Free Markets, Free People
There’s a quote going around from Timothy Geithner that again demonstrates why he has no business heading the Treasury Department.
In it he says things which are hard to attribute to a Treasury Secretary but certainly indicative of someone who could be labeled a political hack.
"That’s the kind of balance you need," said Geithner. "Why is that the case? Because if you don’t try to generate more revenues through tax reform, if you don’t ask, you know, the most fortunate Americans to bear a slightly larger burden of the privilege of being an American, then you have to – the only way to achieve fiscal sustainability is through unacceptably deep cuts in benefits for middle class seniors, or unacceptably deep cuts in national security." [emphasis mine]
James Pethokoukis literally takes this quote apart line by line and makes the technical argument as to why it is poppycock. It’s worth the read.
However, I’m most interested in those phrases I’ve emphasized in a more cultural/political/philosophical vein.
Since when do Americans, any Americans, have to pay government for the “privilege of being an American?”
I can’t think of a quote that more starkly differentiates the philosophies of right and left than Geithner’s. At its base it points to a philosophy that puts the state and collectivism before the individual and liberty. It is the polar opposite of the philosophy on which this country was founded. It is a mindset which must constantly be exposed and rejected.
We, as Americans, don’t pay anyone for any such “privilege”, and certainly not government. But the Elizabeth Warrens, Tim Geithners and Barack Obamas of world believe otherwise.
That statement tells one all they need to know about a philosophy that drives this current administration and much of the left. Americans, apparently, exist to serve government (and pay whatever cost government deems necessary) and not the other way around. The fact that they’re only attempting to use the “rich” in this case doesn’t mask the fact that they don’t limit this belief to only the “rich”. It’s just that politically, that’s all they can get away with at the moment. Make no mistake, they are elitists and collectivists and the path they want to take this country down is a path of limited liberty and no return.
As to the final emphasized phrase, note the false dichotomy. It is as fallacious as any argument you’ll ever see. The “only” way to achieve fiscal sustainability is by cutting only those two programs?
There are entire executive departments, agencies and bureaus which could be dismissed and cut before either of those other areas had to be touched. There are literally billions of dollars that could be saved by reducing government at all levels. To pretend that the only solution is to make “deep cuts” in benefits for “middle class seniors” or “national security” is the biggest crock of crap yet foisted on the American people since Al Gore invented his get rich quick scheme called global warming.
Obviously both of the areas mentioned by Geithner are areas in which cuts must and will be made. But it is pure and unadulterated sophistry to pretend that they alone will suffer if we don’t tax the ‘rich’ for the ‘privilege of being an American’.
I can’t tell you how much Geithner’s words rankle me. It is people like he, Obama and Warren that must be shown the door (or, in Warren’s case, never let in the door), politically speaking. They are a danger to liberty and freedom. The philosophy under which they operate is unacceptable and as I’ve said many times, must be defeated.
If you value your liberty at all, I suspect you feel the same way. How we got to this point, where high government officials feel comfortable saying such nonsense should bother you. It points to a tacit acceptance of their view by many. To those who love liberty, their view is unacceptable. It just makes you wonder how many of us are left that actually do value and love liberty, doesn’t it?
Treasury Secretary Turbo Tax Tim Geithner, who is reportedly thinking about leaving the administration (and I say good riddance), is also, apparently, a constitutional scholar as well as a tax cheat.
While speaking with Mike Allen of POLITICO, Gethner held that the debt ceiling was likely unconstitutional:
"I think there are some people who are pretending not to understand it, who think there’s leverage for them in threatening a default," Geithner said. "I don’t understand it as a negotiating position. I mean really think about it, you’re going to say that– can I read you the 14th amendment?"
He then read it out loud:
"’The validity of the public debt of the United States, authorized by law, including debts incurred for the payments of pension and bounties for services in suppressing insurrection or rebellion’ — this is the important thing — ‘shall not be questioned.
"So as a negotiating strategy you say: ‘If you don’t do things my way, I’m going to force the United States to default–not pay the legacy of bills accumulated by my predecessors in Congress.’ It’s not a credible negotiating strategy, and it’s not going to happen," Geithner insisted.
Wait. Hold on. Is Geithner saying that the Constitution, via the 14th Amendment, essentially gives Congress unlimited spending power that can’t be questioned? Because that’s what it seems he’s saying.
Secondly, there are ways to pay “debts”, “pensions”, etc. without breaking the debt ceiling – cut spending in other areas.
Finally, depending on the interpretation, a debt ceiling could indeed be an authorized law which limits what can be incurred as public debt – and shouldn’t be questioned. I doubt the founders had any intent to allow Congress to authorize unlimited and unquestioned spending. Anyone who can find that sort of an intent stated anywhere by the will truly be informing me of something I didn’t know.
Always good to know you have a Treasury Secretary who sees unlimited spending as a feature, not a bug, and wants it clearly understood that the “important thing” is it shouldn’t be questioned.
Don’t let the doorknob hit you in the ass on the way out, Tim.
Tim "Turbo Tax" Geithner has an op-ed in the New York Times entitled, "Welcome to recovery".
Or perhaps I should say that it is a litany of liberal talking points and just plain old fantasy. He has a list of indicators which he’d like you to believe prove we’re just around the corner from full recovery.
I don’t have the time to go through all of them, as much as I’d like too, but a couple caught my eye. For instance, jobs:
Private job growth has returned — not as fast as we would like, but at an earlier stage of this recovery than in the last two recoveries. Manufacturing has generated 136,000 new jobs in the past six months.
That’s just nonsense on a stick. If your best example is a major economic sector which may be adding 23,000 jobs a month, you haven’t much to crow about. Not when you look at the jobs that are going away each month. The reports are not good and pretending they are doesn’t impress anyone and makes what little credibility you might still retain suspect.
The auto industry is coming back, and the Big Three — Chrysler, Ford and General Motors — are now leaner, generating profits despite lower annual sales.
That’s either a flat out lie or it’s from a second set of books.
e21 points out that if you analyze the auto industry, the news is not good:
The auto companies are certainly not out of the woods yet. There has been a massive rebuild of negative working capital balances at GM (and Ford). What does that mean? Well, working capital is current assets minus liabilities – and it’s a good way to measure whether a company has the liquid assets to grow or build the business (and add shareholder value). Positive working capital is also a useful measure for gauging a company’s financial resilience. Negative working capital, on the other hand, means that current liabilities exceed assets – and a firm in this situation can’t spend as aggressively.
How massive is the “rebuild of negative working capital?” Massive:
Those are monthly figures (GM’s only from Jul 09 when it emerged from bankruptcy). There’s nothing in those figures that makes any sort of case that the companies are turning a profit. In fact, if you look at what e21 says, it is clear that they’re still doing what got them into the shape they were in previous to the financial downturn.
Certainly their position hasn’t been helped by slow auto sales (even during the “recovery”), but what all of them could use is some investment help. Ford could possibly get it but it is also possible investors are not likely to risk their capital on an industry that has a government presence. Again e21 explains:
The roughshod methods that were used against bondholders in the bailout, the questionable methods used to pick winners and losers in the rush to close thousands of auto dealerships and the favorable treatment given to the unions (followed by the codification of this policy in the Orderly Liquidation Authority in the Dodd-Frank financial regulation bill) serve as the case study for why investors and lenders will be skittish about lending or investing in U.S. companies that have a big union presence and/or would be deemed Too Big To Fail by the government.
And then there’s all the money they owe under TARP.
Like I said, just two of the many examples which are pure fiction.
The rest of his article is an attempt to write a favorable history of the government’s effort – but those who watched it and assessed its results aren’t particularly impressed. Geithner ends his ramble with this:
And as the president said last week, no one should bet against the American worker, American business and American ingenuity.
No one should be at war against any of those either, yet this administration has been at war with the financial industry, the energy industry and business in general from it’s first day in office. Perhaps it is time for a little internal administration introspection – honest introspection – with the aim of determining whether they’re part of the problem of part of the solution. If they actually did that, they’d have to honestly assess themselves as part of the problem. Geithner’s fantasy piece is all the proof you’ll ever need to know that will never happen.
hat do you do if you’re a politician and you promised that if you did something good results would be assured. And then you did it and, in fact, things got worse?
Well that’s the situation the administration faces. It claimed that the "stimulus" was a bit like a FedEx package – something that absolutely, positively had to be done or we would be facing horrific unemployment – over 8%. So the Democratic Congress (alone) jammed through a pure pork package of almost a trillion dollars and sure enough unemployment which was below 8% at the time, eventually shot to 10% (and has now receded to 9.5% "officially").
Faced with that, what the administration has decided to do is run Tim Turbo Tax Geithner, the Secretary of Treasury, out there and pretend like the “stimulus” worked. No, seriously, that’s their plan – damn the facts, go out and essentially say they’ve got the economy in good enough shape that they can now step back and let the private sectors take over:
Treasury Secretary Timothy Geithner said the economy has now recovered sufficiently for government to begin to make way for private business investment.
Mr. Geithner’s comments on Sunday, which echo previous sentiments expressed by President Barack Obama, reflect a turning point in the government response to the worst economic downturn since the Great Depression, a period marked by deep federal intervention in the financial, housing, auto and other industries.
“We need to make that transition now to a recovery led by private investment,” Mr. Geithner said Sunday on NBC’s “Meet the Press.”
Now that takes some stones. To pretend that government intervention has done much of anything requires Hillary Clinton’s “willing suspension of disbelief”. The GDP is limping along in the 1 to 2% growth area, debt has shot through the roof, unemployment remains stubbornly high (and higher than when government “stimulated” the economy) and legislation passed by this administration – and its legislative agenda – has businesses sitting on the sidelines with a pile of money and refusing to participate because of the unsettled business climate.
However, running this meme allows the administration to step back from its failure by calling it a success and passing the blame, now, to the private side. This can have a two-fold effect for them if they can successfully run this bluff.
For one, they can claim the private sector is to blame for continued weakness. That’s very useful to them. Why? Because it sets up what they really want – a second stimulus and more government control.
“There’s going to be a good case for the government preserving some type of guarantee to make sure people have the ability to borrow to finance a house even in a very damaging recession,” he said on “Meet the Press.”
He said the administration would begin developing such a program very soon. “We’re going to take a careful look at a set of reforms that are going to be good for the country going forward and don’t leave us vulnerable to this kind of crisis in the future,” Mr. Geithner said.
And it provides something this administration desperately wants and needs: a scapegoat.
Of course, with midterms coming soon, this may end up being an attempt that is too little and too late. But frankly I don’t think it will take. It is far too cynical an attempt to sell something that already smells terribly rotten. Just as the majority saw through the attempt by Obama to claim that the “stimulus” didn’t have a gram of pork in it (as stated earlier, it was pure pork), they’ll see through this attempt to sell “the economy is better and it’s because of the “stimulus”” that Geithner is attempting here.
This, as usual, is more about political posturing and meme creation than it is about reality. And with this administration, that’s something people have already come to recognize and dismiss.
Read this carefully. This is from George Stephanopoulos:
To get the economy back on track, will President Barack Obama have to break his pledge not to raise taxes on 95 percent of Americans? In a “This Week” exclusive, Treasury Secretary Tim Geithner told me, “We’re going to have to do what’s necessary.”
Geithner was clear that he believes a key component of economic recovery is deficit reduction. When I gave him several opportunities to rule out a middle class tax hike, he wouldn’t do it.
“We have to bring these deficits down very dramatically,” Geithner told me. “And that’s going to require some very hard choices.”
“We will not get this economy back on track, recovery will be not strong and sustained, unless we convince the American people that we are going to have the will to bring these deficits down once recovery is firmly established,” he said.
For the gullible who believed their taxes weren’t going to go up “one dime”, Turbo Tax Tim is laying the ground work to prove your gullibility.
For those who never believed the “promise” to begin with, big surprise, right?
But the more important point is found in Geithner’s last sentence in the cite. In there he’s telling the public that they have to bear the cost of this administration’s profligacy. Because, you see, they spent your money (like the porkapalooza they called the “stimulus package”) like drunken sailors on shore leave and it is now up to you – the sober ones in this deal – to bail them out. But watch ‘em – they’re going to claim they saved the economy.
And now they’re ready to save the climate and fix your health care too.
Yes some very hard choices are going to have to be made – some adults are going to have to stand up to Timmy and the boys and say “no”.