Thursday, May 28, 2009

Geithner to Put on a Comedy Show in China

At a Treasury briefing this morning, a senior Treasury Department official told reporters that Treasury Secretaty Geithner will urge Chinese officials to create an economy where consumers spend more and save less.

"The efforts China could take would be efforts to strengthen the comfort that Chinese households have in spending, which largely involves reducing or addressing the reasons why they feel such a great need to save for precautionary purposes," said the senior Treasury official.
By "comfort" the Treasury official indicated that means encouraging Beijing to offer more generous health-care, retirement, welfare, educational and other benefits in order to persuade the average Chinese citizen that spending now doesn't mean starving later.

If the Chinese have any sense, they should enjoy Geithner's one act play for what it is, sheer madness. They should thank him for making the long trip, feed him lots of won ton soup and fortune cookies and graciously seem him off when he is ready to leave.

The U.S. is in serious financial trouble because of the exact policy recommendations Geithner is going to deliver to the Chinese. Does he realize this? And, just what business is it of Geithner's to be telling the Chinese how to run an economy that seems to be doing quite well?

Does he realize the inflation this will mean at the U.S. consumer level in the unlikely event he is successful in convincing the Chinese to compete for consumers goods against American consumers? Further, saving less will mean less money available to buy U.S. Treasury securities. Does the Treasury Secretary understand this? He honestly would be making more sense if he went over there and told the Chinese that the Treasury was going to start putting Mao's picture on long term bonds, and the Great Wall of China on the one hundred dollar bill.

John Maynard Geithner, aka Tim Conway, is scheduled to arrive in Beijing on Sunday for performances Monday and Tuesday.


  1. Can you put in a link to this (if available)? This is hilarious / outrageous.

  2. Great post! Love your sense of humor.

  3. Didn't Paul Krugman say something similar recently? About the US profiting if China increases it's own consumption and reduces it's Treasury Bond purchases?

    These guys are going to be rolled in tar and feather, and subsequently thrown out of a jumbojet over the atlantic, once the Obama administration realizes that the game is up and it's time to find the scapegoats.

  4. @ Bob Murphy

    I was on most of the call, but here is the WSJ report on the briefing: