Geithner's Had Enough, Declares Will Not Serve Second Term as Treasury Secretary
Politics / US Politics Jan 26, 2012 - 02:58 AM GMTBy: Bloomberg
BLOOMBERG EXCLUSIVE: Treasury Secretary Tim Geithner spoke to Bloomberg Television's Trish Regan today and said that President Obama is "not going to ask me to stay on, I'm pretty confident. I'm confident he'll be president. But I'm also confident he's going to have the privilege of having another secretary of the Treasury...Something else for me."
Tune in to the full interview on Bloomberg TV tonight at 8pm/ET for "The State of the Economy," a live one-hour special event hosted by Trish Regan.
Geithner on whether he'll serve as Treasury Secretary for another four years if President Obama is re-elected:
"He's not going to ask me to stay on, I'm pretty confident. I'm confident he'll be president. But I'm also confident he's going to have the privilege of having another secretary of the Treasury... Something else for me."
On Wall Street's frustrations with Dodd-Frank:
"I would not worry too much about them. I would worry more about the basic confidence of Americans that they're going to face more opportunities, more likely to find a job, keep a job, save for college, save for a dignified retirement...They're under more pressure. No industry likes reforms that change the way we do business. But we're doing that because we have to protect the economy from ever facing again the type of crisis we saw. And I am very confident that these reforms will make our financial system a stronger financial system, a more stable one, a more safe one, where consumers feel they have more protection, investors feel better protection, people are less likely to be victimized by the behavior of a few bad actors. That's what these reforms are going to do."
On whether money that's being made off private equity investments should be taxed at a higher rate:
"Absolutely. And the president's long supported that. And you see a lot of support for trying to do that. And it serves a basic principle of fairness in this context. So we're going to work to doing that. But we're going to try to go beyond that, too, because just doing that is not enough."
On Europe's crisis:
"I think it's important to recognize that they're making progress. They really are now. They're doing a lot of things to put in place reforms that help fix their financial problems, hopefully help them grow more rapidly...They got a lot of work to do. But that comprehensive a strategy, reforms combined with making the financial system stronger, combined with a stronger firewall to support those countries that are reforming, those are the things they have to do to make this work."
On the last time he spoke with German Chancellor Angela Merkel:
"I haven't seen her in a while, but I talk to my colleague, the finance minister, all the time. I talked to him last week. And I'm going to see a bunch of my colleagues in Davos then, of course. One of the reasons I'm going is to have a chance to meet with them again and think about the stage of strategy."
On what he'll tell his colleagues at Davos:
"We tell them to keep at it, make sure they deliver and put in place a stronger, more credible firewall so that investors around the world know that, if they invest in Europe today, those investments will be rewarded with the support necessary countries that are making really tough decisions, in Italy and Spain, in Ireland and Portugal, those countries have the support they need for it to work.
On whether the U.S. doesn't have influence on the important discussions that European leaders are having right now:
"No, I don't feel that way. We have a very close relationship in this. And we work very closely together. They ask us for advice. They want to learn from the mistakes we made and the things we got right. And they need the support of the world for this to work. And so my own experience is they're very open to working with us, and we have to do it together."
On whether Europe is too big to fail:
"Europe is a huge part of the world economy, and that's why it's so important to us and for countries around the world that Europe be more effective, more successful in getting this under control. It's very important that they get this right. And as I said, they're making some progress, but they've got a lot of work to do."
On the manufacturing economy in the United States:
"If you look across the American economy today, even with all the trauma caused by the crisis, even with all the damage still out there because of the crisis, exports are getting stronger and manufacturing stronger. Energy is stronger. Agriculture is stronger. Industrial production is stronger. You're seeing encouraging signs of recovery, even though we still face a huge amount of challenge. And what we're trying to do and what you heard the president say last night is, for us to grow faster in the future, to create a lasting foundation for a stronger economy in the future, to create more opportunity for middle-class Americans, we have to be investing more in this country, getting Americans the skills they need, making us more productive in using our energy resources. Those things are really important. We do more of that, we're going to be very strong in the future."
On what else the Treasury can offer to make it more enticing for companies to manufacture in the U.S.:
"One thing we can do is change our tax system so we're creating more powerful incentives for companies to invest here, because, again, we want the stuff that the world needs, stuff Americans are uniquely good at, to be produced in the United States by American companies and by foreign companies, like you see Siemens today. What the president proposed is that we reform our tax system and create stronger incentives for investment in manufacturing here."
On what President Obama meant when he said that "every multinational company should have to pay a basic minimum tax" during last night's address:
"Around the world, over the last several years, you've had countries compete in a bit of a race to the bottom, by lowering their tax rates to try to attract investment by other countries. So for us to compete in this world, we have to really do two things. One is we have to change our tax system so that we're trying to catch up to them a bit, so we're not sitting up there really high against the rest of the world, and create more incentives for investment here, but we also have to change parts of the tax system that now encourage people to build that next plant outside the United States. It makes no sense for the tax system to be encouraging people, incenting companies to be building jobs outside the United States. Now, American companies are global companies. They're going to be producing around the world so they can serve those markets. But we think we have a very good shot at a lot of the things the world needs being built here in this country."
On whether there's a risk of penalizing American companies that send jobs abroad:
"I don't think so. We're very confident that we can design - working with Congress - a set of tax reforms that will improve the incentives for investing, make manufacturing stronger. We think we can do that."
On whether that includes a lower corporate tax:
"We've got to lower the rate. We've got to do that by eliminating a bunch of special deductions, loopholes, things like that. But, again, the basic imperative should be - and this is what should guide reform of the tax system - is to make it more likely American companies and foreign companies are investing in this country, creating and building things here."
On how to compete with the Chinese labor force:
"It depends on what you build. But in a lot of things that matter, that cost of labor is one of the least significant parts of the cost of producing something. And what makes companies successful and competitive is how they use technology to make those workers more productive. And it's that combination of things that we have been uniquely good at as a country. We want to make sure we're getting better at that. We can't stand still. We got a lot of work to do in that context. But that's the challenge we have."
On whether a return to America's manufacturing roots will be the major driver of growth over the next 10-20 years:
"We think manufacturing can play a broader role, but the great strength of the American economy is the diversity of strengths we have...We're very good in a range of sectors like...And our strength is the breadth of those strengths...The government needs to be doing a better job of creating better incentives to invest here, equipping the American people with better skills so that they can compete, and we're going to work very hard in making more progress in that area. We're making progress, but we've got a lot of work to do."
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