Greg Ip

Articles by The Economist’s U.S. Economics Editor

Archive for the ‘Timothy Geithner’ Category

Federal Debt: Dancing on the Ceiling

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Talk of America defaulting on its debt is just that

Jan 13th 2011 | WASHINGTON, DC | from the print edition

[Greg Ip] FOR most finance ministers default is usually a subject to be avoided at all costs. Not so in America, where Tim Geithner, the treasury secretary, sent Congress a letter on January 6th describing in gory detail the “catastrophic economic consequences” such an event would entail.

The letter was part of the dance that takes place whenever the administration asks Congress to raise the ceiling on the national debt. America is unusual in requiring a vote both to adopt a budget, and to issue any debt necessary to finance it. Grandstanding legislators typically demand concessions from the administration before raising the ceiling. There is obvious potential for a stand-off, just as there was in 1995-96, when Bill Clinton rejected the budget cuts proposed by congressional Republicans as a condition for raising the debt ceiling.

A similar confrontation now looms. Read the rest of this entry »

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January 13, 2011 at 6:00 pm

The brains trust dissolves: All the president’s economic principals are leaving, bar the treasury secretary

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[Greg Ip] HISTORIANS may one day label the first two years of Barack Obama’s presidency as the most activist in economic policy of post-war history. For that, credit both circumstance and the star-studded economic team Mr Obama assembled when he took office.

That team is now breaking up. On September 21st Larry Summers, the director of the National Economic Council and the president’s chief economic policy co-ordinator, said he would return to Harvard after the mid-term elections.

Read the article at economist.com.

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September 23, 2010 at 11:31 am

Fannie Mae and Freddie Mac: Unfinished business

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Can the American mortgage market survive without taxpayer support?

Jul 22nd 2010 | Washington, dc

[Greg Ip] THE hefty financial overhaul that Barack Obama signed into law on July 21st (pictured) left behind one big piece of unfinished business. In 2008 Fannie Mae and Freddie Mac, mortally wounded from losses on loans acquired during the bubble, were placed in “conservatorship”, a halfway house between bankruptcy and outright nationalisation. There they remain, their losses duly covered with new injections of capital by the Treasury—$145 billion so far. Tim Geithner, the treasury secretary, has promised to address the matter of Fannie and Freddie by early next year but so far he has no answers, only questions (literally so: in April he asked the public to comment on seven of them). Read the rest of this entry »

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July 22, 2010 at 4:00 pm

The truth hurts: Will the Treasury call China a currency manipulator?

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Mar 31st 2010 | WASHINGTON, DC | From The Economist print edition

[Greg Ip] TO MOST people, to say that China holds down the value of its currency to boost its exports is to state the obvious. Not, though, to America’s Treasury Department. By law it must report twice a year on which countries fiddle their exchange rates at the world’s expense. China was last fingered in 1994. Ever since then, the Treasury has concluded that the designation would do more harm than good. Speculation is growing that it may decide differently in its next report, due on April 15th. Read the rest of this entry »

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April 1, 2010 at 3:00 pm

The Financial Crisis Inquiry Commission: That 1930s show

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Jan 7th 2010 | WASHINGTON, DC 
From The Economist print edition

A Depression-era crusade against Wall Street has a 2010 revival

Getty Images
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Pecora in his pomp

[Greg Ip] THE battle against the financial crisis may be ending, but the war over why it happened has barely begun. The most ambitious effort yet to settle the story begins next week with the first hearing of the Financial Crisis Inquiry Commission.

Congress gave the ten-member bipartisan commission a sprawling mandate: to investigate at least 22 potential causes, from excess global savings to short-selling, and to explain why specific firms collapsed or needed bail-outs. The report, due by December 15th, is not supposed to contain recommendations but probably will.

Though modelled on the body that investigated the attacks of September 11th 2001, the spiritual father of this venture is the Pecora Commission. Read the rest of this entry »

The U.S. in 2010: The Fed’s next battle

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Nov 13th 2009
From The World in 2010 print edition
By Greg Ip, WASHINGTON, DC

This time, with politicians

 
How tight is Bernanke’s grip?

In the 1930s the Federal Reserve stood by as the economy sank into Depression. Retribution followed as Franklin Roosevelt concentrated more of its governance in Washington, DC. Today’s Fed, under its chairman, Ben Bernanke, has been hyperactive in preventing another Depression, yet again faces political peril. In 2010 critics in Congress will seek to rein in its independence even as its defenders in the Obama administration push to expand its regulatory powers. Read the rest of this entry »

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November 13, 2009 at 10:00 pm

Tim Geithner: Baptism of fire

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The original story is linked here.
Apr 23rd 2009 | WASHINGTON, DC
From The Economist print edition

 

 

America’s treasury secretary is torn between politics and policy

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ASKED after giving a speech on April 22nd whether he regretted taking his new job, Tim Geithner, Barack Obama’s treasury secretary, paused for what seemed an eternity. “I…uh…feel deeply privileged,” he replied. His audience erupted in laughter.

Mr Geithner’s first three months have been a baptism of fire. The markets soared last autumn (see chart) when the New York Fed chief’s name surfaced for the job. But within weeks of taking office in January, personal tax problems, a poorly received plan for fixing the financial system and a backlash against his bail-out of AIG, a big insurer, had some in Washington, DC, counting the months to his resignation.

 
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Talk of resignation has died down as markets have recovered amid renewed hope about the economy. The outrage over AIG burned itself out. And Mr Geithner has scored some successes: he has proposed new federal powers to take over failing financial institutions and he led the way for the G20 to boost the International Monetary Fund’s credit by $500 billion to support cash-starved countries.

Even so, Mr Geithner has not yet silenced the sceptics. Read the rest of this entry »

Written by gregip

April 23, 2009 at 9:51 pm

Is America repeating Japanese history?

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The original post is linked here.

EARLY in his tenure, Tim Geithner, the treasury secretary, promised that American policymakers would not make the same mistakes Japan did in tackling its financial crisis. But as politics threaten to upend his efforts, Mr Geithner should take a second to consider why Japan made its mistakes.

Japanese officials took too long to commit substantial public money to recapitalising their banks. But it was not because they were ignorant of the dangers or Andrew Mellon acolytes hell-bent on liquidating speculators. Like Mr Geithner, they feared being shot down by voters and politicians furious that taxpayers might bail out overpaid bankers. Read the rest of this entry »

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April 3, 2009 at 8:49 pm

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