From MarketWatch:
Geithner says recovery still in early stages
Treasury secretary says health-care reform necessary part of healing economy
By Kate Gibson, MarketWatch
Jun 15, 2009
NEW YORK (MarketWatch) – The economic recovery is still in its early stages, with further pain still ahead – such as increasing joblessness – as the nation works its way out of the recession, Treasury Secretary Timothy Geithner said Monday.
"We’re two years into this. The process of repair and recovery will take time. "Unemployment will continue to rise even as the economy recovers" Geithner told a gathering sponsored by Time Warner in New York.
Questioned about his recent journey to Asia, Geithner downplayed concern that China, the largest foreign purchaser of U.S. government bonds, was worried about the increasing level of U.S. debt, saying officials in Beijing understand the dire situation and the need for the remedies taken. "They recognize their fate is closely tied to the fate of the U.S," he added. Read about Geithner’s weekend with the G8.
Asked about the reluctance to lend on the part of the financial institutions that took government rescue funds, Geithner declared that there is more credit available currently than when the economic crisis was at its height.
With Americans saving more and financial institutions lending less, banks and households alike are adjusting their practices in ways that, while beneficial in the long term, are likely also slowing down the pace of the recovery, Geithner said.
"This crisis was born in part because households around the world took on too much debt. Demand for credit is falling as people live within their means," he said.
"I wouldn’t want any family to go through this just to learn to live within their means," said Geithner, who added one healthy adjustment would likely be "people are going to be more focused on what they do than on what they earn."
Asked about executive compensation and whether it may have helped create the near meltdown of the U.S. financial system, Geithner said the Obama administration is determined to adopt a regulatory framework to prevent a repeat of the current scenario.
"We run an economy that relies on the market. But basic protections failed, and supervision didn’t do what it was supposed to. Compensation overwhelmed those basic checks and balances. We want there to be risking taking in our economy, but within a framework of better protection."
"We should be able to design a system where there is more clarity about the rules of the game," he added.
Saying President Obama would speak Wednesday about the consumer side of proposed reform, Geithner said "consumer credit generally was the focus of lots of bad practices, (including) predatory behavior. We want to stop that."
Geithner also linked an overhaul of the nation’s health-care system to bringing the nation’s fiscal house to order, saying "the path to fixing the economy does go through health care at some point." …
What a bunch of confusing and disingenuous remarks, even by the standard’s of the Obama administration.
"We’re two years into this. The process of repair and recovery will take time. "Unemployment will continue to rise even as the economy recovers" Geithner told a gathering sponsored by Time Warner in New York.
What is he referring to here? What are the “two years”? Is he saying that the recession has been going on for two years? Or the recovery? Or will the recovery take two years?
Or is it, as we suspect, just words.
Asked about executive compensation and whether it may have helped create the near meltdown of the U.S. financial system, Geithner said the Obama administration is determined to adopt a regulatory framework to prevent a repeat of the current scenario.
You see, the entire financial crisis was caused by CEOs making too much money.
And we have to fix things so that these greedy capitalists don’t screw us over again.
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