I can't help but point out with satisfaction that the pilot who perfectly glided the stricken US Airways plane into the Hudson, saving all aboard, is one of those experienced Baby Boomers who has spent a lifetime perfecting his skills, doing something real and productive, rather than pushing financial swindles. He's also a union member. These are the people our economy can't dump fast enough. And we wonder why America is in trouble.
Then there's Timothy F. Geithner, President-elect Obama's choice to be the next Treasury secretary. I've been uncomfortable with Geithner since his selection, chiefly because he has been president of the New York Federal Reserve Bank, the mother ship of the Fed, since 2003. This means he was in a position of significant influence as the financial portion of the Great Disruption was emerging. He apparently raised no alarms or did anything to stop the outright fraud running like a river of manure on Wall Street. He has been, as the New York Times put it, "a central player" in the $750 billion financial bailout. So he was a co-pilot who ditched the financial system, but unfortunately it keeps taking on water and the casualty toll is mounting.
Then there's the wee little problem with his taxes.
Geithner "underpaid" his taxes from 2001 to 2004 on income while he was a senior official at the International Monetary Fund. It's a little complicated — the IMF doesn't withhold taxes, apparently — but you have to wonder: If this guy can't hire a competent CPA how's be going to do with the greatest financial crisis of our lifetimes. Oh, the Treasury Department also oversees the Internal Revenue Service. The poor way the Obama transition team handled this matter, letting it come out now, is a smaller, but still significant concern.
Geithner paid the back taxes and penalties. Yet this made me think more about Geithner. He went to Dartmouth and Johns Hopkins, joining the Treasury in 1988. He spent time researching a book for Henry Kissinger. During the Clinton years, he "was involved in the bailouts of Mexico, Indonesia, Korea, Brazil and Thailand," according to the Times. In other words, he was involved in some of the "shock doctrine" capitalism described by Naomi Klein in her book of the same name. In other words, Geithner is part of the Rubin Financial Establishment that, working with right-wing free marketeers and plutocrats, did so much to set the stage for the current calamity. No wonder he apparently thought everything was fine as the taxpayers bailed out AIG, to continue its bacchanalia of self-dealing, while letting Lehman collapse. That latter event is seen as precipitating a much worse crash.
He is also perfectly schooled in the business-school orthodoxy that would encourage companies to dump employees such as the US Airways pilot as "high-cost liabilities" and "impediments to being nimble and innovative." Innovative like…AIG or Wal-Mart. Funny how all that book learning makes it as easy to dump people without Ivy League educations and New York connections as it does to rationalize financial practices that generations had deemed dangerous and unsustainable.
Obama wants his man, but this is not change I can believe in.
In 1960, when LBJ was telling Sam Rayburn about the brilliant Kennedy people, the crusty House speaker said he would feel better if just one of them had been elected dog catcher. We know where those "best and brightest" landed us. I'd feel better if we had a Treasury secretary who had opposed the quarter century of increasing dishonesty and criminality in our financial system, culminating in a system itself predicated on swindles. I'd feel better if he'd spent a day in his life as a working person, where paying the rent is a big deal and there's no gentle patience on the part of the IRS. Maybe Geithner has real skills, like Captain "Sully" Sullenberger. All I know right now is that liars figure.
Yeah, how about that Chesley ‘Sully’ Sullenberger III!
THAT is an incredible guy.
When does the United States begin taking IMF-prescribed medicine for its economic ills? If our sharpest economic minds presided over the collapse of a system they were incapable of critiquing (at least out loud), what use is their continued stewardship?
Something tells me that entitlement reform will be at the top of their “things to do” list. This will be a fitting capstone to Alan Greenspan’s career. In 1983, he helped bring about a near-doubling of FICA taxes so Boomers’ SS checks would be paid for in advance. In 2001, he advocated rebating the Clinton surplus mostly to the wealthy (generated, in large part, the same FICA revenues) because “it’s your money!” To complete this trifecta, all we need now is to slash SS benefits and curtail any tax increase on the wealthy. When MBAs guard the chicken coop, the foxes take notes.
Obama’s conventional-wisdom presidency will win praise from David Brooks and Larry Kudlow. What it won’t do is deal with the structural inequities in American economic life. Rather, if appearances are any guide, we’ll keep exacerbating the downward slide of the middle class. We’ll do this because the American left is too weak to counterbalance the right’s huge media advantages. Still, Obama may surprise us by co-opting the right’s demonology.
Ultimately, it will be us who decide if our demons are worth the risk of doing too little for the sake of moderation. The pain, after all, is still manageable. Another year, and our focus might sharpen.
Soleri wrote:
“This will be a fitting capstone to Alan Greenspan’s career. In 1983, he helped bring about a near-doubling of FICA taxes so Boomers’ SS checks would be paid for in advance.”
And as we know, SS is a pay-as-you-go system and the increase in FICA taxes went to offset increased defense spending and lower what would have been even more astronomical budget deficits. No benefits were “pre-funded”. The SS Trust Fund has no assets which can be drawn upon. Nothing was saved. Nothing was invested. The government’s own budget docs (especially the Analytical Perspectives section) makes this abundently clear.
And the thing is, Greenspan HAD to have known this. It’s fundamental. He had to have known that he was lying through his teeth, cheating the American people, in order to serve his political masters. So, we can’t even talk about good-faith conservatism here, but must regard the act as something more sinister.
Sorry for the melodrama, kids, but that’s the way it is.