CHESSNOID

My first impression on Timothy Geithner is I don’t trust him on the economy.  That is unusual since he is not a politician.  I can only go by with what I read about him and the actions he has already taken.

What I read about him is he didn’t pay his taxes.  He said it was an honest error and apologized.  This is either an obvious lie or plain stupidity. Wall Street Journal:

Sen. Jon Kyl (R., Ariz.) called it “incomprehensible” that Mr. Geithner didn’t realize he needed to pay employment taxes. He also questioned why Mr. Geithner took so long to correct the problem for tax years 2001 and 2002. The payroll-tax errors were discovered during a 2006 Internal Revenue Service audit of Mr. Geithner’s taxes, and he paid what he owed for 2003 and 2004. But Mr. Geithner didn’t pay the Social Security and Medicare tax he owed for 2001 and 2002 until after Mr. Obama indicated in the fall that he planned to nominate him as Treasury secretary.

“I regret having not done that sooner,” Mr. Geithner said. “If I thought about it more, maybe I would have come to it sooner. I did not believe when I settled that audit that I had an obligation to go back. I had not thought about it in the intervening years.”

Based on what I am reading, Geithner knew about the back owed taxes and only paid the previous 2 years 2003 and 2004. He initially didn’t pay 2001 and 2002 probably because they were out of stats. He later decided to pay them because of the nomination and didn’t want to look like someone who dodged paying taxes even if he could legally did so. His response about regretting not done it sooner avoids answering directly why he didn’t, but the inference is easy to see.

Another issue I have with Geithner is that he was part of  the planning of the previous FAILED bailouts that he thinks have worked.  In his view, the bailouts were successful.  I have consistently been against the bailout because of the moral hazard it creates. Now we see many other companies lining up asking for a share of taxpayer money.  WSJ:

Sen. John Ensign (R., Nev.) cited a nonpartisan Congressional Budget Office report saying that less than half of the $355 billion House Democrats want to spend on highways, bridges and other job-creating investments is likely to be used by the end of fiscal 2010.

“How does that stimulate our economy?” Mr. Ensign said.

Mr. Geithner said the tax incentives included in the stimulus package would have a “substantial and quick-acting effect” and that the Obama administration “tried to be careful [to] limit long tails.”

While he pledged to “reshape and redesign” the financial rescue, Mr. Geithner made no apologies for the actions taken thus far to combat the crisis. Mr. Geithner, as head of the Federal Reserve Bank of New York, worked closely with former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to craft a rescue plan, including the $700 billion bailout approved by Congress in the fall.

He really believes that he has helped the economy with the way the first $350 billion was wastefully spent. Everyone in Congress is disappointed with the way it was spent with no transparency or accountability. The economy is worse now and that money did not accomplish what it was originally set out to do.

Geithner has that Bush mentality to stay the course even if we are wrong and hope everything works out somehow. This is where we are now in the economy under Bush’s leadership. Knowing Geithner is another architect of the previous Fraud Bailout Plan (along with Paulson and Bernanke) makes me realize we are getting further from a speedy recovery.

The fear of not doing something is their claim of helping the economy.

Mr. Geithner said those actions helped prevent a “catastrophic” collapse of the financial system but vowed to make the government’s actions more forceful and effective.

Unfortunately, that theory is not true and they have demonstrated that with their failed bailouts of Bear Stearns, AIG, Fannie Mae, Freddie Mac, and the trillion dollar TARP have not prevented a “catastrophic” collapse of the financial system.  The extra burden they are putting on the economy is making the recession more severe.