Here's one reason why Geithner is a great choice:

[Zynx]

http://www.portfolio.com/views/blogs/market-movers/2008/06/09/geithners-plan-to-revamp-global-financial-regulation

"Tim Geithner has an important article in the FT today, headlined "We can reduce risk in the financial system". He's entirely right, and his proposals are entirely sensible. Geithner was one of many regulators who warned about the credit bubble while it was inflating, and although they didn't manage to prevent the credit crunch, global regulatory authorities in general have clearly emerged over the past year as being part of the solution rather than part of the problem.

And when you look back over the history of global financial crises, from LTCM to emerging-market meltdown to Bear Stearns, there's one constant: the involvement of the New York Fed. So Geithner speaks with some authority when he says that at the moment it's difficult "to mobilise liquidity across borders quickly in a crisis" and calls for a unified regulatory framework rather than the current patchwork quilt both within the US and around the world which makes regulatory arbitrage and jurisdiction-shopping far too tempting and easy for global financial institutions. (One obvious case: ICE.)
"

He's on our side, people.

[RoyGBiv]

1. Indeed ...

I, for one, am thrilled so far at the kinds of choices Obama seems to be making with his economic team.

[Zynx]

2. I agree. I don't want him choosing a bunch of 20-somethings who have never seen anything

outside a textbook and their own ideologies.

[amandabeech]

4. If he does that, we're likely to be burned toast. n/t

[amandabeech]

3. Great. What's his plan to get things going now?

What's being tried, which I imagine he has some hand in creating, isn't working.

[RollWithIt]

5. How do you know it's not working? Fiscal movements takes quarters, not months....

I'm not saying it's working either, I just think that these things take time and saying it's not working is short sighted.

[amandabeech]

I don't think that we have much more time.

The Federal Reserve has been in action since February, if not before.

The TARP looks to have been ineffective in getting the credit markets moving, and I don't think that we have much more than 6-8 weeks before things really start to fall apart, particularly if the auto companies go into bankruptcy.

I don't know how old you are, but I'm 53 and this is by far the worst that I've seen, including the oil shocks and the Reagan Recession.

Back then, at least, people seemed to have some idea of what to do, but this time, I sense panic at the top. I wasn't alive in the Great Depression, obviously, but my parents were, and my mom is worried like she wasn't previously.

Please tell me either why we don't have to get things going very quickly, or why we already have things in hand.

[Zynx]

6. That's like saying after surgery, "Why do I still feel like shit?".

Total disaster has been averted so far. Believe me and anyone who follows these things closely, total disaster has been possible nearly every day for a year. We have contained a lot of damage. The problem is that the damn simultaneously sprang about 950 leaks.

[amandabeech]

8. I don't see the credit markets opening up. Or am I missing something?

I've been following it pretty closely myself.

What is your definition of total disaster?

I think that the breakdown in the credit market is pretty damned near close, and I don't see that improving at all despite Bernanke's recent, very carefully worded pronouncements.

What am I not seeing?

[Zynx]

10. The Federal Reserve has, through its facilities, managed to reliquify some

parts of the commercial paper markets. If they had not, we would already be in worse shape than we are. Had it not been for the numerous Fed interventions over the last year, I doubt we would see a single major bank left standing at this moment. The entire system would have already imploded. It still might, but we are not there yet. Lending will not recover for some time as it rarely does in the pit of a recession. However, overnight lending rates have plunged from their highs.

Don't get me wrong, things are certainly not great, but they certainly could have been worse. Imagine if we had just sat on our duffs while Bear imploded in March, or when Fannie and Freddie collapsed, or when AIG with its massive influence on global financial markets disappeared. If these facilities had not freed up credit to some extent, even presently solvent banks would not have been able to achieve some measure of liquidity.

Saying these measures haven't accomplished anything is just like blaming the New Deal for not reducing unemployment fast enough. In 1936, you could have said, "Unemployment is still 14%. We've spent all this money and this is where we still are."

The fact of the matter is that at the very least they have slowed the bleeding to a pace we can at least survive, though with the deepest recession in most people's lifetimes. There is no easy fix to this. There simply is no such thing out there. Geithner and the Fed have not done badly at all given the circumstances. They were handed something that was beyond most economists' basic understanding, much less their ability to tackle it.

[amandabeech]

11. Thank you for posting.

I now recall some of your previous positions, so I will take what you write with a grain of salt.

Surely, there were some economists who saw some of this coming. I hope that Obama and Geithner seek them out and put them in top positions even if they have no current ties to the Democratic shadow government.

[SlowDownFast]

16. "I now recall some of your previous postings"

Me too.

I explicitly remember these posts from Zynx last year.

Last year, Zynx scoffed at the idea of an imminent major financial crisis/market crash and/or Great Depression.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=2753737

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=2755820#2761809

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=33245#33261

Take what Zynx says with a block of rock salt, when he speaks of things economic.

[SlowDownFast]

15. "I don't see the credit markets opening up" -

Correct.

In fact, financial institutions given TARP money have been hoarding it. That's not to speak of TARP money going for Wall Street bonuses. Is anyone here really surprised that this is happening?

http://www.marketwatch.com/news/story/so-far-little-evidence-tarp/story.aspx?guid=DCFCB88E-3FC0-4369-A7B6-D193F722DCBF

http://www.time.com/time/business/article/0,8599,1853846,00.html

http://www.webguild.org/2008/11/bailout-money-used-for-wall-street-bonuses.php

Geithner's close involvement with Paulson and Bernanke coordinating the Bailouts is proof that his appointment will be the equivalent of letting the Fox guard the Henhouse. Congress is now conducting an investigation and is demanding the transparency that the Fed promised with TARP. Currently, the Fed is denying Congress that transparency by refusing to release information on exactly where TARP money has gone thus far. Incredible!

Further, failing financial institutions should have been left to fail. That's the only way get this crisis over as quickly as possible. Tinkering with the market and giving taxpayer money to bailout these crooks is just worsening and prolonging the pain, and will leave debt slaves of generations to come.

[girl gone mad]

12. It's pretty clear that the way they have addressed this crisis..

has made it worse.

Letting Lehman fail was a mistake and Geithner was in on that decision. Treating the crisis as one of liquidity instead of solvency has cost time. TARP was a mess and a wasted opportunity. Speaking of LTCM, Geithner had a large hand in that deal, but I can't see that he learned much from it. He has repeatedly done what Wall Street asked him to do. My impression is that he's on their side.

[SlowDownFast]

18. Well said.

The folks cheerleading Geithner's appointment suffer from election euphoria (whatever Obama says/does MUST be divine) and/or know nothing of what they speak of.

If they did even a little of their homework, they might come to their senses.

Geithner as Treasury Sec is akin to the Fox guarding the Henhouse.

[SlowDownFast]

19. delete

delete

[davidpdx]

7. CNN just had a nice profile on him

I didn't know who he was, but he sounds like a very good choice.

[Rosa Luxemburg]

9. My husband is now calm, he was jumoing up and down last night!

He was screaming we don't even have a treasury sec. but now we do and the stock market went up late today!

[eridani]

13. If he basicially favors re-regulation, then I'm fine with him n/t

[uponit7771]

14. If he favors SMART regulation then he's cool

[mucifer]

17. It also helps that he's from public sector NOT private sector.

[SlowDownFast]

20. This from someone who posted these economic wisdoms last year:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=2753737

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=2755820#2761809

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=114&topic_id=33245#33261