Two moments jump out of Treasury Secretary Tim Geithner's appearance on "The Charlie Rose Show" Tuesday night.
First, Geithner gave a little pushback after Rose brought up the uncomfortable memory of the bad reception that greeted Geithner's much anticipated speech in February that was supposed to provide clarity on how Treasury would deal with the banking crisis.
Now, you're right: expectations got ahead of the policy. And part of those expectations which caused disappointment were the hope that we were going to provide a very generous benefit to the banking system on terms that I didn't think was going to be effective -- defensible for the American taxpayer.
What Geithner is saying here is that the negative market reaction to his speech stemmed not so much from the distressing lack of detail he provided, but from disappointment that there was no overt promise of another no-strings-attached government handout to the banks. That strikes me as tricky terrain for Geithner to maneuver in, since the left-wing critique of his plan to create a public-private market-based strategy for taking toxic assets off the balance sheets of ailing banks is that it is yet another government bailout that is too friendly to the financial industry. But it is still an agile display of positioning: the market crashed, not because of a lack of faith in administration policy, but because of its dismay that it wasn't being coddled.
Geithner also had a pointed response to those critics assailing him on the right, like Republican senators Richard Shelby and John McCain, who maintain that it is time to just close down some big banks, and let the economy recover on its own.
Now there are some people, you're right, who say that, look, we should let this thing burn itself out. And the government should play no role in this context. And I am sure that that would be a catastrophic mistake. And we would consign the American economy with that strategy to a deeper, more protracted recession with more unnecessary damage to the basic fortunes of Americans.
I think it is fair to say that Tim Geithner has the hardest job in the United States of America today. The scope of the challenges facing him is unprecedented, and neither conservatives or liberals like what he's doing. But he soldiers on. He told Rose that the details of the public-private plan to deal with toxic assets will be released in the next couple of weeks. Stay tuned: the feeding frenzy will continue.
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