Timothy Geithner Defends Federal Reserve, Avoids Questions
Alex Newman | John Birch Society
28 August 2009
Treasury Secretary Timothy Geithner gave vague, irrelevant and often misleading answers to some very serious questions during an interview with the Wall Street Journal’s deputy managing editor Alan Murray.
In what the Journal calls a “Digg Dialogg,” interested parties were encouraged to submit questions via the Digg website and to vote for the most popular ones. The highest ranked questions were then asked during a sit down interview at the Treasury department. (The 20 minute video is posted here, or can be watched below.)
After referring to himself as “merely a prop,” the interviewer offered some pleasantries and proceeded to the first question: “Why has the Federal Reserve bank never been audited?” It received well over 1,000 "diggs" (meaning votes) and was by far the most popular question among voters. Geithner’s answer was pitiful at best.
“The Fed, actually, is subject to very comprehensive oversight by the Congress, by a series of external auditors,” he lamented without offering details, before claiming that audits would be dangerous. Geithner noted that he was “sure people understand,” perhaps unaware that recent polls show about three fourths of the American public would like to see the private, reserveless Federal Reserve audited. He continued: “You want to keep politics out of monetary policy.”
Then he attempted to create a link between financial crises of the past and the lack of an independent Federal Reserve, conveniently omitting the fact that America had two central banks with broad powers before the birth of the Fed, and that the biggest crisis — the Great Depression — happened about two decades after the creation of the Fed.
YouTube - Giethner: HR 1207 a "line we dont want to cross"
“But as this shows, there clearly is a group of people out there that feels very passionately about this,” noted the interviewer before proceeding to the next question on the list: “What is your position on Ron Paul’s House Resolution 1207?” Geithner began his answer to the question, which referred to the so-called “Audit the Fed” bill, by stating that the Federal Reserve bank has become more transparent and that certain Fed functions must remain “independent.”
“And that line is a line that we don’t want to cross,” Geithner warned, proceeding to misrepresent Texas Representative Ron Paul’s views about the institution. “Even the sponsor of that bill recognizes how important it is to us to have the Fed independent of politics,” he stated, perhaps unaware that Representative Paul has introduced countless bills to abolish the secretive institution altogether.
The interviewer then asked if perhaps all these concerns indicated that at least the “line” should be moved, to which Geithner responded: “This chairman has gone a long way to open up the workings of the Fed so that people can assess them,” again offering no details, but stumbling on his words.
The next question, number nine in terms of the amount of votes it received, also dealt with the Fed, but was in fact an attack on the treasury secretary. Referring to Geithner’s previous role as president and CEO of the Federal Reserve Bank of New York, and to the Fed’s role in creating a “massive housing bubble,” along with its involvement in a “horribly mismanaged bailout,” the questioner demanded to know “Why are you running the Treasury Department?”
“I’m running the Treasury because the President asked me to do it and the Senate confirmed me for that position,” Geithner responded, evidently missing the point of the question. He went on to name myriad causes he claims were responsible for the current crisis, such as loose monetary policy and low interest rates (which are set by the Fed). “But that was not the only thing,” he noted, possibly realizing he had just confirmed the central bankers’ culpability. “We also had very systematic failures in supervision and regulation.”
The interviewer responded with a very relevant point. “Some people do wonder why, given this history, it makes sense now to give more power to the Federal Reserve as your financial reform bill does.” But Geithner, in typical fashion, avoided the comment entirely and said he wanted to go back to the last part of the previous question — which he did not actually do, instead making a shoddy case for more “powerful” powers and the passage of his reform bill.
After a question about Goldman Sachs and a potential conflict of interest, Geithner responded that he has not ever worked for the firm nor did he own stock in it. So the interviewer proceeded to the next question: “How do you feel about the revolving door between high job positions in the Treasury and Goldman Sachs?” Geithner nodded furiously and twiddled his thumbs while the interviewer highlighted some examples — like the fact that his chief of staff was a former lobbyist for Goldman Sachs and that the former treasury secretary used to actually run the firm.
“These are deeply honorable men,” Geithner explained, adding that the jobs were complicated and therefore it was important to have people with market experience in those positions to “protect the taxpayer” and the interests of the American people. He proceeded to pat himself on the back for the Treasury’s “investments” in failing firms.
The interviewer highlighted some of the bailouts, noting that Lehman Brothers — a competitor of Goldman Sachs — was allowed to fail, while Goldman Sachs and AIG — which was on the other end of some of Goldman’s “credit default swaps” — were both rescued by the taxpayer. He proceeded to point out that Goldman’s chief was frequently on the phone with Geithner and the previous head of the Treasury, Hank Paulson.
Geithner avoided the question and yammered on about being “forced” to do “extraordinary” and “offensive” things to “save” the economy. He continued by offering some fear mongering about what would have happened if the government had not come to the rescue, even mentioning the Great Depression. He omitted, of course, the fact that the government intervened at unprecedented levels during the era, the fact that these actions likely prolonged the depression, and the fact that Fed chair Ben Bernanke has admitted the Fed’s role in creating and sustaining the depression.
Finally, a question that countless Americans have wondered about: “Can you explain why you failed to pay some of your federal taxes in 2001, 2002, 2003 and 2004?” Of course, he didn’t explain. Instead, he danced around the question once again. “You would expect my tax history to be of interest to the American people,” he said, stating the obvious since he is now in charge of administering those very same taxes.
But the next question was about a similar topic: “Giving you the benefit of the doubt — that you are neither inept nor corrupt, but were simply overwhelmed by an overly complex tax code — what recommendations do you have for simplifying the tax code?” His answer was shocking. After offering vague statements about there being “a lot of things” to make it simpler for people to “understand and comply with their obligations,” he offered insight into the progress made so far: “We’re putting in stronger efforts to help enforce the existing laws, collect more taxes, and we’ll be making other proposals going forward.” Quite a suggestion for a man who failed to “comply” with his “obligations.”
Next, the interview moved on to the subject of Geithner’s recent request that Congress raise the statutory debt limit for the second time this year. “This is a very important issue,” Geithner noted, followed by the standard “blame Bush” retort. He noted that the previous administration increased Medicare without paying for it and that America had to fight wars for “national security.”
On a related note, he was then asked “Are you troubled by the massive amount of government spending?” followed by a question about the direction of dollar over the next 10 years. “We inherited and started in office with a deep financial crisis,” he said in a lame attempt to defend himself, noting that America eventually needed to return to living within its means and it would require “exceptionally difficult things.” He continued by blaming healthcare costs for long term deficits and offering a promotion of Obama’s “fiscally responsible” takeover of the medical industry. “It’s a complicated thing to understand,” he explained.
Finally, the interview ended with a question about money being funneled to “obsolete” car manufacturers instead of more “innovative” companies. Geithner responded that the so-called “stimulus” bill had just created “the largest program ever of government support for investment in renewable technologies across the U.S. manufacturing industry.”
The interviewer did a reasonably good job of pressing for answers on a number of topics which are of great concern to the American public. Unfortunately, Geithner refused to offer acceptable answers.
His performance was pathetic.
Editor's Comment: The John Birch Society hopes that many more Americans find Geithner's remarks outrageous, and that the Federal Reserve is both audited and abolished.
SOURCE:
http://www.jbs.org/jbs-news-feed/5279
Alex Newman | John Birch Society
28 August 2009
Treasury Secretary Timothy Geithner gave vague, irrelevant and often misleading answers to some very serious questions during an interview with the Wall Street Journal’s deputy managing editor Alan Murray.
In what the Journal calls a “Digg Dialogg,” interested parties were encouraged to submit questions via the Digg website and to vote for the most popular ones. The highest ranked questions were then asked during a sit down interview at the Treasury department. (The 20 minute video is posted here, or can be watched below.)
After referring to himself as “merely a prop,” the interviewer offered some pleasantries and proceeded to the first question: “Why has the Federal Reserve bank never been audited?” It received well over 1,000 "diggs" (meaning votes) and was by far the most popular question among voters. Geithner’s answer was pitiful at best.
“The Fed, actually, is subject to very comprehensive oversight by the Congress, by a series of external auditors,” he lamented without offering details, before claiming that audits would be dangerous. Geithner noted that he was “sure people understand,” perhaps unaware that recent polls show about three fourths of the American public would like to see the private, reserveless Federal Reserve audited. He continued: “You want to keep politics out of monetary policy.”
Then he attempted to create a link between financial crises of the past and the lack of an independent Federal Reserve, conveniently omitting the fact that America had two central banks with broad powers before the birth of the Fed, and that the biggest crisis — the Great Depression — happened about two decades after the creation of the Fed.
YouTube - Giethner: HR 1207 a "line we dont want to cross"
“But as this shows, there clearly is a group of people out there that feels very passionately about this,” noted the interviewer before proceeding to the next question on the list: “What is your position on Ron Paul’s House Resolution 1207?” Geithner began his answer to the question, which referred to the so-called “Audit the Fed” bill, by stating that the Federal Reserve bank has become more transparent and that certain Fed functions must remain “independent.”
“And that line is a line that we don’t want to cross,” Geithner warned, proceeding to misrepresent Texas Representative Ron Paul’s views about the institution. “Even the sponsor of that bill recognizes how important it is to us to have the Fed independent of politics,” he stated, perhaps unaware that Representative Paul has introduced countless bills to abolish the secretive institution altogether.
The interviewer then asked if perhaps all these concerns indicated that at least the “line” should be moved, to which Geithner responded: “This chairman has gone a long way to open up the workings of the Fed so that people can assess them,” again offering no details, but stumbling on his words.
The next question, number nine in terms of the amount of votes it received, also dealt with the Fed, but was in fact an attack on the treasury secretary. Referring to Geithner’s previous role as president and CEO of the Federal Reserve Bank of New York, and to the Fed’s role in creating a “massive housing bubble,” along with its involvement in a “horribly mismanaged bailout,” the questioner demanded to know “Why are you running the Treasury Department?”
“I’m running the Treasury because the President asked me to do it and the Senate confirmed me for that position,” Geithner responded, evidently missing the point of the question. He went on to name myriad causes he claims were responsible for the current crisis, such as loose monetary policy and low interest rates (which are set by the Fed). “But that was not the only thing,” he noted, possibly realizing he had just confirmed the central bankers’ culpability. “We also had very systematic failures in supervision and regulation.”
The interviewer responded with a very relevant point. “Some people do wonder why, given this history, it makes sense now to give more power to the Federal Reserve as your financial reform bill does.” But Geithner, in typical fashion, avoided the comment entirely and said he wanted to go back to the last part of the previous question — which he did not actually do, instead making a shoddy case for more “powerful” powers and the passage of his reform bill.
After a question about Goldman Sachs and a potential conflict of interest, Geithner responded that he has not ever worked for the firm nor did he own stock in it. So the interviewer proceeded to the next question: “How do you feel about the revolving door between high job positions in the Treasury and Goldman Sachs?” Geithner nodded furiously and twiddled his thumbs while the interviewer highlighted some examples — like the fact that his chief of staff was a former lobbyist for Goldman Sachs and that the former treasury secretary used to actually run the firm.
“These are deeply honorable men,” Geithner explained, adding that the jobs were complicated and therefore it was important to have people with market experience in those positions to “protect the taxpayer” and the interests of the American people. He proceeded to pat himself on the back for the Treasury’s “investments” in failing firms.
The interviewer highlighted some of the bailouts, noting that Lehman Brothers — a competitor of Goldman Sachs — was allowed to fail, while Goldman Sachs and AIG — which was on the other end of some of Goldman’s “credit default swaps” — were both rescued by the taxpayer. He proceeded to point out that Goldman’s chief was frequently on the phone with Geithner and the previous head of the Treasury, Hank Paulson.
Geithner avoided the question and yammered on about being “forced” to do “extraordinary” and “offensive” things to “save” the economy. He continued by offering some fear mongering about what would have happened if the government had not come to the rescue, even mentioning the Great Depression. He omitted, of course, the fact that the government intervened at unprecedented levels during the era, the fact that these actions likely prolonged the depression, and the fact that Fed chair Ben Bernanke has admitted the Fed’s role in creating and sustaining the depression.
Finally, a question that countless Americans have wondered about: “Can you explain why you failed to pay some of your federal taxes in 2001, 2002, 2003 and 2004?” Of course, he didn’t explain. Instead, he danced around the question once again. “You would expect my tax history to be of interest to the American people,” he said, stating the obvious since he is now in charge of administering those very same taxes.
But the next question was about a similar topic: “Giving you the benefit of the doubt — that you are neither inept nor corrupt, but were simply overwhelmed by an overly complex tax code — what recommendations do you have for simplifying the tax code?” His answer was shocking. After offering vague statements about there being “a lot of things” to make it simpler for people to “understand and comply with their obligations,” he offered insight into the progress made so far: “We’re putting in stronger efforts to help enforce the existing laws, collect more taxes, and we’ll be making other proposals going forward.” Quite a suggestion for a man who failed to “comply” with his “obligations.”
Next, the interview moved on to the subject of Geithner’s recent request that Congress raise the statutory debt limit for the second time this year. “This is a very important issue,” Geithner noted, followed by the standard “blame Bush” retort. He noted that the previous administration increased Medicare without paying for it and that America had to fight wars for “national security.”
On a related note, he was then asked “Are you troubled by the massive amount of government spending?” followed by a question about the direction of dollar over the next 10 years. “We inherited and started in office with a deep financial crisis,” he said in a lame attempt to defend himself, noting that America eventually needed to return to living within its means and it would require “exceptionally difficult things.” He continued by blaming healthcare costs for long term deficits and offering a promotion of Obama’s “fiscally responsible” takeover of the medical industry. “It’s a complicated thing to understand,” he explained.
Finally, the interview ended with a question about money being funneled to “obsolete” car manufacturers instead of more “innovative” companies. Geithner responded that the so-called “stimulus” bill had just created “the largest program ever of government support for investment in renewable technologies across the U.S. manufacturing industry.”
The interviewer did a reasonably good job of pressing for answers on a number of topics which are of great concern to the American public. Unfortunately, Geithner refused to offer acceptable answers.
His performance was pathetic.
Editor's Comment: The John Birch Society hopes that many more Americans find Geithner's remarks outrageous, and that the Federal Reserve is both audited and abolished.
SOURCE:
http://www.jbs.org/jbs-news-feed/5279
