Here’s a rule of life that’s come in handy over the years: Never assume malice when stupidity or incompetence is a more likely explanation.
Speaking of malice or stupidity, how about Tim Geithner?
There’s a growing suspicion in Washington and on Main Street that Geithner is not up to the job of Treasury Secretary. He’s not been able to fill important subordinate positions in the department and every time he opens his mouth the market takes a dive. Even Congressional Democrats are getting nervous.
And this is the Indispensable Man of unique skills not possessed by mere mortals, able to leap tall buildings with a single bound. The same man who claimed he couldn’t figure out TurboTax. Of course, we didn’t believe his explanation about TurboTax. We assumed that he was merely a tax cheat.
But what if he was telling the truth? What if it’s incompetence rather than malice?
That’s what former Australian PM Paul Keating thinks. He’s positively vicious on the subject of Tim Geithner’s handling of the Asian financial crisis a decade ago:
If anyone in the US media had thought to ask a former Australian prime minister for his assessment, they would have heard a different view. And they would not have been so surprised at Geithner’s performance since.
In a speech to a closed gathering at the Lowy Institute in Sydney on Thursday, Paul Keating gave a starkly different account of Geithner’s record in handling the Asian crisis: “Tim Geithner was the Treasury line officer who wrote the IMF [International Monetary Fund] program for Indonesia in 1997-98, which was to apply current account solutions to a capital account crisis.”
In other words, Geithner fundamentally misdiagnosed the problem. And his misdiagnosis led to a dreadfully wrong prescription.
And his ’solution’ for Indonesia was so lethal that years of 7% growth couldn’t lift the country out of the debt chasm that the IMF and Geithner created. The Indonesian government cratered and the Chinese learned an important lesson from the IMF’s bungling: never trust your economy to outsiders and create a foreign exchange nest egg that would weather any storm.
Meanwhile, Geithner is not directly or correctly addressing the stability or solvency of the world banking system, beyond shoveling money at the problem. And as he fumbles along, capital is losing confidence and going on strike.
But he’s the Indispensible Man.
H/T to Ed Morrissey on the Keating article.
