Treasury Sec. Tim Geithner, speaking at a Joint Economic Hearing, got into a quite the tizzy with Rep. Kevin Brady (R-TX). On one level, it's just two guys yelling at each other. On another level, it's a glimpse at why an idea as basic as "We should reform our profligate banking system" can break down when you run it through the political sausage factory.
A taste of the skirmish, via Real Time Economics:
"It is a great privilege to serve this president," Mr. Geithner responded. "I agree with almost nothing you said."
Mr. Geithner then took it a step further: "You gave this president an economy falling off the cliff."
Mr. Brady wasn't done: "Remind me, Mr. Secretary, what post were you holding when President Obama took office?"
Geithner: "I was the President of the Federal Reserve Bank of New York."
Brady then accused him of "shirking responsibility for the design of this bailout."
Mr. Geithner said the government's steps were "absolutely necessary to break the back of this financial panic." He said without the Obama administration's steps, "you would have an economy still falling, not growing."
Brady wasn't done. "The public has lost all confidence in your ability to do the job."
Geithner wasn't done either. "If you look at any measure of confidence in the financial system, it is substantially higher today than when the President of the United States took office."
Brady: "This is your budget! This is your bailout!"
"Time has expired!" Rep. Carolyn Maloney (D., N.Y.) finally shouted to end the exchange. She chairs the panel.
The GOP and its tempest-in-a-tea-partiers have stoked populist rage at a lot of Big Things, like Big Government and Big Banking, which would lead you to believe that they'd get behind a Big Bill to reform the latter. The only problem is that they still don't trust the former to get it right. As a result, the parts of financial regulation that rely on the government -- like a centralized referee for Tier 1 banks and expanded powers for our constellation of regulatory agencies -- could face stiff opposition from Republicans. Indeed they already have.
At the same time, the Republican kind of has a point about Geithner's former job. As the president of the Federal Reserve Bank of New York, Geithner was charged with overseeing the stability of our NYC-centric banking system during the very months that the system crumbled. Eliot Spitzner has written, with healthy doses of paranoia, about the New York Fed's cozy relationship with the nation's most powerful investment banks. It will be interesting to see the early polling when the administration tees up financial regulation -- whether the public will doubt the government can reform a system it recently failed to regulate, or whether anger at the banks will unite both Congress and its constituents around a bill.