Treasury Secretary Timothy Geithner told National Public Radio in an interview Tuesday that he strongly believes we are on the road to recovery, but it won't be fast. He said "we were in a very deep hole . . . It's going to take a long time to repair the damage done to confidence." But he sees people spending more and businesses starting to invest again, all good signs.But for the jobless, the news is not as good. He thinks we won't start to see good news on the job front until the Spring, according to an interview on Good Morning America. He is not expecting any job growth in December. But he did tell NPR that the economy is creating jobs again and people are going back to work. He said, "People can be more confidant about their financial future, their financial security."
A key priority for Geithner now is to work with Congress to get financial reform legislation passed. Right now, he's not expecting a second wave of financial crisis. But, he added, it's important that "we build a more stable financial system. We constrain risk taking in the future."
Right now the biggest risk the economy faces is the fact that "banks are not lending enough and not going to provide the capital businesses need to grow for the economy to strengthen going forward." He also believes the American public has lost its basic confidence and trust in the banks. He expects the public to question every judgment of the banks, including "how they pay their employees, how they run their institutions, how they meet the needs of their customers, how much they support this very important effort of reform across the system is going to be important to rebuilding that basic trust and confidence."
When questioned by NPR about whether he is too close to the big banks, he defended his role in the financial rescue by saying while he was forced to do a bunch of things that no Treasury Secretary should ever have to do, they were necessary to make sure that "we were rescuing this economy and bringing forward the time when we were going to put people back to work."
While he agrees he spent a lot of time talking to the big banks, he said it was necessary to spend that time figuring out what it was going to take to fix the broken financial system. But it was also important to spend time listening to the broader business community, not just the large banks. He said he did spend time with the broader business community and the small community banks to understand what was happening across our financial markets. In fact he said his first meeting in his job as Treasury Secretary was with people running community banks. He continues to spend more time with community banks and bank associations than he does with any individual large bank.
He strongly believes that the economy "would still be shrinking, unemployment much higher than it is today if we did not do the tough things, the hard things, the politically unpopular things to save a financial system in free fall." Now it's time to make sure that the recovery gathers full steam.
Geithner: On the Road to Recovery, but in the Slow Lane