Friday, June 26, 2009

In but not of finance 

Johnny Roosh, honorable mayor of the MOB, finds this really incredible quote from Treasury Secretary Timothy Geithner.
JIM LEHRER: Finally, President Obama said yesterday that the real cause of all of this was a culture of irresponsibility. You�ve worked in and around the financial industry for years. How would you describe that, what that culture was? What caused it?

TIMOTHY GEITHNER: I�ve never worked in the financial industry, just to say. I�ve always worked in public service and the government.
Let's review the resume, shall we? He was at the New York Federal Reserve as its president before joining the Obama Administration. So he is the president of the place where Fed open market operations happen. Before that he's at Treasury holding a bunch of positions, including as undersecretary for international affairs (which was the position Larry Summers held before ascending to secretary after Robert Rubin) and his years at the IMF that confounded TurboTax. It's hard for someone to read this history or these comments during his NYFed times and not think he's in the financial industry; you can understand Jim Lehrer's question.

No, what I think Geithner means is that he never worked to earn money for a financial firm. I don't think this makes much of a difference unless you think that somehow makes you more noble. It is very telling the distance he puts between himself as regulator and the financial industry in this comment from 2008:
Let me just finish by saying that confidence in any financial system depends in part on confidence in the individuals running the largest private institutions. Regulation cannot produce integrity, foresight or judgment in those responsible for managing these institutions. That�s up to the boards and shareholders of those institutions."
I knew several people within the industry who were questioning the closeness of Hank Paulson to the financial industry; Geithner seems to want the exact opposite pole. I'm not sure either place is where we want our regulators.