Geithner breathes easier on economic doom and gloom
At home and abroad, Treasury Secretary Timothy Geithner said the economy is on the mend but faces years of painstaking reforms.
"We're in a much stronger position than I really thought we would be at this time," Geithner said at the Dallas Regional Chamber Thursday.
The latest jobs numbers are due Friday morning and with it comes some optimism from analysts and the public. In January, unemployment dropped to 8.3%, the lowest level since February 2009.
He pushed a new highway bill making its way through the Senate that would invest in infrastructure and streamline the approval process. Geithner called the bill "employment intensive."
One of the major headwinds, Europe, seems to be gaining progressive and positive momentum. A Greek debt-swap program made major progress Thursday, which would grant the sovereign access to a second bailout package.
He praised foreign officials and the European Central Bank for setting aside politics in favor of "preventing the equivalent of lighting the continent on fire."
"There is a lot more confidence now around the world that they are going to do what it takes to hold this thing together, to make sure they prevent a catastrophic financial failure," Geithner said. "And that is huge not just to Europe of course but to us, as well."
Averting disaster will cost years of reform. Geithner said there is a need to streamline regulatory changes in the U.S., but promised upcoming rules would get tough for the financial sector.
The Volcker rule, which establishes new proprietary trading and other investment restrictions on depository institutions, may be the most prominent example of a rule in need of an overhaul before it takes effect this summer.
"One concern is that the exceptions will swallow the rule. There's another concern that the exceptions in the law are too narrowly drawn and therefore will get in the way of the activity that's really important to how market's function, meaning costs will go higher," Geithner said. "I think we should take the time to get it right, not take more time than we need, but I would encourage the rule writers that they look at those comments carefully and take the time to get it right."
Geithner said earlier in the year he would not return as Treasury Secretary after the November elections. With just eight months left in office, he will leave reams of Dodd-Frank Act reforms unfinished and a recovery still looking for firmer ground. He reiterated Thursday the financial sector in particular was in "desperate need" of new rules and ideas.
"This economy is gradually getting stronger, and the strength is very broad based," Geithner said. "The biggest risk we face is that politics could get in the way of sensible, pragmatic, creative solutions for the economy."