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Reich writes: "I'm trying to remain optimistic that the President and congressional Democrats will hold their ground over the next month as we approach the so-called 'fiscal cliff.'"

Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)
Portrait, Robert Reich, 08/16/09. (photo: Perian Flaherty)


Will Tim Geithner Lead Us Over or Around the Fiscal Cliff?

By Robert Reich, Robert Reich's Blog

27 November 12

 

'm trying to remain optimistic that the President and congressional Democrats will hold their ground over the next month as we approach the so-called "fiscal cliff."

But leading those negotiations for the White House is outgoing Secretary of Treasury Tim Geithner, whom Monday's Wall Street Journal described as a "pragmatic deal maker" because of "his long relationship with former Treasury Secretary Robert Rubin, for whom balancing the budget was a priority over other Democratic touchstones."

Geithner is indeed a protege of Bob Rubin, for whom he worked when Rubin was Treasury Secretary in the Clinton administration. Rubin then helped arranged for Geithner to become president of the New York Fed, and then pushed for him to become Obama's Treasury Secretary.

Both Rubin and Geithner are hardworking and decent. But both see the world through the eyes of Wall Street rather than Main Street.

I battled Rubin for years in the Clinton administration because of his hawkishness on the budget deficit and his narrow Wall Street view of the world. During his tenure as Treasury Secretary, Geithner has followed in Rubin's path - engineering a no-strings Wall Street bailout that didn't require the Street to help stranded homeowners, didn't demand the Street agree to a resurrection of the Glass-Steagall Act, and didn't seek to cap the size of the biggest bank, which in the wake of the bailout have become much bigger. In an interview with the Journal, Geithner repeats the President's stated principle that tax rates must rise on the wealthy, but doesn't rule out changes to Social Security or Medicare. And he notes that in the president's budget (drawn up before the election), spending on non-defense discretionary items - mostly programs for the poor, and investments in education and infrastructure - are "very low as a share of the economy relative to Clinton." If "pragmatic deal maker," as the Journal describes Geithner, means someone who believes any deal with Republicans is better than no deal, and deficit reduction is more important than job creation, we could be in for a difficult December.



Robert B. Reich, Chancellor's Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers "Aftershock" and "The Work of Nations." His latest is an e-book, "Beyond Outrage." He is also a founding editor of the American Prospect magazine and chairman of Common Cause.

 

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+44 # BradFromSalem 2012-11-27 13:58
Robert Reich, maybe inadvertently, hit the nail on the head when he described Geithner and Rubin as decent men, that unfortunately see the world through Wall Street eyes. Obama might be misled in a field that his expertise was not acquired until after he was elected. So, of course he would also see the world through the eyes of decent men that see things through a Wall Street prism. On top of that, they were in charge when the last the economy was performing well.
And that is the biggest problem. Obama is himself a decent man, who has depended on decent men with an outlook that while once successful, was not and is not sustainable.
Which is why he needs to hear other voices, strong voice, that can challenge Geithner and other people that despite their good intentions, should never be handed the keys to the economy. They always route the economy right down the middle of Wall Street when they should be heading to Main Street.
 
 
+45 # dbriz 2012-11-27 15:01
Quoting BradFromSalem:
Robert Reich, maybe inadvertently, hit the nail on the head when he described Geithner and Rubin as decent men, that unfortunately see the world through Wall Street eyes. Obama might be misled in a field that his expertise was not acquired until after he was elected. So, of course he would also see the world through the eyes of decent men that see things through a Wall Street prism. On top of that, they were in charge when the last the economy was performing well.
And that is the biggest problem. Obama is himself a decent man, who has depended on decent men with an outlook that while once successful, was not and is not sustainable.
Which is why he needs to hear other voices, strong voice, that can challenge Geithner and other people that despite their good intentions, should never be handed the keys to the economy. They always route the economy right down the middle of Wall Street when they should be heading to Main Street.


BradFS...you are being too kind. "Decency" is in the eye of the beholder.

You are a decent man aren't you?

Likely with an IQ no better or worse than those you are being kind about.

If you have figured these things out with the resources available to you, do you doubt Obama shouldn't be able to figure them out with his IQ and resources?

It's not an intellectual proposition it's a political one. This has been and is, about protecting political benefactors.

The time for cutting Obama slack is over.
 
 
+17 # maddave 2012-11-27 22:52
Quote:
The time for cutting Obama slack is over.
Unquote;

debriz, Bro, you beat me to those exact words! It's past time for slack cutting.

This highly hyped "Cliff Crisis" brings to mind the British invasikon of Galiopli in WWII. The beach & hills were defennded by Turks under the command of an officer who went lon to become Turkey's great leader Kamil Ataturk, men un
 
 
0 # maddave 2012-11-27 22:54
DISREGARD THAT LAST COMMENT! I inadvertently hit the "send" button.

The complete thought follows,

maddave
 
 
+23 # maddave 2012-11-27 23:29
Quote:
The time for cutting Obama slack is over.
Unquote''

dbriz, Bro, you took the words right out of m y mouth.

This highly hyped "Cliff Crisis" vis a vis Obama brings the WWI British invasion of Gallipoli to mind. The defending Turks were commanded by Mustafa Kamel Ataturk. The invasion was a surprise, and the defense of the peninsula was critical to the survival of Turkey as a nation. Victory for either side was far from certain.

Knowing the stakes of the battle, Ataturk addressed his men with one of the great military exhortations of all time:

"I did not bring you here to fight, I brought you here to die!"

Both sides took heavy losses, But the Turks prevailed . . . and Atatturk became Turkey's leader national hero.

The stakes topday are NOT just tax issues, the debt ceiling or sequestration! At stake is the financial and political course of this country through tortuous waters over the next four years and beyond.

You have a mandate, Mr. President. Retreat is NOT an option. Get on with it!
 
 
+9 # wantrealdemocracy 2012-11-28 07:48
At stake is not only the political and financial future of our nation but our democracy is in peril. The big boys, even the 'decent' ones, want to cut programs for the people of this nation and regulations to protect our environment and keep the endless wars going and expanding. We the people have the exact opposite goal. We want peace and prosperity for all and just treatment for all the people on earth. Our 'leaders' are going the wrong way and we need to get out on the streets to educate them of a better way and to frighten them enough to listen to us.
 
 
+10 # BradFromSalem 2012-11-28 05:50
Dbriz,

As you say, decency is in the eye of the beholder. So to discuss that point is moot.

I never said we should cut Obama or any Democrats any slack. In fact, we must continue to keep the pressure up to resolve this fiscal showdown with a plan drawn directly from the Progressive Caucus' "Budget 4 All" I have already written my representatives in Congress on that very point and will do so again.

What I do advocate is that we stop attacking Obama as if he has already given away the house. This is a showdown and the President holds most of the leverage. To expect that he will do exactly the same thing he did 2 years ago, is not necessarily true. The economy is different, the latest election results confirms a progressive trend in the populace. In 2010, there were conflicting signs if that trend would hold.
Smart leaders go where the people will follow, Obama is a smart man. He makes mistakes such as following fiscal advice from the Clinton guys, but he has also demonstrated a critical ability in a leader. He learns from his mistakes. Geitner, Rubin,et. al. have indeed advocated policies that are counter to the Progressive agenda, and not beneficial to the nation. Those were mistakes of Clinton and Obama.
The bottom line is that we must let the President Congress know where we stand, so they can lead in that direction.
The vitriol toward the President does not help.
 
 
+3 # dbriz 2012-11-28 13:05
BradFS...I am intrigued by your assertion that the election results "...confirm a progressive trend...".

In what ways?

What about Obama's reelection causes you optimism in the area of civil liberties?

What proposals has he endorsed that will end corporate cronyism? Too big to fail?

How has he proposed to limit the stranglehold on foreign policy by the MIC/CIA/Bankste r oligarchy?

When did he say he would refuse to consider "adjustments" to SS and Medicare?

Are these not areas of deep concern to progressives?

Here is what progressives need to wake up to: Obama is not a reformer. He is a product of the establishment and will not rock the boat. He will triangulate for another four years because it's his nature and it's what his deep pocket supporters want him to do.

Food for thought: Libertarian/con servatives, populists and even a few "moderate" Republicans would happily join the crusade with progressives over these issues.

If the antiwar, antitrust, civil liberties tent isn't broadened in a big way soon, a few thousand letters from progressives will do nothing.
 
 
+2 # BradFromSalem 2012-11-28 20:51
DBriz,

I was not talking about Obama when I noted that the elections are trending toward a more Progressive oriented electorate. In 2006, the Dems won back both Houses and in 2008, they also won the White House. The 2010 election also had some strong indicators of a left wing resurgence. In 2012 that message is l,oad and clear that the majority of Americans prefer the left wing solutions to the stale right wing answers.

The bottom line is that in 2012, Barack Obama was clearly the candidate that represented more of my views that Romney. After supporting him, I refuse to take a shit on him because I don't agree with how I think the fiscal showdown will end.
 
 
+17 # SMoonz 2012-11-27 22:16
Let me get this straight. A Chicago Law School grad, Constitutional Law Professor, attorney and Senator, now President is being misled? Seriously?

You really feel that Obama does not have the intelligence to understand or grasp economic policy so much so that he relies entirely on other people?

You have got to be kidding me. Obama understands very well what is going on around him and is working for corporate interests. He works very well for them I must say.
 
 
+1 # 666 2012-11-28 05:01
BO's decision-making and reliance on others has been pretty well documented over the past 4 years. It's not so much that he's being misled as it is his misplaced trust and vanity are misleading him.
 
 
+8 # BradFromSalem 2012-11-28 08:23
SMoonz,

Did you vote for Obama after knowing what a corporate shill he is?

He has not even started his second terms and already, without Obama actually doing anything counter to what he said he would do, you are all attacking him with sharpened spears.

I know who Obama is. And he can be convinced. The problem in 2009 was that he was naive about how irrational the Republican position would be. He made mistakes, trusted people that provided him with valuable insights, but were not representative of the American people that voted for Obama. Give him a chance to negotiate this showdown. Wasn't that why you voted for him? (If not you personally, then all the people here that did.)
 
 
-3 # SMoonz 2012-11-28 22:37
You make me laugh. I really think or hope you are asking a rhetorical question.

I did not vote for Obama in 2008 or 2012. I voted for a 3rd party candidate because I know he is a corporate shill.

In fact, you have previously accused me of not liking Obama or Holder because they are black. Of course you never replied when I set the facts straight.

Now you want to come around as if you always knew he was a corporate shill and somehow I didn't?

Ah how things get funny after an election.
 
 
+3 # maddave 2012-11-28 09:07
BALDERDASH, SMoonz!! - It's quite obvious that you have absolutely no concept of the size and complexity of the US Government.

Another quote attributed to Henry Ford: "Being a genius is NOT knowing everything. It's knowing where to find it when you need it." And so it is with the POTUS!

His entire job is based upon delegation and dependence upon his advisors to handle the details. Granted, Ronald Reagan took that concept much too far, but this or any other government (or large organization) will quickly grind to a halt under a micro-managing leader.

In a job where you have 10,000,000+ employes and 70 layers of administration from top to bottom, you can't know or do it all - you gotta trust SOMEBODY.

If you have a better idea on how to do the job, Sir, the world is awaiting your revelation.
 
 
0 # SMoonz 2012-11-28 22:39
Here is a simple idea. Don't place people with special interests in Cabinet positions. The Cabinet looks like a Who's Who of Wall Street people.
Enjoy the revelation.
 
 
+1 # maddave 2012-11-29 15:31
Yes, that IS true. You reveal nothing new. BUT in this case YOU set the focus on Obama - period. I answered vis-a-vis Obama - period.

I can't address what you wanted to say, but since you've broadened the subject, I remain on point: POTUS must delegate and trust his Cabinet Members & Department Heads to do the job for which they were appointed. That Gaithner (sp?) ---like Sommers--- ought to have been history by now is probably a good call, but it is still second guessing. I withhold judgement pending more info. You might do likewise . . . unless, of course, you can show that know more than the rest of ius.
 
 
+13 # Smiley 2012-11-27 22:58
Geitner, like the new appointed president of Greece and the fiscal leaders in Germany France and now England (plus a few other countries are all ex(?) Goldman Sacks Execs. Is it a world wide coup?
 
 
+4 # dkonstruction 2012-11-28 06:47
Quoting Smiley:
Geitner, like the new appointed president of Greece and the fiscal leaders in Germany France and now England (plus a few other countries are all ex(?) Goldman Sacks Execs. Is it a world wide coup?



Thom Hartman's latest piece speaks directly to the connections between the Greek economic problems and Goldman Sachs...so, yes, in some ways it is a world wide coup.

http://truth-out.org/opinion/item/12996-goldman-sachs-global-coup-de-tat
 
 
-2 # RLF 2012-11-30 06:06
Why is it that Obama always gets a wash with folks? He has proven himself time and again a supply sider...like Ruben, Clinton,Geithne r, and every other republican on the planet.
 
 
+41 # MainStreetMentor 2012-11-27 15:15
Secretary Geithner needs to be replaced. He is the Poster Child for Wall Street Greed, and as such is a detriment to ANY of Obama's or the Democrats financial agenda. Obama should replace him as his first order of business following his inauguration. If and when that occurs, Geithners' potential for swaying direction to, or from, the fiscal cliff, will be rendered moot.
 
 
+31 # D12345 2012-11-27 18:36
Reich is such a suck up, it is embarrassing. Geithner and Rubin are "hard working." I have no idea what that means. And who in the world suggested they weren't? What next, they are fine bowlers?

As for the "decent" part....Alterne t article on the most corrupt capitalists in US....Rubin comes in at #1...!

http://www.alternet.org/story/146819/america's_ten_most_corrupt_capitalists

An excerpt:

"Rubin's most stunning deregulatory accomplishment in office was also his greatest act of corruption. Rubin helped repeal Glass-Steagall, the Depression-era law that banned economically essential banks from gambling with taxpayer money in the securities markets. In 1998, Citibank inked a merger with the Travelers Insurance group. The deal was illegal under Glass-Steagall, but with Rubin's help, the law was repealed in 1999, and the Citi-Travelers merger approved, creating too-big-to-fail behemoth Citigroup."
 
 
+5 # Activista 2012-11-27 21:39
ANd US SENATE is doing what? More sanction against Iran (part of defense/war budget). Levin said. "Going in, I favor strengthening any way we can the sanctions against Iran."
The sanctions would end "Turkey's game of gold for natural gas," how many children will suffer in Iran for Apartheid Israel. STOP WAR ON IRAN. USa is being blackmailed by Israel. This president and senate is INSANE.
 
 
+9 # Dave45 2012-11-27 22:32
Decent people do not stand idly by as their superiors spend a portion of the day determining whom to assassinate.
 
 
+14 # 4yourinformation 2012-11-27 23:01
The real sad truth is that there will not be enough pressure mustered from Obama's left to get bad policy stopped because there are so many starry eyed Dems that are sitting on their couches watching John Stewart and laughing at GOP meltdowns.

The amount of true progressives that actually do anything in politics worth while is too small to matter. And, the second that anyone on the left actually acts to criticize Obama and try pushing him to do the right thing gets attacked by these same couch sitters that reach for the panic button and cry out that "he's doing the best he can" and "your helping the Rethugs" ad nauseum.

They just give him a complete free pass and ignore the betrayals. Such idiots.

We should try anyway. I hope as many real progressives as possible make the biggest noise we can.
 
 
+3 # 666 2012-11-28 05:06
since the label "progressive" has being increasingly appropriated by the rightwing obama dems (just another buzzword), I suggest those of us on the left just damn the frames and call ourselves "leftists"...
 
 
+6 # rlhollow 2012-11-27 23:37
There must be an anti-Geithner/R ubin voice in the Obama cabinet that is sequestered or gagged. Who is it? Will we find out before a FRONTLINE Special?
 
 
-8 # Vern Radul 2012-11-28 01:36
Still trying to sell the big lies I see, Robert. Old Joe Goebbels would be swelling with pride reading this piece.

You're an intelligent man. You can't possibly be stupid enough to actually believe that anyone else could possibly be stupid enough to think you're making any sense here, can you?
 
 
+11 # m... 2012-11-28 04:16
I voted for Obama. I did so because I view him as a very slightly lesser of two evils in an election process that leaves America with two very well known and crappy choices at the top of the ballot above a small trailing list of completely locked-out unknowns at the bottom of the ballot.

Lets not delude ourselves. The last four years have clearly shown Obama's Administration to be a Wall Street Insider. Administration. He is who he has been. So who believes he will suddenly become the guy who lives up to his infamous rhetoric?
He leaves me more cynical daily.

He and most Dems talk of this BS Fiscal Cliff just as the Republicans do-- as if its like a branch of Al Qaeda on the verge of unleashing a deadly attack everywhere at a magically preordained moment unless some dramatic 'sacrificial' stuff happens right freekin now!
We are driven by every talkinghead corner of the Media to fear and dread this Fiscal Cliff as if its to send us to our knees in desperate, begging prayer to plead for salvation from it.

They are playing with the minds and lives of most Americans in order to protect the wealth of Wealthy Big Wigs just as they are doing in Europe because this Wall Street President and most members of Congress are about rain down a plague of Austerity Measures labeled 'Economic Salvation-The Road to Prosperity' upon everyone except the Golden Vultures of Wall St., whose wealth is to be protected at any cost to everyone but them.
 
 
+4 # in deo veritas 2012-11-28 06:44
Why Obama would ever trust anyone from Goldman Sachs is beyond reason! Geithner and Summers along with the Federal reserve are the main architects of our failure to recover the economy. The bailouts would never succeed since the Fed keeps printing paper that grows more worthless with each day since there is less to back it up. What is the dollar actually worth because of this? $.50 or less? The Fed should be unplugged and we go back to money actually issued by the government. Also Obama and this crew will do everything they can to prevent the reinstatement of Glass-Steagall which is the only way to stop the reckless "investment banks" from gambling away what is left of our financial resources. It is becoming painfully evident whose side they are on.
 
 
0 # cynic 2012-11-28 07:17
Everyone should google 'The Money Masters'. It will help to clarify much about world finance.
 
 
-1 # DRPJJ 2012-11-28 10:00
Sorry Mainstreetmento r, After Obamas' inauguration will be too late to stop the pandering to the GOP by giving up Soc Security, Medicare and taxes on the 1% because of the false argument that we are "going over the cliff." The American Citizens' "entitlements" by virtue of having paid in part of their salary over the years, in my case 66 or them, are NOT ON THE TABLE, and that should be finalized before the end of his first term. Boehner had him by the short hairs last time around, this time let him act like a DECENT MAN and do what is right for America...
 
 
0 # fredboy 2012-11-28 12:48
Tim Geithner could not lead piss into a quart jar.
 
 
+3 # charsjcca 2012-11-28 15:23
Over, but we will survive. In 18 months we will not be thinking or talking about a fiscal cliff
 
 
-1 # union man 2012-11-28 19:38
If you want to know what's going to happen check out Micheal Hudson .com he Knows what these @#$%^ are up too.
 
 
-2 # Big Jake 2012-11-29 07:23
Typical Reich. I question the "good men" attribute.
Like Roosevelt, Obama is listening to the experts or lapdogs of the money men.

The Roosevelt plan did not work. The economy just did not recover. Then like now, they skipped the income creation side of the equation. For Roosevelt, the change was force and we embarked on policies that gave us our greatest prosperity---no t the war but the war forced the change. That lasted by law until 1952 and we are now suffering the conplete effects of monetizing debt vs. real wealth.
Our economy would have crashed in the mid-90's if Clinton and Rubin had not rewarded the money interests and securitized mortgages and the new money created by this blew up in our face in 2007. We now have nothing new,so far, to monetize and we will continue to stagnate or worse until we change course.
 
 
0 # charsjcca 2012-11-29 09:18
The fiscal cliff is the best thing that could happen to America.
 

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