When Perception Becomes The Reality: Tim Geithner Edition

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Tim Geithner Testimony

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True or false: Tim Geithner is a former Goldman Sachs associate. Answer: False. The larger issue is that after repeated characterizations in print and broadcast media, the likely hood is that a certain percentage of people would think it is true.( Look no further than the fact that 20% of respondents to a recent poll "believe" President Obama is a Muslim.) But, let's get back to Treasury Secretary Geithner.

Despite numerous newspaper corrections, and Mr. Geithner's many objections to news interviewers falsely characterizing him as a former Wall Street banker and Goldman associate, if you asked people on the street if Geithner was a Goldman associate or Wall St. banker you'd most likely get a resounding yes. Now it is certainly true that Mr. Geithner served as the president of the Federal Reserve Bank of New York. It is also true that Geithner worked under his mentor Robert Rubin (a Goldman guy), during his stint with the Clinton administration. But the truth of the matter is that Tim Geithner is neither a Goldman associate or former Wall St. investment banker.

Does he have relationships with individuals from Goldman and the Wall Street investment community? As a former president of the Federal Reserve Bank of NY, and his previous roles in government and the World Bank, how could it be possible otherwise?

As pointed out in today's NY Times in a story by Jackie Calmes, Treasury Secretary Geithner "Struggles to Escape a Past He Never Had."  Calmes says it is probably a good thing that  President Obama has chosen Geithner to be the point man on opposing the extension of the tax cuts for the wealthiest 2% of Americans. As Geithner points out, the 10 year cost of extending the tax cuts for that 2% will amount to a loss of approximately 700 Billion dollars to the government. Furthermore, Geithner claims "it is not the government's role to borrow money from future generations to pay for tax cuts for the wealthiest 2% of Americans.

There has been a lot of rhetoric coming from opponents of letting the tax cuts expire. At the same time the opposition argues that the current administration is spending our children and grandchildrens future by so much deficit spending. Keep in mind that the tax cuts in question, along with the prescription drug program for seniors (a good thing), were paid for by, you guessed it, deficit spending. I guess at the end of the day, it's not a matter of how we spend money we "don't have", it's more a matter of who is in charge of spending it.  Perception and reality, it all depends on whom you ask.