In his public appearances, Treasury Secretary Tim Geithner has, to his great detriment, come off as timid and ineffectual. He can't really help it; his physical presence works against him: He has a baby face and the mottled complexion of someone who blushes easily, and his darting eyes suggest he just knows he's about to get his ass kicked and is just trying to anticipate what direction the blows are going to start coming from so he can duck. But today in front of the Senate Banking Committee, things seemed different. "This is a critical debate for our country," he began. "Let's get to it."
Indeed, it seemed that the Treasury secretary was anticipating guff, especially about the expanded authority the plan would confer on the Federal Reserve, and he was not taking it.
For instance: When Chris Dodd blamed the Fed for "dropping the ball" on consumer protections and said that giving the Fed more power was like awarding your kid a "bigger, faster car right after he crashed the family station wagon," Geithner reminded him that actually most of the institutions that failed were not under the Fed's watch, if he remembered correctly. Furthermore, he added, the Fed "has a greater knowledge and feel for broader market developments than is true for any other entity" — giving those powers to a council of regulators wouldn't work.
"You don't convene a committee to put out a fire," he added
Or do you, Chris Dodd? The senator from Connecticut was apparently so stunned (and/or afraid Geithner would bring up the AIG-loophole thing) that he couldn't even bust out with, "Then why is your proposal so chock full of new committees, boss?"
When Senator Bob Corker asked him if Obama should pledge in writing that none of the administration officials who worked on the proposal would become Fed chairman (since rumor has it Larry Summers has been angling), Geithner shot him down:
“No,” Geithner said. “I don’t think that will be appropriate, nor do I think that will be necessary.”
He had some tough words for institutions, too: From now on, he said, "No one should assume that the government will step in to bail them out if their firm fails.”
That's right, everyone, watch out. There's a new Treasury secretary in town!
Geithner Defends Plan to Give Fed Stepped-Up Powers [Bloomberg]
Live Blogging Timothy Geithner on Capitol Hill [DealBook/NYT]
Geithner Defends Plan to Step Up Oversight [WSJ]