“I had breakfast with the mayor,” Treasury Secretary Tim Geithner said before beginning his speech this afternoon at NYU’s Stern School of Business. “I said, ‘How is New York?’ He said, ‘New York is strong.’ I said, ‘Why is that?’ He said, ‘Because we have a great mayor.'”
The crowd—business people, media people and NYU students, faculty and alumni—laughed. As camera shutters clicked, Mr. Geithner stood on stage and delivered a cautiously optimistic speech about the recent financial reforms, which the president signed into law last month. “America,” he said, “is coming back.”
To justify his optimism, Mr. Geithner gave a brief history lesson: He described the Great Depression and the creation of the Federal Deposit Insurance Corporation, quoting a 1933 Time article that described bankers’ fears of the government regulation. “Through the great banking houses of Manhattan last week ran wild-eyed alarm. Big bankers stared at one another in anger and astonishment,” he read. “This is a vivid quote,” he said, departing from his script. The crowd chuckled.
But the vintage journalism reference was not original. President Obama got to the Time article first, back in April during his Cooper Union speech about Wall Street reform. In truth, the Treasury Secretary did not handle it as well as his boss, who read the quotation before telling his audience that it was eight decades old. According to an official White House transcript, there was laughter and applause.
For Mr. Geithner, the moral of the story was that the reforms of the 1930s “laid the foundation for decades of prosperity.” He expects a similar period of prosperity. “The economy is healing. And we are taking the hard steps now, by implementing reforms that will be essential to our capacity to grow and prosper in the future.”
He seemed relaxed throughout the speech, and sat in a chair on stage to take questions after it was over. “I’m very much looking forward to sharing those views,” he said when asked about reforming the housing giants Fannie Mae and Freddie Mac, “but now’s not quite the moment.”
And did Mr. Geithner think the U.S. would follow in Japan’s deflationary footsteps? “I do not,” the Treasury Secretary said. “Was that clear enough?” He said the U.S. has learned from other countries’ mistakes. “Job creation in the private sector is much slower than we’d like, but it came sooner than in previous recoveries,” he said. Former Fed chairman Alan Greenspan might disagree.