.

Which of these countries did not have stimulus package?

I think I'd rather trust the experts from the central banks.

Negro Ntns,

I cant address ya post cos I cant understand it. Its too incoherent. Im not being rude, you're just going off on an incongruent tangent.

BTW, one of the key criticisms the Republican congressmen made of Geithner was his implementation of stricter regulation so I dont know what you are talking about.

Hey, I understand, you are excused!

@Ibime,

All you've done is shift the GDP-weighting of Govt Spending and Consumer Spending from one to the other.

Exactly what I have been saying. The question is "who shouuld be trusted more to spend money wisely to develop the economy - the govt or the private sector"? I'll choose the private sector anyday!

Tayo-D:

@Ibime,
Exactly what I have been saying. The question is "who shouuld be trusted more to spend money wisely to develop the economy - the govt or the private sector"? I'll choose the private sector anyday!

The time lag for a tax cut policy to take effect is too long to turn around any recession. Besides, it is widely recognised that during a recession, tax-cuts for the rich are less effective than tax-cuts for the poor because poorer people have a higher marginal propensity to consume. Hence, tax-cuts for the top earners is a long-term policy for economic[i] development[/i], not for fighting off recession.

When fighting off recession, we mostly talk about interest-rate policy, fiscal stimulus or increasing money supply (if deflation is a problem). Yankee has done all of these. All thats left is to sit tight and pray to the Gods! 

Geithner is criticised by both left and right. Anyone who has any interest in these matters will know that already. Witness this recent article : http://www.tnr.com/article/politics/the-geithner-disaster

The left criticises him for being in hock to the bankers and the right for supporting for supporting a spending frenzy. For me, the real power behind the throne in economic policy is Larry Summers. Geithner is merely a public face.