Why Geithner Must Go
03/17/2009 1:00 pm EST
Louis Navellier, editor of Blue Chip Growth, says Treasury Secretary Timothy Geithner is hurting the markets and the economy and he should be replaced.
Election Day happened in November, but the stock market votes every day and the results are in: Timothy Geithner needs to resign as Treasury Secretary. Not only will it help the market, but I believe it will spare the Obama administration a lot of embarrassment.
The stock market is clearly cheap but markets don't turn around due to low prices, they also need a spark. The best spark that could happen quickly would be for Tim Geithner to leave the cabinet. I hate to sound so harsh, but it needs to be said.
In case you're wondering what happened to Geithner's "bad bank" plan that was supposed to rescue the banking system, well, it's run into some problems. The first is that many of the top slots in the Treasury Department haven't been confirmed by the Senate. Actually, it's not the Senate's fault because 17 of Geithner's deputies haven't even been nominated, yet. I have no idea how Geithner can manage one of the worst financial crises in history, and he can't even get his team in place.
And let's not go into his taxes!
There [also] appears to be an internal struggle within President Obama's economic team with [former Federal Reserve chairman] Paul Volcker on one side and Larry Summers on the other. It seems that Summers is winning most arguments, which isn't good news. Summers apparently favors keeping failing banks alive. The reason why I like Volcker is that he's the man behind the “bad bank” idea.
Paul Volcker is a no-nonsense guy and I think he would be a great replacement for Geithner. The only problem is that he's 81 years old and probably doesn't want the hassle of more government service. If so, that's too bad, because his expertise is sorely needed by the neophytes in the Treasury.
[Recently] Geithner made the bizarre claim that providing tax subsidies to oil companies is responsible for global warming. Huh? I have no idea why a Treasury Secretary is sounding off on environmental policies. Perhaps Geithner is angling to become the head of the EPA.
True to Geithner's anti-oil rhetoric, the Obama Administration's fiscal 2010 budget would levy an excise tax on oil and natural gas produced in the Gulf of Mexico. The budget would also charge a yearly fee of $4 per acre on non-productive leases in the Gulf.
Not surprisingly, Sen. John Cornyn of Texas wasn't pleased with these measures. Geithner, however, was unfazed, and said the additional taxes "can be absorbed" by the oil and gas companies.
The problem with this line of thinking is that companies don't absorb the taxes; they're just passed on to consumers. I wish Geithner had a better understanding of how business works. If we want to see market rally, then it's time to let Mr. Geithner go.