I’ve been quite surprised at the number of very strange things Treasury Secretary Geithner has said recently. You get a distinct sense that the man either isn’t doing his own thinking, or else he’s not strong enough to resist being told what to say by the White House.
The latest one was yesterday in the Senate Finance Committee. He said, get this, “We don’t believe it makes sense to significantly subsidize the use and production of energy sources” that contribute to global warming.
What’s a significant subsidy? Apparently that means being allowed to produce oil and gas in the Gulf of Mexico. So what’s the response? Add a 13% tax on the revenue of a narrow class of producers that should raise $5 billion or so over the next 10 years.
Why is he even wasting his time with this? His job is to find anywhere from one to two trillion dollars every year for the remainder of his time in office.
Geithner is a government guy. He’s not a business guy, a finance guy, a markets guy, or an economist. None of the above. But by talking nonsense, he’s giving everyone a perception that he’s out of his depth.
This is nonsense because it’s either not a tax that’s big enough to matter, or if it is, it will displace the activity it seeks to tax. If the goal really is to displace the activity, then that’s economic nonsense too, at a time when we should be growing the economy as much as we can.
The other thing it could be is a shot across the bow. This could be David Axelrod’s way of putting down a marker that they really mean it about ending the use of low-cost energy in America on climate-change grounds.
That scares me even more. Say what you will about Henry Paulson (and if you knock him for not knowing how to handle the banking crisis, I might even agree, with the caveat that no one else knows either).
But I never once had a sense that Paulson would stand up and speak obvious nonsense that was crafted by the White House to create a political effect. People who have been CEOs learn very quickly that you can’t do that. But I can’t shake the feeling that Geithner does little else.