Timothy Geithner
On today’s Meet the Press, David Gregory and Treasury Secretary Timothy Geithner had a candid and even somewhat revealing discussion about the overall state of the economy, as well as specific ways to abet the healing process.
Secretary Geithner’s performance was strong (like A- strong) and his message had a little bit of something for everyone. He was sympathetic regarding America’s poor economic condition. He was clear on the need for a transition toward private sector investment – much to the surprise and delight of fiscal conservatives like me. But, he was also unforgiving on the timeline for the Bush tax cuts – much to the relief of the more fiscally liberal/pro-government crowd.
How’s America doing?
To begin, Geithner gave his overall view – essentially, the economy is improving, but it’s still sick. He put it like this.
“(Y)ou know, the economy’s now been growing for almost a year, little more than a year. Private sector’s creating jobs again. The economy is starting to heal again. You’re seeing growth. Manufacturing, private investment have recovered. Those are encouraging signs. But we’re living still with a lot of challenge still because the scars of this crisis ran so deep. And I think most Americans understand it’s going to take some time to heal this.”
How about a double-dip?
Gregory went on to take Geithner’s temperature regarding just how bad our current recession is, and more specifically, whether there would be a double-dip recession. The secretary’s prognosis was somewhat reassuring – if, that is, it comes to fruition.
According to Geither:
“No, I don’t (think there will be a double-dip). I think the most likely thing is, you see an economy that gradually strengthens over the next year or two, you see job growth start to come back again. Again, investments expanding, manufacturing’s getting a little stronger, export’s better. Those are very encouraging signs. But we got a long way to go still.”
How about those jobs?
Leave it to David Gregory to shoot straight and keep pressing. Ok, there might not be a double-dip recession, but there are other questions out there still:
“You still have both the political and the economic reality of this headline: “Where are the jobs?” And the both political and economic reality is that most Americans, based on a variety of polling, do not believe the administration’s claim that the stimulus had made things better rather than left things largely unchanged. And the criticism is, primarily from the left, that the stimulus was never big enough to really match up to the severity of the crisis. So why not stimulate more? Why not spend more to do something to create more jobs?”
How about private sector investment?
Geithner’s response was shocking, and I (for one) can only hope it’s true. His answer was that it’s time to transition back to private sector investment. Rather than solely ‘stimulating’ our way out, Geithner was chrystal clear, “we need to make this transition now to a recovery led by private investment.” It’s a change in message for this administration and a critical one. Read it here:
“The Senate is about to consider a very powerful package of, of tax cuts for small businesses, help small businesses get access to credit. That’s very important. And we think there’s some more things Congress can do to, again, to help reinforce this recovery. But we’re in a transition… from the extraordinary actions the government had to take to break the back of this financial crisis to a recovery led by private demand. That transition is well under way. It’s going to continue, it’s going to strengthen.”
“We want to make sure we’re strengthening the competitiveness of American companies across industries. And we’ve got some long-term fiscal problems that are going to be a challenge for us as a country. And we’re going to work to fix those problems we inherited, but the best way to do that is to make sure we’re growing, private investment starts to come back, private firms start to hire again. The government can help, but we need to make this transition now to a recovery led by private investment, private…”
How about the Bush tax cuts and capital gains?
Regarding the Bush tax cuts, Secretary Geithner’s response was indeed more in-line with the (mostly) anti-Bush electorate that voted his boss into office. According to the secretary, it’s “fair and good” policy to get rid of the Bush tax cuts.
“But I’ll say what the president believes, and I believe this, is the right thing for the country, the fair thing, the responsible thing for the country now is to make sure we leave in place and preserve tax cuts that go to more than 95 percent of working Americans and complement those with a set of incentives for businesses to expand and hire. To make that possible, and to do that responsibly, I think it is fair and good policy to allow those tax cuts that only go to 2 to 3 percent of the highest earners in the country to expire as scheduled. The country can withstand that. The economy can withstand that. I think it’s good policy.”
Regarding the capital gains tax, Geithner said he’d like to see them remain at 20 percent.
Like I said, a little something for everyone, assuming all holds true.
Sarah Lenti is the blogger behind NMPolitics.net’s The Savvy. E-mail her at sarah@nmpolitics.net.