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Secretary Geithner vows not to devalue dollar

U.S. Treasury Secretary tells Palo Alto audience the economy is 'definitely healing'

America must invest in infrastructure and education to spur economic recovery, but it will not devalue its currency to gain a competitive advantage over other nations, U.S. Treasury Secretary Timothy Geithner told an audience in Palo Alto Monday afternoon.

Geithner, who served as president of the Federal Reserve Bank of New York before becoming Treasury Secretary on January 2009, defended the Obama administration's efforts to revive the economy after the Great Recession and addressed America's ongoing dispute with China over the yuan's value.

He also pointed to several signs that the governments efforts to spur the economy is working. People are slowly coming back to work and lowering their debt burdens and private investment in increasing, he said.

"The economy is definitely healing," Geithner told a crowd at the Oshman Family Jewish Community Center. "We're making some progress and repairing a damage caused by the crisis, but it's still a very tough economy."

Geithner's speech, which was organized by the Commonwealth Club of Silicon Valley, came at a time of economic anxiety both domestically and abroad. With Election Day just two weeks away, Obama's stimulus plan continues to get slammed by Republicans, particularly those affiliated with the Tea Party. Internationally, foreign leaders have been warning about an "international currency war" and U.S. officials have accused China of keeping the yuan's value low.

Geithner said Monday that China's currency remains "significantly undervalued" but said that the United States would not lower the dollar's value to boost exports.

"It's not going to happen in this country," Geithner said.

"The United States and no country around the world can devalue its way to prosperity."

Geithner, who is one of the chief architects of Obama's economic policy, defended the use of aggressive government intervention at a time of economic crisis. He also stressed the need to improve government oversight of financial institutions -- oversight that he said the government "allowed to grow rusty."

"No human could look at our financial system and say it did an adequate job of meeting the basic needs of the country," Geithner said.

One of the lessons from Japan's "lost decade" of the 1990s is that governments need to move very quickly and with "overwhelming" force to break financial panics, he said.

"If you're not aggressive with the full arsenal of tools governments have you will be consigned to long periods of under-performance in growth," Geithner said.

Geithner said he was confident that the reforms in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which became law in July, would make America's economy more resilient and stable. An important part of the reform effort is making sure America's financial institutions are run with less leverage, he said.

He also stressed the need for America to provide businesses with incentives and to invest in education, research and development and infrastructure.

When asked about California's proposed high-speed rail system, Geithner said infrastructure projects such as high-speed rail are valuable because they benefit the people who have been hit particularly hard by the recession -- those in manufacturing.

"Investing in public infrastructure is one of the highest returns on the dollar of taxpayer resources," Geithner said.

The Palo Alto Weekly tweeted Geithner's talk as it happened Monday. To read more quotes from his speech, go to www.twitter.com/paloaltoweekly.

Comments

Like this comment
Posted by chris
a resident of University South
on Oct 18, 2010 at 10:32 pm

This guy is very astute economically and politically. Too bad the last 3 secretaries were not of the same caliber.

He gave a very strong endorsement of HSR and did a good job of dancing to the question:

What gives the U.S. the right to the world's lowest gasoline prices?

"I'm the wrong guy to ask," the Treasury secretary answered. "And this is the wrong time to ask me."

Interesting to note how few currency notes in your pocket have his signature on them. They must be saving money by making the bills last longer.


Like this comment
Posted by Vincent
a resident of Midtown
on Oct 19, 2010 at 4:03 am

Well, if they would only stop printing so much money maybe the dollar wouldn't devalue. Talk is cheap.


Like this comment
Posted by Americans need to wake up....
a resident of Charleston Gardens
on Oct 19, 2010 at 4:39 am

Talks is so cheap !!

We will not de-value the dollar - but we would want to up-value the Chinese currency. What the real difference. Its all relative - or else it is just paper.

How many folks actually felt good about his statement that reality was smoke and mirrors.


Like this comment
Posted by Agree...
a resident of Greenmeadow
on Oct 19, 2010 at 6:19 am

I think we are waking up...leftism fails the people and the country every single time it is tried, no matter where, no matter when..from the first Jamestown in the USA to this latest failed attempt at the same old philosophy.

Call it by whatever name you wish..Liberalism, Progressivism, Socialism, Communism... From the first to the last it is part of the same philosopgy..bottom line, it always fails to punish producers by stealing from and controlling them in the name of "fairly" distributing it to those who don't produce, whether it is stealing from the next 2 generations by borrowing from China and printing up money not tied to gold, or stealing from your "rich" neighbor on the right to give to your "poor" neighbor on the left.

We are awake. Doesn't matter how much one "tinkers" with the individual threads of this fabric, the entire cloth is rotten.


Like this comment
Posted by chris
a resident of University South
on Oct 19, 2010 at 8:52 am

Are you calling Bush a leftist? You must live in an alternate reality.


Like this comment
Posted by Agree
a resident of Greenmeadow
on Oct 19, 2010 at 4:07 pm

Yes, actually, I am..he and the ruling republicans of the time were leftists in that they had devolved, or evolved depending on your viewpoint, into policies which did NOT close our borders, did NOT protect freedom of speech, DID grow federal government spending to what was then out of sight, and is now wistfully longed for, DID expand Medicare entitlement program, and WERE the first to federalize embryonic stem cells... I was hoping that by the second term he and the ruling Repubs would come back to "Republican" values, but unfortunately they Hooverized us, and brought us the Dem controlled Congress and House..which pushed us even further left, with even more spending, and even more business-killing legislation..by the time 2008 came around, we were in full Hoover-mode, expanding spending on both sides of the aisle, trying to convince the voters which party was the most compassionate..bail outs and "stimulus" spending began under Bush in an election year that brought us a socialist and a marxist running against each other for POTUS, each trying to outdo the other in blaming businesses and greed for our problems..neither telling the truth about what caused what SHOULD have been an economic downturn, and instead, in a good Hoover way, was turned into a full-scale recession...which then has us teetering on Depression, as we ushered in FDR, redux...

So, yes, he and the then-ruling Repubs were too far to the left. The more left they went, the more their poll numbers went down. They, unfortunately, took plummeting numbers to mean they had to move further left to appease us..yet the more they turned left, the more the results were not what the paying American citizen liked when they looked out their doors..the more their numbers dropped.

Results matter. We are turning back to the right where true compassion arrives through increasing employment opportunities, defending our borders, defending our rights, encouraging assimilation into our society, expecting good behaviors and rewarding them, not encouraging poor choices with rewards, teaching how to fish, not demoralizing a people by giving them charity fish.





Like this comment
Posted by Michael
a resident of Palo Alto Hills
on Oct 19, 2010 at 9:53 pm

Think what went on for eight years under the Bush administration.
The first time in History that you have a war and you lower taxes.
This has never been done since the beginning of time
This compounded by Greenspan's right thinking is why we are in this mess. The people that benefited by the previous administration were the rich the middle class was left out. Now that it has imploded there is a greater gap between the rich and the middle class. Like it or not the rich will have to pay more taxes and in the end they will get the benefit with a stronger infrastructure. Our infrastructure made us a leader before and it will make us a leader in the future. No pain no gain


Like this comment
Posted by my view
a resident of Menlo Park
on Oct 19, 2010 at 10:54 pm

Geithner is reported as saying he didn't know much about the California High Speed Rail project, but for him, the project was gong to create jobs, and was therefore a "no-brainer"

Well the country has certainly awaken to the reality that the fiscal policies pursued by the Obama administration and led by Geither are "brainless". This November Obama loses his party's majority in the house and maybe even in the Senate.

As Palo Alto, Menlo Park, Atherton and other cities have now realized, the High Speed Rail project is "brainless" as well. Now to just get Sacramento to finally close it down.


Like this comment
Posted by Jarred
a resident of Midtown
on Oct 20, 2010 at 9:05 pm

"Secretary Geithner vows not to devalue dollar". Presumably this means he's about to resign.


Like this comment
Posted by Agree
a resident of Greenmeadow
on Oct 21, 2010 at 9:08 am

"Geithner is reported as saying he didn't know much about the California High Speed Rail project, but for him, the project was gong to create jobs, and was therefore a "no-brainer""

written by "my view" above.

You made me really laugh with this one.

Why is the leftists feel free to comment about issues over which they are completely ignoranT? They don't even realize how foolish it is, and keep doing it! Holder commmenting on the AZ law after admittting he hadn't read it, Obama commenting on the Mass. policeman after admitting he didn't know what happened, every single liberal voting for multiple 2,000 page bills they all admit they never read.

And yet for all of them the opinions are "no-brainers"..think about it, folks, this may make a new definition of "no-brainer"

Can we get some folks back who use a brain?


Like this comment
Posted by Agree
a resident of Leland Manor/Garland Drive
on Oct 21, 2010 at 9:13 am

"The first time in History that you have a war and you lower taxes." per a comment up there trying to diss Bush..granted, he was too far to the left for me, but gotta also say in the same breath

"First time in history you have a war, lower taxes AND have the most revenue ever flow into the Federal Coffers".

As for the rest of that post about only the rich benefiting from the Bush economic policies blah blah blah

Tell that to the double-digit numbers of unemployed. Just hit 10%,..more than double what it was a mere 5 years ago. Unemployed have quadrupled from 5 years ago. Bet they would love to have that mean old system back where they earned a paycheck instead of lost their pride.


Like this comment
Posted by Agree
a resident of Leland Manor/Garland Drive
on Oct 21, 2010 at 9:16 am

Sorry, meant to say the number of unemployed BLACKS have quadrupled from
5 years ago..not just unemployed have quadrupled ( not true.."only" doubled..working poor and minorities hit the hardest, though, as usual with statist policies)

BTW, still wondering, did Geitner ever pay up on his taxes?


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