Geithner testifies before Congress on financial reform
I am listening to Treasury Secretary Tim Geithner answer questions before the House Financial Services Committee and he seems to be talking the talk, but his Administration is not walking the walk.
The bill he is aggressively defending calls for putting a resolution process in place which ostensibly allows the cost of the failure of a too big to fail to not be passed on to taxpayers or the wider economy. The sentiments he expresses are the right ones. But, he is rightly being questioned about whether this proposal gives the executive branch power which it could abuse.
Meanwhile, just in the last 24 hours we learned that GMAC was effectively nationalized and non-government equity was inexplicably not wiped out. The testimony and the actions are in direct contradiction with one another.
Congress is fully aware of this dichotomy. They seem to have a bit of bailout fatigue. That makes them mistrustful of Geithner’s intentions. As a result, he is facing some tough questions from Democrats and Republicans alike.