enlarge

Oh, thank God. I was so worried we would change horses in midstream -- when Geithner's economic guidance has done so much for the entire country:

Treasury Secretary Timothy F. Geithner has told President Obama he plans to remain in his job through the fall of 2012, keeping in place Obama’s longest-serving economic adviser after the first-ever U.S. credit downgrade and renewed fears of a second recession.

Geithner, who has been battling financial crises since 2007 as a top Federal Reserve official and then Treasury secretary, considered leaving the administration after Congress raised the federal debt ceiling and reached an agreement with Obama to tame the national debt.

But several developments have made his departure more difficult. The debt ceiling was raised with only hours to spare. The deal to tame the debt fell short of what Geithner and Obama wanted. The economy has suddenly taken a turn for the worse. And on Friday, Standard & Poor’s downgraded the U.S. credit rating for the first time. And the White House, worried that it would be hard to find a suitable replacement, pressured him to stay.

Geithner told the president Friday morning that he would remain in his post. Hours later, he had to go to the White House to meet with Obama again and tell him the nation would likely lose its AAA credit rating.

On Sunday afternoon, Geithner joined an emergency conference call involving the seven major economic powers to discuss the impact of the downgrade.

“Secretary Geithner has let the president know that he plans to stay on in his position at Treasury,” Treasury spokeswoman Jenni LeCompte said in a statement. “He looks forward to the important work ahead on the challenges facing our great country.”

Geithner tries to spin the debt ceiling deal and answer questions about how cutting spending won't hurt job growth...which makes no sense to a lot of us. I was going to write up a post on this, but Digby covers it rather well, so watch the video here and read her full analysis here:

I have seen some fatuous spin in my day, but this drivel from Tim Geithner is enough to make me gag..read on

So it appears Tim Geithner is leaving soon. Well, his free market principles have hurt job creation and hurt progressive economics so I'm glad he's going, but guess whose name is being bandied around?

Jamie Dimon, Whiner-in-Chief.

FALL EXIT? Treasury Secretary Timothy Geithner would like to leave the Obama administration this fall if economic conditions are stronger and the debt ceiling debate is resolved in a timely manner, according to a person familiar with his thinking.

Possible replacements to be President Barack Obama’s top economic adviser, according to a senior administration official, include Erskine Bowles, White House chief of staff under President Bill Clinton, and Roger Altman, a prominent investment banker and former deputy Treasury secretary.

Jamie Dimon, chief executive of JPMorgan Chase, is considered a strong dark-horse candidate. Dimon has said he is not interested in public office but many on Wall Street believe he would accept the job if asked by Obama. But the White House will have to decide whether Dimon, who leads the most successful bank in the U.S., is too closely aligned with Wall Street.

The news of Geithner leaving has been on the blogs for a few days day and as a joke, guess what came up?

Atrios For Treasury Secretary I promise to hurt Jamie Dimon's feefees regularly and to not establish a government-endorsed predatory lending program.

Let's take a look at Dimon since Obama was elected.

— Jamie Dimon, chief executive of JPMorgan Chase, lived up to his reputation as a fierce defender of his profession on Thursday when he told listeners in Davos, including the president of France, that he was fed up with banker bashing.

Mr. Dimon said at the World Economic Forum that he was sick of “this constant refrain — bankers, bankers, bankers.”

And there's these fine moments of whinery:

Jamie Dimon: Don't be hatin' on bankers when it's all YOUR fault!

You've got to be kidding me, right? Bank CEO wants more politicians in their pockets

Did he really say that?

Wall Street Masters still Whining about Obama's words even after the bail out. It's all GOP for them now

As Digby says;

Yesterday a bunch of us were joking about Jamie Dimon becoming the new treasury secretary when Timothy Geithner departs. It was a lot of fun. Hahaha, how ridiculous would that be?

Very ridiculous.

enlarge

President Obama Addresses the Nation on the Debt Ceiling **
** This mythical address, of course, never occurred. But something like it should have happened a long time ago.

(As Prepared But Never Delivered, July 1, 2011.)

My fellow Americans,

I want to speak to you today about a matter of the greatest national urgency. We face a crisis unique in our history. This threat comes not from a foreign foe or bloodthirsty terrorists, but is no less dangerous and insidious. No, this challenge to the American way of life comes entirely from within. And the damage it could cause is as catastrophic as it is unnecessary.

I am speaking about the looming deadline to raise the debt ceiling of the United States.

On or about August 2nd, the government of the United States will hit the $14.3 trillion limit on its debt. Never in our 235 year history has the United States of America defaulted on its financial obligations. Never has Congress failed to raise the debt ceiling in a timely manner. Never has Congress put the full faith and credit of the United States in jeopardy.

Until now.

In an act of reckless and unprecedented partisanship, Republican leaders in both houses of Congress have promised to block the needed increase in the debt ceiling unless an ever-shifting - and escalating - series of demands are met. At a time when this nation is fighting two wars and slowly emerging from its deepest economic downturn since the Great Depression, only now are Republicans demanding trillions in spending cuts which would slow our recovery, cost hundreds of thousands of jobs, and undermine our social safety net. Republicans insist that any new revenue from any source, even by closing tax loopholes for the wealthiest individuals and most profitable corporation in America, is "off the table."

If those demands are unmet, the same Republican Party which drove this economy into a ditch will drive it off a cliff. That is irresponsible and unacceptable. Congress should pass the $2 trillion increase in the debt limit right now and with no preconditions.

You don't have to take my word for it or even Treasury Secretary Geithner's warning that that default by the U.S. "would have a catastrophic economic impact that would be felt by every American." Back in January, Speaker Boehner himself explained, and I quote:

"That would be a financial disaster, not only for our country but for the worldwide economy. Remember, the American people on Election Day said, 'we want to cut spending and we want to create jobs.' And you can't create jobs if you default on the federal debt."

Economists, business leaders, think tanks and international financial bodies are in agreement regarding the dire consequences which would ensue. Mark Zandi, an economic adviser in 2008 to John McCain warned this week that failure to raise the debt ceiling by August 2nd would mean "I think we go into recession and my forecast would be blown out of the water." Bruce Josten of the U.S. Chamber of Commerce agreed that failure to pass legislation authorizing an increase in borrowing by Aug. 4 "would create uncertainty and fear, and threaten the credit rating of the United States." This week, 235 economists - including six Nobel Prize winners - signed an open letter to Congressional leaders urging them to raise the ceiling, and to do so "without attaching drastic and potentially dangerous reductions in federal spending." And the Standard & Poor's rating agency joined Moody's in warning that "the United States would immediately have its top-notch credit rating slashed to 'selective default' if it misses a debt payment on August 4."

Again, you don't have to take my word for it. Instead, listen to President Ronald Reagan from 1983:

This country now possesses the strongest credit in the world. The full consequences of a default -- or even the serious prospect of default -- by the United States are impossible and awesome to contemplate. Denigration of the full faith and credit of the United States would have substantial effects on the domestic financial markets and on the value of the dollar in exchange markets. The Nation can ill afford to allow such a result. The risks, the costs, the disruptions, and the incalculable damage lead me to but one conclusion: the Senate must pass this legislation before the Congress adjourns.

Ronald Reagan knew what he was talking about. After all, the national debt of the United States tripled during his tenure in the White House. And it would have been even worse had Reagan not raised taxes in seven of his eight years in office. As Alan Simpson, the co-chairman of my Commission on Fiscal Responsibility put it, "Ronald Reagan raised taxes 11 times in his administration -- I was here."

Now, some, like Speaker Boehner, have said that the early August deadline to increase the debt ceiling is "artificial." There are Republican members of both houses and GOP presidential candidates who have accused Treasury Secretary Geithner and this administration of "doomsday predictions that could only materialize at his own hand," of "scare tactics", and of "outright blatant lies." To those who claim that the debt limit need not be lifted and that the U.S simply "prioritize" interest payments on the debt, Secretary Geithner has been clear that "such uncertainty could cause the markets to doubt the full faith and credit of the United States." And the Republican opposition, or at least most of them, knows this to be true. To pretend otherwise, as Senator Jon Kyl is fond of saying, is "not intended to be a factual statement."

That is as unforgiveable as it is cynical.

Continue reading »

DOWNLOADS: (643)

PLAYS: (871)

Embed

TAPPER: So, the administration has had a number of successes after big battles, stimulus, health care legislation, new rules for Wall Street, but you have a big battle coming when it comes to the Bush tax cuts. If they remain in place, as Republicans want, it will cost three trillion dollars every ten years. The administration has said it wants to keep the ones for people who make under $200,000 a year, individuals and $250,000 for couples. That will cost $2.5 trillion over 10 years. Ben Bernanke the chairman of the Federal Reserve said that with the economic outlook unusually uncertain, extending the Bush tax cuts would have a stimulative effect on the economy. Is he right?

GEITHNER: I don't think it should be a battle, Jake. You know, what the President's proposing to do is to leave in place, to extend tax cuts that go to more than 95 percent of working Americans and to leave in place tax cuts that are very important to incent businesses to hire new pe -- new employees and to invest in expanding output. We think that's a -- the -- it's a very strong package. We think it's the right package. We think it's fair. We think it's responsible. Now, we also think it's responsible to let the tax cuts expire that just go to 2 percent to 3 percent of Americans, the highest earning Americans. We think that's the responsible thing to do because we need to make sure we can show the world that they're willing as a country now to start to make some progress bringing down our long -- our long-term deficits.

TAPPER: Don't you think it will slow economic growth?

GEITHNER: No. Just letting those tax cuts that only go to 2 percent to 3 percent of Americans, the highest earning Americans in the country expire. I do not believe it will have a negative effect on growth.

TAPPER: This package that you're talking about pushing in Congress to -- to save the Bush tax cuts for people under $200,000 individuals and 250 for couples --

GEITHNER: And in fact, we go beyond that. Because you know, we're proposing to extend the [...] tax cut which also goes to 95 percent of working Americans. And a set of very important business tax cuts targeted for small businesses themselves, expensing, zero capital gains rate for investment in small businesses. These things, we think, are very helpful, very powerful.

Continue reading »

'
The Gregory Brothers--Smoking Lettuce

Welcome to another game of "You Just Don't Get It": Sunday Morning Edition. Once again the Villagers have decided that they will approach the issues of the day without context, without background and without respect for their viewers. Which is why we'll have Tim Geithner on both This Week and Meet the Press, defending the economy, dismissing why we need Elizabeth Warren on heading the new consumer agency. But will anyone mention that Geithner's sticky little fingers were all over the financial meltdown in the first place? And Newt Gingrich will be on Fox News Sunday wailing and gnashing about the Obama administration, without ever 'fessing up to the fact that it was his party's leadership and policies that put us barrelling down the wrong track. And don't even get me started on the discussion of civil rights and racial politics that Bob Schieffer is presumably leading on Face the Nation. I'll lay even money that at some point during the hour he'll ask the panel if it's possible for blacks to be racist. Like I said, they just don't get it.

ABC's "This Week" - Treasury Secretary Timothy Geithner, New Jersey Gov. Chris Christie.

CBS' "Face the Nation" - Abigail Thernstrom, vice chair of the U.S. Commission on Civil Rights; Michael Eric Dyson, sociology professor at Georgetown University; Cornel West, a professor of African-American studies and religion at Princeton University.

NBC's "Meet the Press" - Geithner.

NBC's "The Chris Matthews Show" - Panel: Amy Walter, Howard Fineman, John Heilemann, Cynthia Tucker. Topics: Will African Americans Stick With Obama This Year? Will This Year's Elections Be an Historic Wave Year, and Is it Better for Obama to Lose Control of Congress?

CNN's "State of the Union" - Berkeley Law School Dean Christopher Edley; author John McWhorter; Mort Zuckerman, publisher of the New York Daily News; former CIA director Michael Hayden.

CNN's "Fareed Zakaria GPS" - Is the United States making any real progress in Afghanistan? What about Pakistan? Find out what the Obama administration's man in the region has to say about the matter. Watch Fareed's exclusive interview with U.S. Special Representative Richard Holbrooke.

"Fox News Sunday" - Former House Speaker Newt Gingrich, R-Ga; Howard Dean, former national Democratic Party chairman; the Rev. Jesse Jackson.

So, what's catching your eye this morning?

UPDATE: First Geithner's assistant, and then Geithner himself deny this story. (Sort of.) He stops short of endorsing Warren but says she's well-qualified.

I'm sure y'all are as shocked as I am that Tiny Tim doesn't want Elizabeth Warren actually in charge of protecting consumers - since she might, you know, actually do her job!

I actually think putting Warren in a more prominent role would be a very smart political move. You want someone this smart, this credible and this tenacious on behalf of consumers as a prominent face of the administration. You never know, some of her credibility might even rub off:

Treasury Secretary Timothy Geithner has expressed opposition to the possible nomination of Elizabeth Warren to head the Consumer Financial Protection Bureau, according to a source with knowledge of Geithner's views.

The financial reform bill passed by the Senate on Thursday mandates the creation of a new federal entity charged with protecting consumers from predatory lenders.

But if Geithner has his way, the most prominent advocate for creating the agency may not be picked to lead it.

Warren, a professor at Harvard Law School whose 2007 journal article advocating the creation of such an agency inspired policymakers to enact it into law, has rocketed to prominence since the onset of the financial crisis as one of the leading reform advocates fighting on behalf of American taxpayers.

I just got back from DC after a whirlwind trip (Saturday to Tuesday). I hate flying cross country; it really bothers my injury. But I thought it would be interesting to go to the Dept. of Treasury with a bunch of bloggers and kick it with a host of Treasury officials including Tim Geithner. It was an "off-the-record" meeting and I think that made the participants more relaxed to speak freely, but did they say anything they might not have because it was supposed to be off the record? I doubt it.

I brought up the fact that they were losing their political capital on the CFPA if they move it to the Fed because the public wants it to be an independent agency with actual power. Unfortunately, they seemed to think that as long as it had the teeth they wanted, they weren't--and the public shouldn't be--concerned where it was housed. And then of course some members brought up that the Senate (Dodd and Corker) still had to work out their issues first anyway and they intimated how problematic the Senate has been. I pushed the point that it does matter where it's housed, especially to the American public.

Another issue brought up is one many bloggers have talked about: Republicans do an incredible job with messaging. And the Obama White House has been terrible framing their priorities. The Treasury officials admitted that they weren't very good at getting their message out there. Some seemed resigned to it, while others admitted there was a pressing need to get better at it.

Felix Salmon of Reuters has a very good piece up about the meeting:

I can’t quote what anybody said, even anonymously, but I can tell you that the message from Treasury was that financial reform is not dead in the Senate, and that in fact on some matters, including derivatives reform, there’s real hope that the Senate can put something together that’s even stronger than what the House passed. I’ll believe it when I see it, but the general idea seems to be that so long as something gets out of committee, the final bill might actually have some teeth.

---

More generally, I came away with the impression that life at Treasury is not much fun, on a day-to-day basis, and that the stresses of trying to set economic policy in the face of strong opposition from both the banking lobby and the Republican party are wearing on the officials there.

We really need to keep the pressure up on this issue. The CFPA is too important.

Continue reading »

The Wall St. Journal attempts to burnish Tim Geithner's image with the bankers - and most likely, to keep his oh-so-friendly face at Treasury. Notice how the article lists all the wonderful things Geithner's done for the boys on the street. (I especially like the "this is not Bolivia" cri de coeur.)

Interviews with dozens of government officials show that Mr. Geithner has acted as a brake on administration officials seeking punitive action against big financial firms.

Last year, in a previously unreported move, he resisted efforts to oust Citigroup Chief Executive Vikram Pandit as a condition for more government aid, according to administration officials. He successfully argued against ripping up contracts that controversially allowed millions of dollars in bonuses to be paid to American International Group employees, stating: "This is not Bolivia," according to two people who heard him say it.

Mr. Geithner also has pushed for banks to repay government funds (making them raise private capital instead) in defiance of some lawmakers and government watchdogs who said the firms should remain under Treasury's thumb until they resume lending to help the economy.

"What we achieved in the financial sector was way above expectations," Mr. Geithner said in an interview, pointing out "how quickly we restored confidence" in the financial system. "As long as I believe that we are making good judgments...and fixing stuff that was broken in ways that are going to make a difference, then I can live with the consequences."

The Left Coaster: The Real Tea Partiers, and some perspective

ArmsControlWonk:: N. Korea: Deadly in a Snowball Fight

Open Left: Voter intimidation tactics still thrive in America

The Baseline Scenario: Is Tim Geithner paying attention to the global economy? (h/t Politics in the Zeros)

Citizen Energy: Who has Obama been talking to?

HOLY CRAP: Archbishop chides Blair...What Would Jesus Eat?...Inquiring minds...Breakfast with the Family...The Illuminati...Defending our Prophets against Whaleofascism...The evil of banality...Christians oppose bill aimed at child prostitution...Workaholic Pope... H-E-double hockey sticks...Atheists naughty and nice...Sodomy, American Style...