First the Federal Reserve turns itself into a hedge fund (look at its balance sheet), then the Treasury turns itself into a hedge fund (Fannie and Freddie, Citi to name a few) and now the President is playing investment advisor. You know, when I was a banker, at least I had to take a few exams before being authorized to give advice.
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My favorite part of the article is economist Geithner talking about energy:
“Now, if people don’t change how they use energy, then they will face higher costs for energy,” Geithner acknowledged.
Let’s see now … we are proposing a carbon cap and trade program in the current budget with the express purpose of raising the cost of energy. Do you think Geithner was reminding people of that … or was he “threatening” them that our continued use of energy would cause higher prices, so we need to adopt the cap and trade plan?
- Since when was the Treasury Secretary supposed to be directing energy policy?
- Imagine an analogous statement … “if people do not change how they use computers or bananas or chickens …. then they will face higher costs for computers, bananas and chickens.”
My introductory students would get an F for my course if they made an unqualified statement like Geithners … but I guess you are allowed to do those sorts of things when you command $3.6 trillion of other people’s money.
How come it seems that the only economists that think these action help the economy are the ones that have the positions in government (except Krugman)? Is there some sort of promotion process that factors in incompetence?