Worst Treasury Secretary :Rubin, Paulson or Geithner

I am giving an award for worst Treasury Secretary. And I am nominating these guys. Hamilton of course is in a class of his own so I am naming it after him. The Alexander Hamilton Award for Worst Treasury Secretary.

It all started when I got to thinking the other day about just how bad Robert Rubin was. He was the architect of much of Bill Clinton’s economic policy. While many think the economy was good under Clinton it’s important to remember that he balanced the budget by raising taxes instead of cutting spending and produced a nice big bubble that popped leaving us in a nifty little recession. Rubin convinced Clinton that he needed to keep interest rates low to get re-elected. What ensued was a policy of higher taxes and lower interest rates. That made profit less attractive and debt more attractive fueling speculation in the internet bubble. What would have happened if taxes had been lower and interest rates had been allowed to find their natural level? Perhaps more internet businesses focusing on profit? Perhaps less wild speculation? So after trashing the economy as Treasury Secretary he went on the work at Citibank engineering their disastrous climb to their lofty position as one of the worst failed mortgage market speculators. Old Bob quit a few months ago. It appears he never met a bubble he didn’t like – or one he didn’t create.

Do I need to talk about Henry “Bailout-Hank” Paulson? Would our current esteemed President have had the balls to toss away another trillion if Hank hadn’t paved the way foir him?

Tim Geithner? Did you catch him on “This Week” this morning. In a flash of brilliance he’s come up with the astounding conclusion that we need to reduce the deficit if we are to have a healthy economy! What a concept! AND

“that’s going to require some very hard choices. AND we’re going to have to do that in a way that does not add unfairly to the burdens that the average American already faces.”

But he’s not ruling out new taxes.  Is this guy tripping?

I can’t decide. Each is worse than both the others. Let’s hear what you think. And feel free to nominate your favorite or comment on one of mine.

2 thoughts on “Worst Treasury Secretary :Rubin, Paulson or Geithner”

  1. Not on point, and pretty weak hyperbole. Treasury doesn’t control interest rates, the Fed does. As for recent performance, an inconvenient truth is that the banking system needed an injection of capital to prevent a run on the banks, leading to an economic crisis that would have made this one look a cakewalk. Where Treasury has gone wrong is in allowing populist politics grab control of this issue and the forcing of “bailouts” for purposes other than the soundness of the banking system. The fact is that we will very likely get every penny back that we put into these banks, with interest – in fact, we’ve already been paid back substantial amounts.

    Where the current Treasury has failed so far is in the regulatory initiatives that should be flowing from this event. Apparently Geithner has finally weighed in on the insufficiency of the efforts to date, and I hope to see him really stand up on this issue.

    Finally, while Libertarians have very valid criticisms of current and past fiscal and monetary policy, it’s important that we engage in reasonable criticism. We are different from the flacks and partisans from the right and left, aren’t we? Name calling and smears add nothing to the debate.

  2. Hello again Scribbler. You are of course correct in pointing out that name-calling adds nothing. How level-headed of you! And I’m not trying to be a smart-ass – I appreciate your thoughtful responses.

    Not sure where I exactly did any name-calling – ok “Bailout-Hank”. But that’s really just an accurate description. Nominating these guys for worst TS is perfectly valid. While name-calling doesn’t add – sarcasm is quite effective. And my comments about Rubin are on target. Of course you are right about who controls interest rates but the Fed nearly always accomodates the administration and Rubin must have had input to tax policy. My point was to show that Clinton’s economic policy was actually quite bad – contrary to what many think. This ties to Rubin’s record at Citi. I think it is quite on point.

    I’ve also got to comment on what appears to be your desire for more regulation. Please correct me if I misinterpreted that. It wasn’t lack of regulation that got us into this mess. It was artificailly low interest rates, and Fannie Mae, with orders from Congress to buy any junk Wall Street could dish up. Government can try to regulate Wall Street. But who’s regulating Govenrment? Wall Street just did exactly what Congress wanted them to – loan money to anything that moved. This crisis is %110 percent government created. And those three Treasury Secretaries (in and out of office) deserve a lot of the blame.

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