Treasury Secretary Tim Geithner appeared on “The Charlie Rose Show” on PBS Tuesday night, where he sounded an almost theological note on the public reaction to extravagent Wall Street bonsuses.
DealBook quotes Geithner:
Right, they made some exceptionally bad judgments. And not just in compensation practice and how they ran their firms, how much risk they took, but as the crisis intensified. And as they got themselves in the position where they needed exceptional assistance from the government, many of those directors made things dramatically worse by continuing to pay out really unjustifiable bonuses to their senior executives and they were losing tens of billions of dollars. That made this basic crisis of confidence much worse, because people understandably looked at that and said how could that be tenable? And that leaves a deeper loss of basic faith and quality of leadership in our institutions, and we’re not going to let that happen again.”
From a crisis of confidence to a deeper loss of basic faith. Wow. Are things so bad that they’ve sapped our souls and not just our bank accounts?
Uh oh. Somebody in the White House might want to give Geithner a call and let him know that this kind of talk is infamously dangerous. It’s too easy to listen to Geithner talk and hear the echo of Jimmy Carter’s famous malaise speech.
“The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our Nation,” Carter said.
That speech is often seen as a political disaster that may have guaranteed Carter’s loss to Reagan one year later.