, January 26, 2009—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.
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