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Robert Reich
NationofChange / Op-Ed
Published: Tuesday 27 November 2012
“During his tenure as Treasury Secretary, Geithner has followed in Rubin’s path — engineering a no-strings Wall Street bailout that didn’t require the Street to help stranded homeowners.”

Will Tim Geithner Lead Us Over or Around the Fiscal Cliff?

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I’m trying to remain optimistic that the President and congressional Democrats will hold their ground over the next month as we approach the so-called “fiscal cliff.”

But leading those negotiations for the White House is outgoing Secretary of Treasury Tim Geithner, whom Monday’s Wall Street Journal described as a “pragmatic deal maker” because of “his long relationship with former Treasury Secretary Robert Rubin, for whom balancing the budget was a priority over other Democratic touchstones.”

Geithner is indeed a protege of Bob Rubin, for whom he worked when Rubin was Treasury Secretary in the Clinton administration. Rubin then helped arranged for Geithner to become president of the New York Fed, and then pushed for him to become Obama’s Treasury Secretary.

Both Rubin and Geithner are hardworking and decent. But both see the world through the eyes of Wall Street rather than Main Street.

I battled Rubin for years in the Clinton administration because of his hawkishness on the budget deficit and his narrow Wall Street view of the world.

During his tenure as Treasury Secretary, Geithner has followed in Rubin’s path — engineering a no-strings Wall Street bailout that didn’t require the Street to help stranded homeowners, didn’t demand the Street agree to a resurrection of the Glass-Steagall Act, and didn’t seek to cap the size of the biggest bank, which in the wake of the bailout have become much bigger. 

In an interview with the Journal, Geithner repeats the President’s stated principle that tax rates must rise on the wealthy, but doesn’t rule out changes to Social Security or Medicare. And he notes that in the president’s budget (drawn up before the election), spending on non-defense discretionary items — mostly programs for the poor, and investments in education and infrastructure — are “very low as a share of the economy relative to Clinton.”

If “pragmatic deal maker,” as the Journal describes Geithner, means someone who believes any deal with Republicans is better than no deal, and deficit reduction is more important than job creation, we could be in for a difficult December.

This article was originally posted on Robert Reich's blog.

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ABOUT Robert Reich


ROBERT B. REICH, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at Robert Reich's new film, "Inequality for All" is available on DVD
and blu-ray, and on Netflix in February.

Really it only looks like a

Really it only looks like a cliff. Since the political whores are laying down for their rich corporate pimps the foreshortening . . .

This country has too many

This country has too many people at the top taking all the cream and leaving sour cream for the rest of us. We need to get back to the Tax Code that brought us out of the Great Depression, after three Republican administrations led us off the cliff. From 1925 to 1931 we had too low of a top marginal rate in 25%. It took a stock market crash to reset the economy back to start all over. President FDR raised these stupidly low tax rates to 63% and then 79%, and then 81%, and then 88%, and finally 94% in order to get the working man out of the hole. I propose "20 Brackets to $20Million, w/rates from 3% to 60%. Now that's "Fair & Balanced".

So right you are, Belleville!

So right you are, Belleville!

That Geitner is a water boy

That Geitner is a water boy for Wall St. is no secret. The fact that Obama chose him tells us all we need to know about O's stance on Wall st. and the chances that any real reform can be or would be accomplished, let alone making any reform of the Fed which needs to be eliminated and monetary supply brought back to control by the people.

But just in case anyone has forgotten, Obama and the Dems did well in this last election because his opponent was a thoroughgoing plutocrat and a great many people have a desire to see Wall St. reformed, The SEC given a job to do and do it, and in a nutshell that the 99% are just a bit tired of being screwed, or at least 51% of them do.

The. FED........Wall

The. FED........Wall Street.......and the Banks.......dis-solved and shipped to GITMO for re-education. . .

Reich needs a little economic

Reich needs a little economic educatin' hell with Glass Steagall, that was the act brought in to save the banker's collective asses and preserve their hold over America. Lets go with the other reform that was proposed about the same time in which the power to issue and control money would have been returned to the people! FDR, the supposed champion of the masses, went with Glass Steagall as the bankers wished instead of the Chicago Plan which would, if it had been adopted led to world wide prosperity up to this day. Two PHD economists with the IMF recently ran the Chicago Plan through a complex simulation and proved (their paper is called The Chicago Plan Revisited) it is a much more reliable economic system, easy to switch to, and vastly superior in it's outcomes for the population as a whole, wiping out the national debt over a few short years allowing the actual lowering of taxes as surpluses accumulate. Only thing standing in the way are the banking elites and their government in Washington.

As Henry Ford once said " it is well enough that the people of the nation do not understand our banking and monetary system, for if they did I believe there would be a revolution before tomorrow morning."

Be careful what you wish for.

Be careful what you wish for. Each time we erased the debt, we had a severe recession or a depression.

Take care what you wish for.

Take care what you wish for. Each time we erased the debt, we had a severe recession or a depression.

Take care what you wish for.

Take care what you wish for. Each time we erased the debt, we had a severe recession or a depression.

Blame Geithner all you want,

Blame Geithner all you want, but in the final analysis his decisions are Obama's responsibility. Blaming Geithner does not absolve Obama. So I don't see any justification for optimism in Obama's second term. He's just as much a sellout to Wall Street as Geithner. It sure would be nice if some of Obama's populist rhetoric spilled over into his policy making but we haven't seen that yet. Don't expect his second term to be any different.

Exactly. If "we" get a bad


If "we" get a bad deal, it will be entirely Obama's fault. No bullshit excuses this time, buddy boy.

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