There's nothing here - nothing at all - which suggests that even if the banks are nationalised, a change in policy is likely.
There may be some token pressure on bonus culture and on salaries, and perhaps also on dividends. But it's in no way what it needs to be, which is a giant fun-sized nvestment in the real economy.
Handing cash to banks doesn't mean that businesses will be capitalised, or that a thousand start-ups will bloom - not unless there's specific and forceful guidance to that end.
Geithner has made it clear that he doesn't believe in that kind of government guidance. So this is a kind of Keynesianism for bankers only, and not for the rest of the economy.
"I do not believe we can put ourselves in position of raising the prospect where government comes in and directly manages at great detail the choices [companies] make," Geithner said. "Ultimately, we will end up costing the economy and taxpayers much more." Geithner said that he is "deeply offended" by "many of the judgments" top executives have made, clearly referring to big bonuses and other perks. "But the important offsetting obligation we have is to not create the prospect that the government is going to come in and make decisions for institutions that want to remain in private hands," he said.
Geithner said that he is "deeply offended" by "many of the judgments" top executives have made, clearly referring to big bonuses and other perks. "But the important offsetting obligation we have is to not create the prospect that the government is going to come in and make decisions for institutions that want to remain in private hands," he said.
What exactly does Wall St banking contribute to the real economy, except bubbles and debt?
You can hide, nuke, bury, transform or lie about toxic assets all you want, but Wall St doesn't create any real wealth itself. All it does is impose a kind of top-down seignorage, demanding that all national and international business strategy should be run for its own immediate financial benefit.
Wall St could do some good by offering high quality social investment to implement government strategy. But to an ideologue like Geithner that seems to be literally unthinkable.
So the irony is that while Geithner doesn't believe that governments should tell private business what to do, banks and finance don't share the same reticence when it comes to influence.
And so far it seems that Geithner's is more about protecting that model of influence at almost any price than challenging it.
