As Timothy Geithner receives 34 No votes on his confirmation, John Berlau reflects on how Geithner can right his wrongs. Geithner can start by calling for an end to government policies that prop up failing institutions with taxpayer dollars.
John Berlau, Director of CEI’s Center for Investors and Entrepreneurs, released this statement today on the confirmation of Tim Geithner:
It looks as if Timothy F. Geithner will be confirmed tonight, but with nagging questions remaining about his failure to pay four years worth of self-employment taxes and his role in designing the Trouble Asset Relief Program. A Rasmussen poll finds that 41 percent of Americans oppose his nomination and two-thirds think that his confirmation would show that different standards and rules apply to powerful people. This impression was confirmed by statements such as that of Sen. Kent Conrad, D-N.D., that “in normal times, that would be enough to cause me to oppose his nomination, but these are not normal times.” The perception that both corporations and individuals can be “too big to fail” because of their supposed importance undermines the very credibility needed to restore confidence in our financial system.
While his serious tax infractions should still disqualify him from heading a department that enforces the nation’s tax laws, there are steps that Geithner can take to assuage the concerns. He can call for an end to government policies that prop up failing institutions with taxpayer dollars. The failures could be orderly and arranged to minimize damage to the financial systems, but big corporations must be allowed to fail, just as small businesses do every day. That would send a message that no business or individual plays by a different set of rules.
And given his own serious breach of the tax laws, which he only corrected completely after being chosen as Treasury Secretary nominee, Geithner should show sympathy with the difficulties of individuals and small businesses in dealing with the complexities of taxes and regulations. New financial regulations from the Treasury Department should be carefully thought out so that they don’t hinder small investors and entrepreneurs. If Geithner reflects on and learns from his personal and policy errors, he can be a more effective Treasury Secretary.