American Elephants

Treasury Secretary Tim Geithner Departs the Battlefield. by The Elephant's Child


Bloomberg puts it delicately. “Treasury Secretary Timothy F. Geithner finds himself in a familiar position: eager to resume life outside government and facing contentious negotiations with Congress over raising the federal debt ceiling.”

“The last time he was in this predicament, in June 2011, President Barack Obama persuaded him to stay. This time, Geithner has indicated to White House officials he wants to carry through with his plan to leave the administration by the end of this month, even if a deal on the debt limit isn’t in place, according to two people familiar with the matter.”

Over at Zero Hedge, Tyler Durden referred metaphorically to the Titanic and sinking ships.

Administration officials approached American Express Co. CEO Kenneth Chenault about joining Obama’s second-term cabinet, but he is not interested in leaving the private sector and has declined further comment.

White House Chief of Staff Jack Lew remains the leading contender for the Treasury job according to the usual anonymous people. Lew did work as a managing director for Citigroup, and has served as director of the Office of Management and Budget for both Obama and President Clinton. Prior to that he was an aide to the late Tip O’Neill.

“Because Lew’s experience in financial markets is thin, Obama may seek to name a Wall Street executive as deputy Treasury Secretary,” the anonymous people said.

Obama has a lot of jobs to fill. He has already nominated Senator John Kerry as Secretary of State. EPA administrator Lisa Jackson is leaving, supposedly before charges can be filed about her use of illegal false-name emails. Obama will be choosing new secretaries of defense, commerce, and energy,  and a new U.S. trade representative and a new director of the CIA, and probably more.

Geithner told Congress on Dec. 31 that the U.S. hit its statutory debt limit, requiring emergency steps announced last week to keep funding government and avoid default. He said Treasury can create about $200 billion of “headroom” to avoid default.  He will stay through the inauguration, and then leave.

The negotiations over the debt ceiling will be contentious. Republicans will demand spending cuts. Obama insists that any spending cut be met with a rise in taxes. He’s still playing politics and trying to get the Republicans to raise taxes. Democrats have a fixed belief that the only arrow in the Republican quiver, so to speak, is tax cuts, and if they can make the Republicans surrender on tax cuts, then the Republicans are over as a political party.

Mr. Obama’s current word (undoubtedly focus-group tested) is “balance.” That simply means he gets his way.

They really don’t get the philosophical basis of the Republican party. At some point Democrats’ reason for existence became simply — winning. Their only goal is power, and to achieve power, they must win. They don’t like the Constitution because it is a restraint on what they can do. They don’t want to compete with the Republican party, they want to end it, permanently.

Republicans want to defeat Democrat’s bad ideas, and help them to see why specific ideas will not work. But I don’t know of any Republican, any time, who wanted to finish off the Democratic party, put them all in concentration camps, or execute them all. (Suggestions Democrats have frequently made). Republicans believe in free markets, free people and a society of growth and opportunity for all. There used to be Democrats who wanted that too, they just had different ideas about how to get there.

Big Government may mean power for the elite, but it means control and regulation and ever diminishing freedom for the people. Aside from that — it just doesn’t work.  History has plenty of lessons if we just pay attention.


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