Sunday, January 29, 2012

Geithner strikes balance in approach to economic crisis...Is Harper listening?

Listening to Fareed Zakaria interview Timothy Geithner, Treasury Secretary in the Obama administration in Davos earlier this morning, I was aware of both the "term limits" on the Secretary's service to the administration (he will not serve in a second term) and the balance of his assessment and analysis of the relative importance of "austerity" and "stimulus" in the resolution of the nation's debt/deficit crisis.
Advocates of austerity over-estimate its importance while advocates of stimulus also over-estimate its significance at this time in the economic cycle...was the position I heard him striking.
Nevertheless, the political campaign airwaves are saturated with personal attacks painting the president as some "european socialist" and one Republican candidate for president dubbing his opponent as a wealthy elite with Cayman Island and Swiss bank accounts to accommodate his $42.6 million in income in 2011, while he (and his opponent) want to restore "opportunity" to the American people, another code word for unleashed capitalism and its little sister, "austerity" in order to reduce the size, importance and role of the government.
While the political rhetoric is painted in "either-or" terms, coloured black and white, without a hint of grey, or green, or blue or yellow or orange the more mature perspective as articulated by Geithner  is both closer to the truth and also more representative of actual governing, than is the inflamed rhetoric of campaigning.
Not co-incidentally, the president appointed a blue ribbon committee (Bowles-Simpson) to make recommendations on how to bring both debt and deficit back into line. Their responses were "balanced" similar to the "balanced" rhetoric of Geithner in Davos, and while there are critics of the president who think he did not put the full weight of his office behind their recommendations, nevertheless, he has consistently advocated a position of balance between spending cuts to entitlements and also increased taxes on the most wealthy, a position blocked by the Tea Party and the Republicans in Congress.
So, it says here that the presidential election that is still in its incubator, will unfold as a debate between the president's balanced approach (favoured by most Americans) of spending cuts, tax increases and investments in industry and manufacturing and training as well as infrastructure versus the Republican candidate's position of no tax increases, and no increases in spending, to preserve the opportunity of the most wealthy to "generate jobs" a position that is neither supportable by the evidence nor by the opinions of most respected and responsible economists of all political persuasions.
While I have not always been a fan of Mr. Geithner, considering him far too close to Wall Street where he was employed at the height of the economic meltdown, prior to the Obama election in 2008, and thereby unlikely to be the agent to promote stiff and needed regulatory changes in the financial services sector, nevertheless, his measured, balanced and detached responses to Mr. Zakaria in front of a "studio audience" in Davos at the Economic Forum attended by the world's leading political and business leaders merits our attention, and our faith and our hope that the president can and will be able to articulate to the American people, and thereby to the rest of the world, the importance of neither too much austerity (take note, Mr. Canadian Prime Minister) and too many tax breaks for the wealthy, both corporate and individual (once again take note, Mr. Harper) while at the same time providing government incentives for industry, manufacturing and both training and research.
Political rhetoric of the ideological kind, from both sides, is neither a solution for our problems, nor a measure of the success of any responsible government, including both Canadian and American political practitioners.

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