Highlights of Treasury Secretary Geithner's interview this morning with Diane Sawyer on "Good Morning America":
When Ms. Sawyer declares that a year ago, "G.E. was going to fail" (now there's a question you aren't going to get on the "Today" show, which is owned by G.E.'s NBC unit), Mr. Geithner responds by saying, "We were never going to let it get to that point." If that doesn't amount to an implicit government "too big to fail" stamp of approval on General Electric, it's hard to know what would.
Mr. Geithner also says that last year there was "A huge amount of damage to the economy because this government didn't do enough soon enough to try to bring the crisis to an end." This is telling. Some analysts think the crisis was the result of too much, too heavy-handed, government action. Mr. Geithner thinks the government "didn't do enough, soon enough." It'd be interesting to know in more detail what exactly he thinks should have been done sooner and exactly when it should have been done. Take over AIG, Citigroup, Fannie Mae, GM and Chrysler or pass a $787 billion "stimulus" plan back in 2003? In 2006? In January 2008? In June of 2008? How exactly would policymakers have justified those actions at those times? Was the failure to do enough, soon enough, the result of some flaw in the Bush administration or is it related to the more general difficulty of timing the market, which would suggest that relying on politicians or regulators to manage the economy in the way that Mr. Geithner's hindsight suggests it should have been managed is an inherently highly challenging, perhaps even impossible, task.
Mr. Geithner is quoted by the Financial Times as offering a bit of an answer when he says, "you have to ask: why are governments so often late? There is a deep aversion to acting early. There is naturally a sense that it is offensive to throw public money at [the banks], so people wait and wait, and try not to do that."
