Geithner's Failure

For those who remember all my posts on former Treasury Secretary Tim Geithner on his failed policies on helping homeowners, here are some fancy Chicago economics professors saying the same thing:

Atif Mian and Amir Sufi are convinced that the Great Recession could have been just another ordinary, lowercase recession if the federal government had acted more aggressively to help homeowners by reducing mortgage debts.

The two men — economics professors who are part of a new generation of scholars whose work relies on enormous data sets — argue in a new book, “House of Debt,” out this month, that the government misunderstood the deepest recession since the 1930s. They are particularly critical of Timothy Geithner, the former Treasury secretary, and Ben Bernanke, the former Federal Reserve chairman, for focusing on preserving the financial system without addressing what the authors regard as the underlying and more important problem of excessive household debt. They say the recovery remains painfully sluggish as a result.

Geithner really stunk.

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    Glad you found that BTD (5.00 / 2) (#5)
    by ruffian on Fri May 16, 2014 at 02:49:32 PM EST
    There is also a WaPo article I linked to in the open thread that lays out the math of how Geithner and the WH vastly underestimated the effect of those underwater mortgages.

    It was one of those things that even a little familiarity with middle class people and their spending habits made obvious to a lot of us. I don't know Geithner's roots, but Obama should have known better.

    Awe shucks (5.00 / 1) (#39)
    by Militarytracy on Sun May 18, 2014 at 04:19:19 PM EST
    Missed it.  But you watched it for me and briefed me on the highlights and I thank you :)

    Sounds like a great title for a book (none / 0) (#24)
    by Mikado Cat on Sat May 17, 2014 at 11:56:15 PM EST
    Obama should have known better. Why, he was born to a rich privileged life and likely never worried about paying a bill or finding a job. Mortgage, whats that, didn't he get his first half million dollar house as a gift?

    Where do you get this stuff (5.00 / 1) (#32)
    by Yman on Sun May 18, 2014 at 12:54:49 PM EST
    Why, he was born to a rich privileged life and likely never worried about paying a bill or finding a job. Mortgage, whats that, didn't he get his first half million dollar house as a gift?

    ... and aren't you bothered by posting such obvious lies that are so easily disproven?  Do you honestly believe that putting some of them in the form of a "question" is any less transparent?

    It's got to get embarrassing after awhile.


    hah (none / 0) (#41)
    by Mikado Cat on Mon May 19, 2014 at 12:38:03 AM EST
    Maybe you are confused by believing what he said about growing up and paying those college loans etc. instead of easily available non fiction accounts.

    "Easily available" - heh (none / 0) (#44)
    by Yman on Mon May 19, 2014 at 06:23:27 AM EST
    Yet you - as usual - post no links to this "easily available" evidence.  Please do try - your attempts at providing evidence - rare as they are - are very amusing.  Easily debunked, but very amusing nonetheless.

    Here's how it works (none / 0) (#45)
    by Yman on Mon May 19, 2014 at 06:31:36 AM EST
    Funny Money
    Claim:   Barack Obama's education and house were paid for with money obtained from questionable sources.


    The Obamas' Chicago Home

    See?  It's easy and takes just a few seconds.  You should try it, occasionally.


    Here's another (none / 0) (#46)
    by Yman on Mon May 19, 2014 at 06:38:38 AM EST
    Politifact debunked this lie years ago.

    "Did Obama know that Tony Rezko was saving him $300,000 on the purchase of his home?"



    He was not born to a rich, privileged life (none / 0) (#25)
    by ruffian on Sun May 18, 2014 at 06:04:25 AM EST
    He was born and raised middle class, at best, as was his wife.

    Definitely upper middle class (none / 0) (#26)
    by CaptHowdy on Sun May 18, 2014 at 08:00:27 AM EST
    In Kenya

    He may have been raised middle class (none / 0) (#27)
    by jimakaPPJ on Sun May 18, 2014 at 08:17:37 AM EST
    but when he entered college everything forward was greased for him.

    Are you getting him confused ... (5.00 / 2) (#35)
    by Yman on Sun May 18, 2014 at 03:04:34 PM EST
    ... with your boy, GW Bush?  He would be the one who was born with the silver spoon and had "everything greased for him" from that point forward.

    I recently watched the special on (5.00 / 3) (#36)
    by Militarytracy on Sun May 18, 2014 at 03:13:28 PM EST
    Ann Richards, which was wonderful.

    What she said about daddy Bush applies to Junior too and dovetails in delightfully with Wile's speech payment inequality, "George can't help it, he was born with a silver foot in his mouth."


    I have always loved that quote (5.00 / 2) (#37)
    by Zorba on Sun May 18, 2014 at 04:05:41 PM EST
    from Ann Richards.  Especially said in her Texan accent.

    The whole (none / 0) (#42)
    by Mikado Cat on Mon May 19, 2014 at 01:49:00 AM EST
    but Bush blah blah blah mantra has gotten really really old.

    Obama shot like a rocket out of the Chicago political machine, where NOTHING happens without connections.


    You know what's even OLDER? (none / 0) (#43)
    by Yman on Mon May 19, 2014 at 06:21:09 AM EST
    Blatant wingnut LIES with not a hint of evidence to back them up.

    Your claims are laughable.  Obama was not born wealthy and his first house was not given to him.  Before you decide to start spreading lies you adopted from some winger website, you really should get your basic facts straight.


    In Kenya (none / 0) (#29)
    by CaptHowdy on Sun May 18, 2014 at 12:31:19 PM EST
    I'm going to start adding "In Kenya" (5.00 / 1) (#30)
    by ruffian on Sun May 18, 2014 at 12:34:40 PM EST
    to my fortune cookie readings.

    Really? (none / 0) (#33)
    by Yman on Sun May 18, 2014 at 12:56:14 PM EST
    Who did the greasing?  How?  Where is your evidence?

    More wingnut lies ...


    You don't (5.00 / 1) (#34)
    by Ga6thDem on Sun May 18, 2014 at 02:22:36 PM EST
    know too much about these neoconfederates do you? He got everything he wanted because he was black and they believe that blacks get preferential treatment.

    Blacks DO get preferential treatment (none / 0) (#48)
    by NYShooter on Tue May 20, 2014 at 11:00:33 AM EST
    once they become President of The United States.

    Geithner (5.00 / 1) (#8)
    by lentinel on Fri May 16, 2014 at 03:15:39 PM EST
    really stunk.

    Yes he did.

    What was Obama thinking?

    Once again, the best and the brightest ain't so good and ain't so bright.

    Some banks need to be broken up (5.00 / 1) (#9)
    by jondee on Fri May 16, 2014 at 03:29:31 PM EST
    and who has the cajones to do that?

    It's an absolute disaster-waiting-to happen to leave the economic well-being of the country in the hands of a relative handfull of bloated financial institutions who, one might add, seem to be still primarily obsessed with a beholden-mainly-to-the-shareholders paradigm.


    At least he called D'Souza a d!ck... (5.00 / 1) (#11)
    by magster on Fri May 16, 2014 at 05:11:08 PM EST
    for outing students at their alma mater when they went to school together. So there's a shade of gray there.

    I have had (5.00 / 3) (#13)
    by Ga6thDem on Fri May 16, 2014 at 06:23:49 PM EST
    personal experience with this program and I'm telling you it is a stinking nightmare. I wish it was only Geither. It's Obama too from the fact that he picked Geither.

    I like how they bring (5.00 / 1) (#17)
    by Militarytracy on Sat May 17, 2014 at 09:52:00 AM EST
    Debt forgiveness being possible in the past, and leading us to a healthier economy.

    Securitization changed that though, and banks, instead of making money on loan interest made their money selling their loans into securitization.  There is no one to call now to work with.

    I wonder if they will specifically go after securitizing debt being a problem?

    I read in the article that they are hard on "debt".  What I saw happening via the Larry Summers crew was a worship of debt that they (insiders) could harness.  Used to be that an outsider could look at a project and harness some of the solid volatility for themselves too, and if the investment failed they took a hit.  All the volatility became institutionalized though, with only insiders having access...and when failure visited, the invisible hand had to be stayed because it was going to wipe out all the key institutions.

    Securitization Was Not The PRoblem (none / 0) (#18)
    by squeaky on Sat May 17, 2014 at 10:33:34 AM EST
    The problem was that the banks knowing gave loans that had a very high chance of going into default. They did not care because they were selling the loans as fast as they were lending them.

    Had the loans had a very high chance of being paid, there would be a much smaller pool of loans and little chance of cashing in on the volume caused by lending to a pool of sub-standard borrowers.

    At least that is how I understand it...  please correct me if I am missing something.


    Not based on what they are talking about Squeak (5.00 / 1) (#19)
    by Militarytracy on Sat May 17, 2014 at 12:11:25 PM EST
    And securitization is a problem for Main Street and the small business owner.  I know this as a small business owner who used to have to survive tricky winters.

    Twice I worked with our bank on a loan during the winter months where I only paid the interest for say two months.  But everyone used to have this face to face service.  And if you were a good customer and a proven responsible payer of your debt such service was available.  Now if you need such a thing EFF you.  The loan is securitized and there is nobody to talk to, fees and fines are what you will experience.  It stifles growth too because nobody has that kind of constant income stream except what has been made apparent...active duty soldiers.  Even civil service can be furloughed and have uncertain bill paying futures.  This makes seeking loans for small business purposes that encourages an even stronger economy difficult, difficult to consider and even difficult to obtain.

    Securitization is what also stopped and continues to prevent home mortgage restructuring.  Securitization of debt IS a problem.


    OK (none / 0) (#20)
    by squeaky on Sat May 17, 2014 at 01:58:09 PM EST
    I thought you were talking about the mortgage crisis and derivatives.

    When houses fell through (5.00 / 1) (#28)
    by Militarytracy on Sun May 18, 2014 at 12:24:18 PM EST
    They (the royal Wall Street they) moved on to college educations.  With no jobs though that's gotta give too at some point.  Wall Street  really wants  income streams though that nobody can fail on the debt.  That's why they are still after conventional military retirements.  If this country's leadership has proven anything it is that that our military power is the priority.  If they could harness and own that stream they'd happily rape it, and when discovered they would say sorry and taxpayers would be on the hook for the fixing.

    They no longer have imagination though, and they no longer care about building a nation.  The 1% only wants to be fed it's entitlement.  They assess the easiest way to high jack what is out there available, and then they hire lobbyists.

    Little investors like you and I though also used be able to have some investment security, we used to be able to count on some of the physical tangibles belonging to us.  Not anymore that I can tell, the " investments" available to me are all intangibles.  And if the market crashes I get nothing, not even a galvanized screw :)

    I left what we have invested in bonds even when they were working to force everyone out.  Because I can only buy a slice of intangibles these days, I'd really like interest rates to go up, so that at least savings would be worth something.


    Anyone catch Geithner on Face The Nation (5.00 / 3) (#31)
    by ruffian on Sun May 18, 2014 at 12:36:49 PM EST
    this am? If so, my sympathies. Totally spoiled my breakfast. Forgive me for my ingratitude at your saving of the economy, Lord Timothy.  You will have to be satisfied with the tongue bath you got from Bob Shieffer.

    And that painted a picture (5.00 / 1) (#38)
    by Anne on Sun May 18, 2014 at 04:09:14 PM EST
    that had the potential to ruin my dinner...

    These people don't have a clue, and it's why I can't spend Sunday morning watching them anymore.  Give me Ree Drummond and Trisha Yearwood cookin' up something tasty any day over Tim Geithner cookin' up a big plate of crap and getting his feelings hurt because no one appreciates his effort.

    Now I have to refill my wine glass...


    LOL, sorry. I don't know why I watch them either (none / 0) (#40)
    by ruffian on Sun May 18, 2014 at 05:02:08 PM EST
    I can't turn away for some reason. Well, I did at least turn off NBC forever. That was progress.

    "Springtime for Bankers" (5.00 / 1) (#47)
    by KeysDan on Mon May 19, 2014 at 11:18:09 AM EST
    by Paul Krugman.  Dr. Krugman comments on former Secretary Tim Geithner's memoir, "Stress Test."   Similar take to BTD and many TL-ers.  

    Will you be reading Geithner's new book? (none / 0) (#1)
    by oculus on Fri May 16, 2014 at 02:21:40 PM EST

    A NYTimes review (5.00 / 2) (#6)
    by KeysDan on Fri May 16, 2014 at 02:57:24 PM EST
    Geithner's memoir, "Stress Test."   Apparently, nothing especially revelatory from him.  He seemed to see the objective to be restoration, rather than reform of the financial system.  The problems were not in policy, he believed,  but in the poor articulation of them.  Although, in the regrets department, he does feel that among shortcomings, he should have expanded the housing program earlier to ease the pain.  

    Acknowledging the precarious situation and the difficulties that abounded, the  regret from my perspective, is that he did not resign, as he wanted to, after his amateurish first press conference expressed by the Wall Street confidence gauge of dropping 500 points as he spoke.  


    Soem times it is hard to tell if someone (5.00 / 1) (#7)
    by ruffian on Fri May 16, 2014 at 03:03:42 PM EST
    is a true believer in 'trickle down' economic theory, or if they just don't care what happens to people that are not rich. His first objective was to keep things good for the rich people. Did he really think that would eventually help the rest of us too, or did he just not care? Maybe if I read the book it would tell me, but if I do I will definitely be borrowing a copy, not buying it.

    Yes (none / 0) (#3)
    by Big Tent Democrat on Fri May 16, 2014 at 02:43:45 PM EST
    and Elizabeth Warren's too.

    Your Arguments (none / 0) (#2)
    by squeaky on Fri May 16, 2014 at 02:29:04 PM EST
    Your arguments against Geither's policies in favor of FDR type programs to focus on the little guy, and not the banksters, seemed so obvious back then..  particularly because your argument made so much sense.

    Glad to see that fancy economists are now agreeing with you!

    One is a fancy University (5.00 / 1) (#4)
    by oculus on Fri May 16, 2014 at 02:44:47 PM EST
    of Chicago economist.

    Both graduated from MIT (none / 0) (#16)
    by Militarytracy on Sat May 17, 2014 at 08:34:45 AM EST
    And the Princeton economist is in fellowship with Chicago.

    sign of the coming crash? (none / 0) (#10)
    by The Addams Family on Fri May 16, 2014 at 04:17:22 PM EST
    the other day on a US Airways flight, the flight attendant was delivering a canned speech over the PA to hawk a credit card offer, & you would not believe the incentives in terms of extra mileage points for signing up right there & then, midflight

    i recall that the last crash was preceded by all manner of nonfinancial institutions suddenly arrogating to themselves the lending function of banks

    wonder whose portfolios these sliced & diced "assets" will end up in

    If the USAir Visa card is ... (5.00 / 1) (#12)
    by Donald from Hawaii on Fri May 16, 2014 at 05:55:29 PM EST
    ... like the one that's presently being hawked by Hawaiian Airlines, the credit card is probably issued through a major financial institution, which in Hawaiian's case is J.P. Morgan Chase.

    I've actually had one for years now, and it's a rather easy and convenient way to rack up the mileage. It paid off handsomely when Elder Daughter was going to college back east, because we usually had more than enough miles to bring her home for the holiday and summer breaks and conveniently, Hawaiian flies nonstop between Honolulu and New York-JFK. It easily saved us thousands of dollars which we would've had to otherwise fork over in air fare.

    (But I do adhere to one personal and very ironclad rule with my credit card, which is that I never charge anything on it that I can't afford to pay off in 30 days. That allows me to avoid the usury fees that pass for credit card interest rates nowadays.)

    Personally, I find such cross-marketing to a captive audience like aircraft passengers be rather intrusive and annoying, and I complained to Hawaiian's corporate management when the flight attendants starting passing out the credit card application forms while we were inflight. Apparently lots of other people complained, too, because Hawaiian recently stopped doing that on its flights, and now only posts magazine-type ads at the airport check-in kiosks.



    Credit cards from credit unions are best (none / 0) (#14)
    by ragebot on Fri May 16, 2014 at 09:08:10 PM EST
    I have one from USAA.  Have not had a bank account in probably thirty years.  Credit unions are non profit and offer lots of services that the big banks can't or won't.

    Down side for some folks is you have to have good credit.  A credit union is more picky than a big bank in extending credit.

    But if you check out the nit picking charges from a bank compared to a credit union it is clear the banks expect a portion of their loans to go bad while a credit union does not.


    I'm with a CU also (5.00 / 1) (#15)
    by nycstray on Fri May 16, 2014 at 11:24:20 PM EST
    I did have a bank account in NY, but it was with one of those small indie banks, so when I moved here (CA), I was not going back to the big banking system. Luckily, there's a credit union 2 blocks from my house and just living here makes me accepted (last time I was with a CU, it was because of where I worked). Been very happy with them for the past few years. They know me, they know my dog, all's good :)

    It matters not one bit (none / 0) (#21)
    by CoralGables on Sat May 17, 2014 at 05:41:37 PM EST
    who issues the credit card if you get one with no annual fee and pay the balance due each month like Donald. All that matters from a financial perspective is the size of the kickback you get for using it.

    It does matter (5.00 / 1) (#22)
    by nycstray on Sat May 17, 2014 at 07:08:50 PM EST
    if you don't want to support the big banks.

    The statement was (none / 0) (#23)
    by CoralGables on Sat May 17, 2014 at 08:08:15 PM EST
    Credit cards from credit unions are best

    That would be an untrue statement.