Geithner: Saint or Sinner?


Did the bailout work? Or was it a monumental waste of taxpayer money? A little of both, maybe?

Some are calling for Treasury Secretary Tim Geithner’s head, but others think he should be given more time to help the economy to improve. As reported by CNN Money, a congressional panel hearing yesterday got heated, with “Republican Rep. Kevin Brady of Texas asking Geithner to consider resigning, citing the struggling economy, ‘frightening’ deficit and extensive job losses.”

But is the $700 billion financial bailout actually working? We sought answers from Main Street Americans, rather than policy wonks in Washington or on Wall Street. Here’s what they had to say.

“Bailout was not a good idea”

Michele Coy Toole, a Little Rock, Arkansas marketing consultant whose husband is general manager of an auto parts distribution company, is not happy with Geithner’s performance, and speaks about political issues on her Twitter feed. She sent the following comment to MainStreet in an email.

“I would have to say that the bailout was not a good idea for four reasons: 1) it increased the nation’s deficit 2) the whole idea of our country is about success and failure. You can't learn from your mistakes if someone ‘takes’ the consequences away 3) it missed with other industries, i.e. aftermarket auto parts. The cash for clunkers took 750,000 cars off the market, which directly impacts the aftermarket industry and lastly 4) It doesn't appear to have worked. Credit is still tight and the U.S. dollar has reduced in value reducing the buying power of average Americans as well as businesses… As for Mr. Geithner, I don't think he should have gotten the job in the first place. I think there are far more people with better qualifications than him (who actually pay their taxes correctly) that could have done a better job. Reviewing his job performance so far, I don't think he has done a very good job. People should be rewarded for performance and I don't see him performing very well at all so far.”

Ms. Toole makes some interesting points, particularly her line about removing the consequences of failure, which seems to many people to be the antithesis of a free-market system. Some of her points, however, are a bit more confusing to me. She seems to be mixing up the bailout and the Cash for Clunkers program, which had little to do with Geithner and was more the brainchild of the Democratic Congress and the administration.

“Secretary Geithner is doing a good job”

“I think Secretary Geithner is doing a good job, and I'm a pretty progressive guy. People say that President Obama should be cut some slack in terms of unemployment numbers, so why not Geithner? We all know that unemployment is a lagging indicator of the economy and because of the President's stimulus package, Americans will find good-paying jobs again. I don't think anyone really liked the bailout. We gave billions of dollars to a lot of people that caused the problem. With that being said, it had a positive effect on the American economy. It allowed small businesses and entrepreneurs to get the much-needed credit to rejuvenate our economy again,” said Michael Suleiman, a 19 year old college student at Rutgers University who is involved in southern New Jersey politics as a volunteer.

Mr. Suleiman's comparison of Secretary Geithner to President Obama seems fair, but his point about small business is a bit off the mark. The bailout has not led to the opening up of credit markets for small businesses or anyone else. Credit is still very tight, as Federal Reserve Chairman Ben Bernanke recently told the Economic Club of New York: "Access to credit remains strained for borrowers who are particularly dependent on banks, such as households and small businesses... Small businesses have seen their bank credit lines reduced or eliminated, or they have been able to obtain credit only on significantly more restrictive terms.”

What do you think of Geithner’s job performance? Tell us in the comments, or on our Facebook page.

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