David Brooks Misses the Point
David Brooks' New York Times op-ed column today on Tim Geithner (mentioning in the lead my Portfolio cover story) misses the point, I think.
The problem with Geithner's approach is not whether or not the banks are recovering because of the TARP program, but the degree to which the profits of the biggest banks have not been matched by a commensurate ability to lend.
Money is still tight. A couple of weeks ago, the Federal Reserve reported that banks "kept tightening lending standards for companies and consumers last quarter, reinforcing the central bank’s decision to leave its benchmark interest rates at record lows for a long time."
Simply put, the absence of a continued bank-caused financial crisis is not a reason to cheer. The public is justifiably upset that all those billions of dollars have made bankers richer without showing any benefits in terms of loosened lending policies. That's not an unreasonable expectation, and enough time has passed that people have a right to ask: what's in it for me? Why have we not seen any benefits to the population as a whole (apart from the banking system not falling apart) from the TARP program?
I don't believe that history will be kind to Geithner, or President Obama, if all he can show for his efforts, and our billions, is the absence of a crisis.
© 2009 Gary Weiss. All rights reserved.