Thursday, September 16, 2010

Tim Geithner On Economics

Monday's edition of the Wall Street Journal published a news article entitled Geithner Warns of Risk of Washington Inertia.

Citing the Treasury Secretary as concerned about sluggish US economic performance due to a lack of federal action, the piece states,

"He said the U.S. can no longer rely on consumer spending, which has long powered the economy, to be the growth engine that leads the recovery this time around and said Washington needed to plant the seeds for investment and exports."

If that passage doesn't chill the blood of US private sector business people, what will?

Thinking that perhaps Geithner is, unbeknownst to me, an economic sage, I checked his educational background. His undergraduate degree was in international and Asian studies. The closest thing to a PhD in Economics he possesses is an MA in International Economics from the Johns Hopkins School of Advanced International Studies. I think it's fair to characterize that as more of a political science degree, and less of a hardcore macroeconomic or microeconomic degree.

Thus, Geithner would not appear to have academic credentials to utter credible pronouncements on the seismic shift in drivers of the US economy.

As a former manager of functions and departments in several companies, including consulting firms, I'm used to making decisions involving matters on which I may not have personal academic expertise.

For those situations, I do what most effective managers do. I ask questions, identify assumptions and uncertainties, gather information from credible sources, and choose an option.

In this blog, I've often opined on economic matters, but only in light of, and with explicit references to the views of and evidence provided by esteemed, degreed, generally respected economists.

It causes me more concern than I have already had regarding Geithner that he issues silly, apparently unsubstantiated statements as if they were established or empirically-supported economic fact. No reference to the work of legitimate economists.

Instead, we have the Treasury Secretary simply declaring a preference for government-directed spending on investment and exports. Meaning that he believes a few Washington bureaucrats, elected and/or appointed, are more capable of directing our nation's economic resources than are the millions of investors and business people to whom those resources they ultimately belong.

Very scary stuff, indeed.

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